Bitcoin's Price History - Investopedia

Technical: The Path to Taproot Activation

Taproot! Everybody wants to have it, somebody wants to make it, nobody knows how to get it!
(If you are asking why everybody wants it, see: Technical: Taproot: Why Activate?)
(Pedants: I mostly elide over lockin times)
Briefly, Taproot is that neat new thing that gets us:
So yes, let's activate taproot!

The SegWit Wars

The biggest problem with activating Taproot is PTSD from the previous softfork, SegWit. Pieter Wuille, one of the authors of the current Taproot proposal, has consistently held the position that he will not discuss activation, and will accept whatever activation process is imposed on Taproot. Other developers have expressed similar opinions.
So what happened with SegWit activation that was so traumatic? SegWit used the BIP9 activation method. Let's dive into BIP9!

BIP9 Miner-Activated Soft Fork

Basically, BIP9 has a bunch of parameters:
Now there are other parameters (name, starttime) but they are not anywhere near as important as the above two.
A number that is not a parameter, is 95%. Basically, activation of a BIP9 softfork is considered as actually succeeding if at least 95% of blocks in the last 2 weeks had the specified bit in the nVersion set. If less than 95% had this bit set before the timeout, then the upgrade fails and never goes into the network. This is not a parameter: it is a constant defined by BIP9, and developers using BIP9 activation cannot change this.
So, first some simple questions and their answers:

The Great Battles of the SegWit Wars

SegWit not only fixed transaction malleability, it also created a practical softforkable blocksize increase that also rebalanced weights so that the cost of spending a UTXO is about the same as the cost of creating UTXOs (and spending UTXOs is "better" since it limits the size of the UTXO set that every fullnode has to maintain).
So SegWit was written, the activation was decided to be BIP9, and then.... miner signalling stalled at below 75%.
Thus were the Great SegWit Wars started.

BIP9 Feature Hostage

If you are a miner with at least 5% global hashpower, you can hold a BIP9-activated softfork hostage.
You might even secretly want the softfork to actually push through. But you might want to extract concession from the users and the developers. Like removing the halvening. Or raising or even removing the block size caps (which helps larger miners more than smaller miners, making it easier to become a bigger fish that eats all the smaller fishes). Or whatever.
With BIP9, you can hold the softfork hostage. You just hold out and refuse to signal. You tell everyone you will signal, if and only if certain concessions are given to you.
This ability by miners to hold a feature hostage was enabled because of the miner-exit allowed by the timeout on BIP9. Prior to that, miners were considered little more than expendable security guards, paid for the risk they take to secure the network, but not special in the grand scheme of Bitcoin.

Covert ASICBoost

ASICBoost was a novel way of optimizing SHA256 mining, by taking advantage of the structure of the 80-byte header that is hashed in order to perform proof-of-work. The details of ASICBoost are out-of-scope here but you can read about it elsewhere
Here is a short summary of the two types of ASICBoost, relevant to the activation discussion.
Now, "overt" means "obvious", while "covert" means hidden. Overt ASICBoost is obvious because nVersion bits that are not currently in use for BIP9 activations are usually 0 by default, so setting those bits to 1 makes it obvious that you are doing something weird (namely, Overt ASICBoost). Covert ASICBoost is non-obvious because the order of transactions in a block are up to the miner anyway, so the miner rearranging the transactions in order to get lower power consumption is not going to be detected.
Unfortunately, while Overt ASICBoost was compatible with SegWit, Covert ASICBoost was not. This is because, pre-SegWit, only the block header Merkle tree committed to the transaction ordering. However, with SegWit, another Merkle tree exists, which commits to transaction ordering as well. Covert ASICBoost would require more computation to manipulate two Merkle trees, obviating the power benefits of Covert ASICBoost anyway.
Now, miners want to use ASICBoost (indeed, about 60->70% of current miners probably use the Overt ASICBoost nowadays; if you have a Bitcoin fullnode running you will see the logs with lots of "60 of last 100 blocks had unexpected versions" which is exactly what you would see with the nVersion manipulation that Overt ASICBoost does). But remember: ASICBoost was, at around the time, a novel improvement. Not all miners had ASICBoost hardware. Those who did, did not want it known that they had ASICBoost hardware, and wanted to do Covert ASICBoost!
But Covert ASICBoost is incompatible with SegWit, because SegWit actually has two Merkle trees of transaction data, and Covert ASICBoost works by fudging around with transaction ordering in a block, and recomputing two Merkle Trees is more expensive than recomputing just one (and loses the ASICBoost advantage).
Of course, those miners that wanted Covert ASICBoost did not want to openly admit that they had ASICBoost hardware, they wanted to keep their advantage secret because miners are strongly competitive in a very tight market. And doing ASICBoost Covertly was just the ticket, but they could not work post-SegWit.
Fortunately, due to the BIP9 activation process, they could hold SegWit hostage while covertly taking advantage of Covert ASICBoost!

UASF: BIP148 and BIP8

When the incompatibility between Covert ASICBoost and SegWit was realized, still, activation of SegWit stalled, and miners were still not openly claiming that ASICBoost was related to non-activation of SegWit.
Eventually, a new proposal was created: BIP148. With this rule, 3 months before the end of the SegWit timeout, nodes would reject blocks that did not signal SegWit. Thus, 3 months before SegWit timeout, BIP148 would force activation of SegWit.
This proposal was not accepted by Bitcoin Core, due to the shortening of the timeout (it effectively times out 3 months before the initial SegWit timeout). Instead, a fork of Bitcoin Core was created which added the patch to comply with BIP148. This was claimed as a User Activated Soft Fork, UASF, since users could freely download the alternate fork rather than sticking with the developers of Bitcoin Core.
Now, BIP148 effectively is just a BIP9 activation, except at its (earlier) timeout, the new rules would be activated anyway (instead of the BIP9-mandated behavior that the upgrade is cancelled at the end of the timeout).
BIP148 was actually inspired by the BIP8 proposal (the link here is a historical version; BIP8 has been updated recently, precisely in preparation for Taproot activation). BIP8 is basically BIP9, but at the end of timeout, the softfork is activated anyway rather than cancelled.
This removed the ability of miners to hold the softfork hostage. At best, they can delay the activation, but not stop it entirely by holding out as in BIP9.
Of course, this implies risk that not all miners have upgraded before activation, leading to possible losses for SPV users, as well as again re-pressuring miners to signal activation, possibly without the miners actually upgrading their software to properly impose the new softfork rules.

BIP91, SegWit2X, and The Aftermath

BIP148 inspired countermeasures, possibly from the Covert ASiCBoost miners, possibly from concerned users who wanted to offer concessions to miners. To this day, the common name for BIP148 - UASF - remains an emotionally-charged rallying cry for parts of the Bitcoin community.
One of these was SegWit2X. This was brokered in a deal between some Bitcoin personalities at a conference in New York, and thus part of the so-called "New York Agreement" or NYA, another emotionally-charged acronym.
The text of the NYA was basically:
  1. Set up a new activation threshold at 80% signalled at bit 4 (vs bit 1 for SegWit).
    • When this 80% signalling was reached, miners would require that bit 1 for SegWit be signalled to achive the 95% activation needed for SegWit.
  2. If the bit 4 signalling reached 80%, increase the block weight limit from the SegWit 4000000 to the SegWit2X 8000000, 6 months after bit 1 activation.
The first item above was coded in BIP91.
Unfortunately, if you read the BIP91, independently of NYA, you might come to the conclusion that BIP91 was only about lowering the threshold to 80%. In particular, BIP91 never mentions anything about the second point above, it never mentions that bit 4 80% threshold would also signal for a later hardfork increase in weight limit.
Because of this, even though there are claims that NYA (SegWit2X) reached 80% dominance, a close reading of BIP91 shows that the 80% dominance was only for SegWit activation, without necessarily a later 2x capacity hardfork (SegWit2X).
This ambiguity of bit 4 (NYA says it includes a 2x capacity hardfork, BIP91 says it does not) has continued to be a thorn in blocksize debates later. Economically speaking, Bitcoin futures between SegWit and SegWit2X showed strong economic dominance in favor of SegWit (SegWit2X futures were traded at a fraction in value of SegWit futures: I personally made a tidy but small amount of money betting against SegWit2X in the futures market), so suggesting that NYA achieved 80% dominance even in mining is laughable, but the NYA text that ties bit 4 to SegWit2X still exists.
Historically, BIP91 triggered which caused SegWit to activate before the BIP148 shorter timeout. BIP148 proponents continue to hold this day that it was the BIP148 shorter timeout and no-compromises-activate-on-August-1 that made miners flock to BIP91 as a face-saving tactic that actually removed the second clause of NYA. NYA supporters keep pointing to the bit 4 text in the NYA and the historical activation of BIP91 as a failed promise by Bitcoin developers.

Taproot Activation Proposals

There are two primary proposals I can see for Taproot activation:
  1. BIP8.
  2. Modern Softfork Activation.
We have discussed BIP8: roughly, it has bit and timeout, if 95% of miners signal bit it activates, at the end of timeout it activates. (EDIT: BIP8 has had recent updates: at the end of timeout it can now activate or fail. For the most part, in the below text "BIP8", means BIP8-and-activate-at-timeout, and "BIP9" means BIP8-and-fail-at-timeout)
So let's take a look at Modern Softfork Activation!

Modern Softfork Activation

This is a more complex activation method, composed of BIP9 and BIP8 as supcomponents.
  1. First have a 12-month BIP9 (fail at timeout).
  2. If the above fails to activate, have a 6-month discussion period during which users and developers and miners discuss whether to continue to step 3.
  3. Have a 24-month BIP8 (activate at timeout).
The total above is 42 months, if you are counting: 3.5 years worst-case activation.
The logic here is that if there are no problems, BIP9 will work just fine anyway. And if there are problems, the 6-month period should weed it out. Finally, miners cannot hold the feature hostage since the 24-month BIP8 period will exist anyway.

PSA: Being Resilient to Upgrades

Software is very birttle.
Anyone who has been using software for a long time has experienced something like this:
  1. You hear a new version of your favorite software has a nice new feature.
  2. Excited, you install the new version.
  3. You find that the new version has subtle incompatibilities with your current workflow.
  4. You are sad and downgrade to the older version.
  5. You find out that the new version has changed your files in incompatible ways that the old version cannot work with anymore.
  6. You tearfully reinstall the newer version and figure out how to get your lost productivity now that you have to adapt to a new workflow
If you are a technically-competent user, you might codify your workflow into a bunch of programs. And then you upgrade one of the external pieces of software you are using, and find that it has a subtle incompatibility with your current workflow which is based on a bunch of simple programs you wrote yourself. And if those simple programs are used as the basis of some important production system, you hve just screwed up because you upgraded software on an important production system.
And well, one of the issues with new softfork activation is that if not enough people (users and miners) upgrade to the newest Bitcoin software, the security of the new softfork rules are at risk.
Upgrading software of any kind is always a risk, and the more software you build on top of the software-being-upgraded, the greater you risk your tower of software collapsing while you change its foundations.
So if you have some complex Bitcoin-manipulating system with Bitcoin somewhere at the foundations, consider running two Bitcoin nodes:
  1. One is a "stable-version" Bitcoin node. Once it has synced, set it up to connect=x.x.x.x to the second node below (so that your ISP bandwidth is only spent on the second node). Use this node to run all your software: it's a stable version that you don't change for long periods of time. Enable txiindex, disable pruning, whatever your software needs.
  2. The other is an "always-up-to-date" Bitcoin Node. Keep its stoarge down with pruning (initially sync it off the "stable-version" node). You can't use blocksonly if your "stable-version" node needs to send transactions, but otherwise this "always-up-to-date" Bitcoin node can be kept as a low-resource node, so you can run both nodes in the same machine.
When a new Bitcoin version comes up, you just upgrade the "always-up-to-date" Bitcoin node. This protects you if a future softfork activates, you will only receive valid Bitcoin blocks and transactions. Since this node has nothing running on top of it, it is just a special peer of the "stable-version" node, any software incompatibilities with your system software do not exist.
Your "stable-version" Bitcoin node remains the same version until you are ready to actually upgrade this node and are prepared to rewrite most of the software you have running on top of it due to version compatibility problems.
When upgrading the "always-up-to-date", you can bring it down safely and then start it later. Your "stable-version" wil keep running, disconnected from the network, but otherwise still available for whatever queries. You do need some system to stop the "always-up-to-date" node if for any reason the "stable-version" goes down (otherwisee if the "always-up-to-date" advances its pruning window past what your "stable-version" has, the "stable-version" cannot sync afterwards), but if you are technically competent enough that you need to do this, you are technically competent enough to write such a trivial monitor program (EDIT: gmax notes you can adjust the pruning window by RPC commands to help with this as well).
This recommendation is from gmaxwell on IRC, by the way.
submitted by almkglor to Bitcoin [link] [comments]

Meet Brock Pierce, the Presidential Candidate With Ties to Pedophiles Who Wants to End Human Trafficking

thedailybeast.com | Sep. 20, 2020.
The “Mighty Ducks” actor is running for president. He clears the air (sort of) to Tarpley Hitt about his ties to Jeffrey Epstein and more.
In the trailer for First Kid, the forgettable 1996 comedy about a Secret Service agent assigned to protect the president’s son, the title character, played by a teenage Brock Pierce, describes himself as “definitely the most powerful kid in the universe.” Now, the former child star is running to be the most powerful man in the world, as an Independent candidate for President of the United States.
Before First Kid, the Minnesota-born actor secured roles in a series of PG-rated comedies, playing a young Emilio Estevez in The Mighty Ducks, before graduating to smaller parts in movies like Problem Child 3: Junior in Love. When his screen time shrunk, Pierce retired from acting for a real executive role: co-founding the video production start-up Digital Entertainment Network (DEN) alongside businessman Marc Collins-Rector. At age 17, Pierce served as its vice president, taking in a base salary of $250,000.
DEN became “the poster child for dot-com excesses,” raising more than $60 million in seed investments and plotting a $75 million IPO. But it turned into a shorthand for something else when, in October of 1999, the three co-founders suddenly resigned. That month, a New Jersey man filed a lawsuit alleging Collins-Rector had molested him for three years beginning when he was 13 years old. The following summer, three teens filed a sexual-abuse lawsuit against Pierce, Collins-Rector, and their third co-founder, Chad Shackley. The plaintiffs later dropped their case against Pierce (he made a payment of $21,600 to one of their lawyers) and Shackley. But after a federal grand jury indicted Collins-Rector on criminal charges in 2000, the DEN founders left the country. When Interpol arrested them in 2002, they said they had confiscated “guns, machetes, and child pornography” from the trio’s beach villa in Spain.
While abroad, Pierce had pivoted to a new venture: Internet Gaming Entertainment, which sold virtual accessories in multiplayer online role-playing games to those desperate to pay, as one Wired reporter put it, “as much as $1,800 for an eight-piece suit of Skyshatter chain mail” rather than earn it in the games themselves. In 2005, a 25-year-old Pierce hired then-Goldman Sachs banker Steve Bannon—just before he would co-found Breitbart News. Two years later, after a World of Warcraft player sued the company for “diminishing” the fun of the game, Steve Bannon replaced Pierce as CEO.
Collins-Rector eventually pleaded guilty to eight charges of child enticement and registered as a sex offender. In the years that followed, Pierce waded into the gonzo economy of cryptocurrencies, where he overlapped more than once with Jeffrey Epstein, and counseled him on crypto. In that world, he founded Tether, a cryptocurrency that bills itself as a “stablecoin,” because its value is allegedly tied to the U.S. dollar, and the blockchain software company Block.one. Like his earlier businesses, Pierce’s crypto projects see-sawed between massive investments and curious deals. When Block.one announced a smart contract software called EOS.IO, the company raised $4 billion almost overnight, setting an all-time record before the product even launched. The Securities and Exchange Commission later fined the company $24 million for violating federal securities law. After John Oliver mocked the ordeal, calling Pierce a “sleepy, creepy cowboy,” Block.one fired him. Tether, meanwhile, is currently under investigation by the New York Attorney General for possible fraud.
On July 4, Pierce announced his candidacy for president. His campaign surrogates include a former Cambridge Analytica director and the singer Akon, who recently doubled down on developing an anonymously funded, $6 billion “Wakanda-like” metropolis in Senegal called Akon City. Pierce claims to be bipartisan, and from the 11 paragraphs on the “Policy” section of his website it can be hard to determine where he falls on the political spectrum. He supports legalizing marijuana and abolishing private prisons, but avoids the phrase “climate change.” He wants to end “human trafficking.” His proposal to end police brutality: body cams.
His political contributions tell a more one-sided story. Pierce’s sole Democratic contribution went to the short-lived congressional run of crypto candidate Brian Forde. The rest went to Republican campaigns like Marco Rubio, Rick Perry, John McCain, and the National Right to Life Political Action Committee. Last year alone, Pierce gave over $44,000 to the Republican National Committee and more than $55,000 to Trump’s re-election fund.
Pierce spoke to The Daily Beast from his tour bus and again over email. Those conversations have been combined and edited for clarity.
You’re announcing your presidential candidacy somewhat late, and historically, third-party candidates haven’t had the best luck with the executive office. If you don’t have a strong path to the White House, what do you want out of the race?
I announced on July 4, which I think is quite an auspicious date for an Independent candidate, hoping to bring independence to this country. There’s a lot of things that I can do. One is: I’m 39 years old. I turn 40 in November. So I’ve got time on my side. Whatever happens in this election cycle, I’m laying the groundwork for the future. The overall mission is to create a third major party—not another third party—a third major party in this country. I think that is what America needs most. George Washington in his closing address warned us about the threat of political parties. John Adams and the other founding fathers—their fear for our future was two political parties becoming dominant. And look at where we are. We were warned.
I believe, having studied systems, any time you have a system of two, what happens is those two things come together, like magnets. They come into collision, or they become polarized and become completely divided. I think we need to rise above partisan politics and find a path forward together. As Albert Einstein is quoted—I’m not sure the line came from him, but he’s quoted in many places—he said that the definition of insanity is making the same mistake or doing the same thing over and over and over again, expecting a different result. [Ed. note: Einstein never said this.] It feels like that’s what our election cycle is like. Half the country feels like they won, half the country feels like they lost, at least if they voted or participated.
Obviously, there’s another late-comer to the presidential race, and that’s Kanye West. He’s received a lot of flak for his candidacy, as he’s openly admitted to trying to siphon votes away from Joe Biden to ensure a Trump victory. Is that something you’re hoping to avoid or is that what you’re going for as well?
Oh no. This is a very serious campaign. Our campaign is very serious. You’ll notice I don’t say anything negative about either of the two major political candidates, because I think that’s one of the problems with our political system, instead of people getting on stage, talking about their visionary ideas, inspiring people, informing and educating, talking about problems, mentioning problems, talking about solutions, constructive criticism. That’s why I refuse to run a negative campaign. I am definitely not a spoiler. I’m into data, right? I’m a technologist. I’ve got digital DNA. So does most of our campaign team. We’ve got our finger on the pulse.
Most of my major Democratic contacts are really happy to see that we’re running in a red state like Wyoming. Kanye West’s home state is Wyoming. He’s not on the ballot in Wyoming I could say, in part, because he didn’t have Akon on his team. But I could also say that he probably didn’t want to be on the ballot in Wyoming because it’s a red state. He doesn’t want to take additional points in a state where he’s only running against Trump. But we’re on the ballot in Wyoming, and since we’re on the ballot in Wyoming I think it’s safe—more than safe, I think it’s evident—that we are not here to run as a spoiler for the benefit of Donald Trump.
In running for president, you’ve opened yourself up to be scrutinized from every angle going back to the beginning of your career. I wanted to ask you about your time at the Digital Entertainment Network. Can you tell me a little bit about how you started there? You became a vice president as a teenager. What were your qualifications and what was your job exactly?
Well, I was the co-founder. A lot of it was my idea. I had an idea that people would use the internet to watch videos, and we create content for the internet. The idea was basically YouTube and Hulu and Netflix. Anyone that was around in the ‘90s and has been around digital media since then, they all credit us as the creators of basically those ideas. I was just getting a message from the creator of The Vandals, the punk rock band, right before you called. He’s like, “Brock, looks like we’re going to get the Guinness Book of World Records for having created the first streaming television show.”
We did a lot of that stuff. We had 30 television shows. We had the top most prestigious institutions in the world as investors. The biggest names. High-net-worth investors like Terry Semel, who’s chairman and CEO of Warner Brothers, and became the CEO of Yahoo. I did all sorts of things. I helped sell $150,000 worth of advertising contracts to the CEOs of Pepsi and everything else. I was the face of the company, meeting all the major banks and everything else, selling the vision of what the future was.
You moved in with Marc Collins-Rector and Chad Shackley at a mansion in Encino. Was that the headquarters of the business?
All start-ups, they normally start out in your home. Because it’s just you. The company was first started out of Marc’s house, and it was probably there for the first two or three months, before the company got an office. That’s, like, how it is for all start-ups.
were later a co-defendant in the L.A. County case filed against Marc Collins-Rector for plying minors with alcohol and drugs, in order to facilitate sexual abuse. You were dropped from the case, but you settled with one of the men for $21,600. Can you explain that?
Okay, well, first of all, that’s not accurate. Two of the plaintiffs in that case asked me if I would be a plaintiff. Because I refused to be a part of the lawsuit, they chose to include me to discredit me, to make their case stronger. They also went and offered 50 percent of what they got to the house management—they went around and offered money to anyone to participate in this. They needed people to corroborate their story. Eventually, because I refused to participate in the lawsuit, they named me. Subsequently, all three of the plaintiffs apologized to me, in front of audiences, in front of many people, saying Brock never did anything. They dismissed their cases.
Remember, this is a civil thing. I’ve never been charged with a crime in my life. And the last plaintiff to have his case dismissed, he contacted his lawyer and said, “Dismiss this case against Brock. Brock never did anything. I just apologized. Dismiss his case.” And the lawyer said, “No. I won’t dismiss this case, I have all these out-of-pocket expenses, I refuse to file the paperwork unless you give me my out-of-pocket expenses.” And so the lawyer, I guess, had $21,000 in bills. So I paid his lawyer $21,000—not him, it was not a settlement. That was a payment to his lawyer for his out-of-pocket expenses. Out-of-pocket expenses so that he would file the paperwork to dismiss the case.
You’ve said the cases were unfounded, and the plaintiffs eventually apologized. But your boss, Marc Collins-Rector later pleaded guilty to eight charges of child enticement and registered as a sex offender. Were you aware of his behavior? How do you square the fact that later allegations proved to be true, but these ones were not?
Well, remember: I was 16 and 17 years old at the time? So, no. I don’t think Marc is the man they made him out to be. But Marc is not a person I would associate with today, and someone I haven’t associated with in a very long time. I was 16 and 17. I chose the wrong business partner. You live and you learn.
You’ve pointed out that you were underage when most of these allegations were said to take place. Did you ever feel like you were coerced or in over your head while working at DEN?
I mean, I was working 18 hours a day, doing things I’d never done before. It was business school. But I definitely learned a lot in building that company. We raised $88 million. We filed our [form] S-1 to go public. We were the hottest start-up in Los Angeles.
In 2000, you left the country with Marc Collins-Rector. Why did you leave? How did you spend those two years abroad?
I moved to Spain in 1999 for personal reasons. I spent those two years in Europe working on developing my businesses.
Interpol found you in 2002. The house where you were staying reportedly contained guns, machetes, and child pornography. Whose guns and child porn were those? Were you aware they were in the house, and how did those get there?
My lawyers have addressed this in 32 pages of documentation showing a complete absence of wrongdoing. Please refer to my webpage for more information.
[Ed. Note: The webpage does not mention guns, machetes, or child pornography. It does state:“It is true that when the local police arrested Collins-Rector in Spain in 2002 on an international warrant, Mr. Pierce was also taken into custody, but so was everyone at Collins-Rector’s house in Spain; and it is equally clear that Brock was promptly released, and no charges of any kind were ever filed against Brock concerning this matter.”]
What do you make of the allegations against Bryan Singer? [Ed. Note: Bryan Singer, a close friend of Collins-Rector, invested at least $50,000 in DEN. In an Atlantic article outlining Singer’s history of alleged sexual assault and statutory rape, one source claimed that at age 15, Collins-Rector abused him and introduced him to Singer, who then assaulted him in the DEN headquarters.]
I am aware of them and I support of all victims of sexual assault. I will let America’s justice system decide on Singer’s outcome.
In 2011, you spoke at the Mindshift conference supported by Jeffrey Epstein. At that point, he had already been convicted of soliciting prostitution from a minor. Why did you agree to speak?
I had never heard of Jeffrey Epstein. His name was not on the website. I was asked to speak at a conference alongside Nobel Prize winners. It was not a cryptocurrency conference, it was filled with Nobel Prize winners. I was asked to speak alongside Nobel Prize winners on the future of money. I speak at conferences historically, two to three times a week. I was like, “Nobel Prize winners? Sounds great. I’ll happily talk about the future of money with them.” I had no idea who Jeffrey Epstein was. His name was not listed anywhere on the website. Had I known what I know now? I clearly would have never spoken there. But I spoke at a conference that he cosponsored.
What’s your connection to the Clinton Global Initiative? Did you hear about it through Jeffrey Epstein?
I joined the Clinton Global Initiative as a philanthropist in 2006 and was a member for one year. My involvement with the Initiative had no connection to Jeffrey Epstein whatsoever.
You’ve launched your campaign in Minnesota, where George Floyd was killed by a police officer. How do you feel about the civil uprising against police brutality?
I’m from Minnesota. Born and raised. We just had a press conference there, announcing that we’re on the ballot. Former U.S. Senator Dean Barkley was there. So that tells you, when former U.S. Senators are endorsing the candidate, right?
[Ed. note: Barkley was never elected to the United States Senate. In November of 2002, he was appointed by then Minnesota Governor Jesse Venture to fill the seat after Sen. Paul Wellstone died in a plane crash. Barkley’s term ended on Jan. 3, 2003—two months later.]
Yes, George Floyd was murdered in Minneapolis. My vice-presidential running mate Karla Ballard and I, on our last trip to Minnesota together, went to visit the George Floyd Memorial. I believe in law and order. I believe that law and order is foundational to any functioning society. But there is no doubt in my mind that we need reform. These types of events—this is not an isolated incident. This has happened many times before. It’s time for change. We have a lot of detail around policy on this issue that we will be publishing next week. Not just high-level what we think, not just a summary, but detailed policy.
You said that you support “law and order.” What does that mean?
“Law and order” means creating a fair and just legal system where our number one priority is protecting the inalienable rights of “Life, Liberty and the pursuit of Happiness” for all people. This means reforming how our police intervene in emergency situations, abolishing private prisons that incentivize mass incarceration, and creating new educational and economic opportunities for our most vulnerable communities. I am dedicated to preventing crime by eliminating the socioeconomic conditions that encourage it.
I support accountability and transparency in government and law enforcement. Some of the key policies I support are requiring body-cams on all law enforcement officers who engage with the public, curtailing the 1033 program that provides local law enforcement agencies with access to military equipment, and abolishing private prisons. Rather than simply defund the police, my administration will take a holistic approach to heal and unite America by ending mass incarceration, police brutality, and racial injustice.
Did you attend any Black Lives Matter protests?
I support all movements aimed at ending racial injustice and inequality. I​ have not attended any Black Lives Matter protests.​ My running-mate, Karla Ballard, attended the March on Washington in support of racial justice and equality.
Your platform doesn’t mention the words “climate change.” Is there a reason for that?
I’m not sure what you mean. Our policy platform specifically references human-caused climate change and we have a plan to restabilize the climate, address environmental degradation, and ensure environmental sustainability.
[Ed. Note: As of writing the Pierce campaign’s policy platform does not specifically reference human-caused climate change.]
You’ve recently brought on Akon as a campaign surrogate. How did that happen? Tell me about that.
Akon and I have been friends for quite some time. I was one of the guys that taught him about Bitcoin. I helped make some videogames for him, I think in 2012. We were talking about Bitcoin, teaching him the ropes, back in 2013. And in 2014, we were both speaking at the Milken Global Conference, and I encouraged him to talk about how Bitcoin, Africa, changed the world. He became the biggest celebrity in the world, talking about Bitcoin at the time. I’m an adviser to his Akoin project, very interested in the work that he’s doing to build a city in Africa.
I think we need a government that’s of, for, and by the people. Akon has huge political aspirations. He obviously was a hugely successful artist. But he also discovered artists like Lady Gaga. So not only is he, himself, a great artist, but he’s also a great identifier and builder of other artists. And he’s been a great businessman, philanthropist. He’s pushing the limits of what can be done. We’re like-minded individuals in that regard. I think he’ll be running for political office one day, because he sees what I see: that we need real change, and we need a government that is of, for, and by the people.
You mentioned that you’re an adviser on Akoin. Do you have any financial investments in Akoin or Akon City?
I don’t believe so. I’d have to check. I have so much stuff. But I don’t believe that I have any economic interests in his stuff. I’d have to verify that. We’ll get back to you. I don’t believe that I have any economic interests. My interest is in helping him. He’s a visionary with big ideas that wants to help things in the world. If I can be of assistance in helping him make the world a better place, I’m all for it. I’m not motivated by money. I’m not running for office because I’m motivated by power. I’m running for office because I’m deeply, deeply concerned about our collective future.
You’ve said you’re running on a pro-technology platform. One week into your campaign last month, a New York appeals court approved the state Attorney General’s attempt to investigate the stablecoin Tether for potentially fraudulent activity. Do you think this will impact your ability to sell people on your tech entrepreneurship?
No, I think my role in Tether is as awesome as it gets. It was my idea. I put it together. But I’ve had no involvement in the company since 2015. I gave all of my equity to the other shareholders. I’ve had zero involvement in the company for almost six years. It was just my idea. I put the initial team together. But I think Tether is one of the most important innovations in the world, certainly. The idea is, I digitized the U.S. dollar. I used technology to digitize currency—existing currency. The U.S. dollar in particular. It’s doing $10 trillion a year. Ten trillion dollars a year of transactional volume. It’s probably the most important innovation in currency since the advent of fiat money. The people that took on the business and ran the business in years to come, they’ve done things I’m not proud of. I’m not sure they’ve done anything criminal. But they certainly did things differently than I would do. But it’s like, you have kids, they turn 18, they go out into the world, and sometimes you’re proud of the things they do, and sometimes you shake your head and go, “Ugh, why did you do that?” I have zero concerns as it relates to me personally. I wish they made better decisions.
What do you think the investigation will find?
I have no idea. The problem that was raised is that there was a $5 million loan between two entities and whether or not they had the right to do that, did they disclose it correctly. There’s been no accusations of, like, embezzlement or anything that bad.
[Ed. Note: The Attorney General’s press release on the investigation reads: “Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.”]
But there’s been some disclosure things, that is the issue. No one is making any outrageous claims that these are people that have done a bunch of bad—well, on the internet, the media has said that the people behind the business may have been manipulating the price of Bitcoin, but I don’t think that has anything to do with the New York investigation. Again, I’m so not involved, and so not at risk, that I’m not even up to speed on the details.
[Ed note: A representative of the New York State Attorney General told Forbes that he “cannot confirm or deny that the investigation” includes Pierce.]
We’ve recently witnessed the rise of QAnon, the conspiracy theory that Hollywood is an evil cabal of Satanic pedophiles and Trump is the person waging war on them. You mentioned human trafficking, which has become a cause for them. What are your thoughts on that?
I’ve watched some of the content. I think it’s an interesting phenomenon. I’m an internet person, so Anonymous is obviously an organization that has been doing interesting stuff. It’s interesting. I don’t have a big—conspiracy theory stuff is—I guess I have a question for you: What do you think of all of it, since you’re the expert?
You know, I think it’s not true, but I’m not running for president. I do wonder what this politician [Georgia congressional candidate Marjorie Taylor Greene], who’s just won her primary, is going to do on day one, once she finds out there’s no satanic cabal room.
Wait, someone was running for office and won on a QAnon platform, saying that Hollywood did—say what? You’re the expert here.
She won a primary. But I want to push on if we only have a few minutes. In 2006, your gaming company IGE brought on Steve Bannon as an investor. Goldman later bought out most of your stock. Bannon eventually replaced you as CEO of Affinity. You’ve described him as your “right-hand man for, like, seven years.” How well did you know Bannon during that time?
Yes, so this is in my mid-twenties. He wasn’t an investor. He worked for me. He was my banker. He worked for me for three years as my yield guide. And then he was my CEO running the company for another four years. So I haven’t worked with Steve for a decade or so. We worked in videogame stuff and banking. He was at Goldman Sachs. He was not in the political area at the time. But he was a pretty successful banker. He set up Goldman Sachs Los Angeles. So for me, I’d say he did a pretty good job.
During your business relationship, Steve Bannon founded Breitbart News, which has pretty consistently published racist material. How do you feel about Breitbart?
I had no involvement with Breitbart News. As for how I feel about such material, I’m not pleased by any form of hate-mongering. I strongly support the equality of all Americans.
Did you have qualms about Bannon’s role in the 2016 election?
Bannon’s role in the Trump campaign got me to pay closer attention to what he was doing but that’s about it. Whenever you find out that one of your former employees has taken on a role like that, you pay attention.
Bannon served on the board of Cambridge Analytica. A staffer on your campaign, Brittany Kaiser, also served as a business director for them. What are your thoughts on their use of illicitly-obtained Facebook data for campaign promotional material?
Yes, so this will be the last question I can answer because I’ve got to be off for this 5:00 pm. But Brittany Kaiser is a friend of mine. She was the whistleblower of Cambridge Analytica. She came to me and said, “What do I do?” And I said, “Tell the truth. The truth will set you free.”
[Ed. Note: Investigations in Cambridge Analytica took place as early as Nov. 2017, when a U.K. reporter at Channel 4 News recorded their CEO boasting about using “beautiful Ukranian girls” and offers of bribes to discredit political officials. The first whistleblower was Christopher Wylie, who disclosed a cache of documents to The Guardian, published on Mar. 17, 2018. Kaiser’s confession ran five days later, after the scandal made national news. Her association with Cambridge Analytica is not mentioned anywhere on Pierce’s campaign website.]
So I’m glad that people—I’m a supporter of whistleblowers, people that see injustice in the world and something not right happening, and who put themselves in harm’s way to stand up for what they believe in. So I stand up for Brittany Kaiser.
Who do you think [anonymous inventor of Bitcoin] Satoshi Nakamoto is?
We all are Satoshi Nakamoto.
You got married at Burning Man. Have you been attending virtual Burning Man?
I’m running a presidential campaign. So, while I was there in spirit, unfortunately my schedule did not permit me to attend.
OP note: please refer to the original article for reference links within text (as I've not added them here!)
submitted by Leather_Term to Epstein [link] [comments]

How I Got a Deep 70% Discount on the Newly Launched Sonos Five

I posted this back in June 2020 on Medium, but thought I'd re-post here as well in case it's helpful!
None of this is groundbreaking, just wanted to share the combo of things I did (discount codes, selling old speakers, etc.) to off-set the Sonos 5 purchase!
Also, I'm new to the Reddit community, this is my first post :)

Here's the original article:

A huge new update was just released to usher in the next generation of Sonos devices. The new ’S2’ update is both a new app and a new operating system, opening up a new world of features like hi-res audio, a subtle new look, and other much-awaited goodies.
But the update also means that older Sonos devices are no longer supported in the new ecosystem. I owned one of these dinosaurs - the flagship model 1st generation Play: 5 originally released in 2009.
This is how I upgraded to the newly launched Play Five - originally priced at $499 - for a total purchase price of $138 bought directly from Sonos. That’s a 70% savings!

The Sonos Trade Up Program
So you paid hundreds or even thousands of dollars for your home audio system, only to find that your devices will no longer be supported in the bright new Sonos future ahead.
Enter the Trade Up program. Sonos encourages its loyal customers to upgrade their eligible devices by giving them a nice 30% discount on new devices purchased directly on sonos.com or through authorized retailers.
The process is so quick and easy, I didn’t even realize what I had done until after I got the deal.
First, sign in to your account on sonos.com. Once logged in, you should then see a “Trade Up” page where you can get a list of all the devices in your current system that are eligible for the program. I own a Play: 1, a One, a Beam, but only my Play: 5 was eligible for the Trade Up program. Once you choose your eligible device and confirm, you instantly get the 30% off discount in your account, and can verify that you got it by going to the “Offers” page. You don’t even have to enter a promo code. As long as you’re logged in, your next order gets the discount.
The 30% discount never expires and can be used on one full-priced device.
Sonos also provides some info on how to recycle your old device so that it doesn’t go to a landfill. How thoughtful and sustainable.
But the Trade Up program wasn’t always as eco-friendly. Sonos got quite a bit of bad press back in October 2019 for the controversial “Recycle Mode” that bricked devices that were redeemed for discounts using the Trade Up program. After getting their 30% Trade Up discount, customers used to get a 21-day countdown before the old device goes into Recycle Mode, which wiped out all the data then permanently bricked the device. This was seen as an environmentally unfriendly abuse of hardware, most of which was still functioning perfectly even though they wouldn’t be getting feature updates. Good move on Sonos to get rid of this unnecessary bricking.
At the time of this writing, in addition to the Play: 5, other products eligible for the Trade Up program include Zone Players, along with Connect and Connect:Amp devices manufactured between 2011 and 2015.
After the 30% Trade Up discount, a brand new Play Five would cost $349 directly from sonos.com.
If 30% off is a good enough deal for you, high five and congrats on getting an awesome discount, you can stop reading here. The rest is how I got my purchase price down to more than 70% off.

My Price Arbitrage Hack
If you don’t have a legacy device, buy one on eBay! This may seem counterintuitive, but you could actually save money by buying a legacy device - as long as the 30% discount you would get is more than what you paid for the legacy speaker.
Please double, triple, quadruple check that the device you’re buying on eBay (or other marketplaces) is on the list of eligible devices for the Trade Up program.
Here’s how stumbled upon this great hack.
I bought my Play: 5 on eBay only a couple of months ago for $125 - inclusive of taxes and shipping - not even intending to trade it up. I actually didn’t even know about the Trade Up program when I made the purchase, and just needed a way to connect my turntable to my Sonos system using the Play: 5’s line-in. The unit I ended up buying looked like it had seen better days - black skid marks, surface scratches, and even a pretty large piece of plastic missing from the top edge. But it was functioning perfectly and allowed me to finally play my vinyl collection through Sonos speakers around my apartment.
Fast forward 2 months later - I was initially bummed that my eBay purchase was on the list of legacy devices that wouldn’t be supported by the ‘S2’ update. After some creative math, my frustration was quickly replaced by joy when I found out the 30% I’d get off a new Play Five would be more than the $125 I paid for my old speakers.

Get a Bundle
Sometimes you have to spend more money to save even more money. Here’s how I stretched my Trade Up discount to get an even better deal on my Play Five.
I ended up using my 30% Trade Up discount on not one, but two Play Fives with the Two Room Pro Set, for a total of $699 directly from sonos.com.
I live in a 1-bedroom apartment and don’t want my neighbors to hate me, so I planned on keeping only one device. Why did I buy the bundle then? Because I knew I could sell the second unit for more than the $349 that I paid, while still giving the buyer a good discount off a newly launched product.
There was also zero risk on my end thanks to the 45-day Return Policy. If I wasn’t able to sell the second unit, I could easily submit a return and get my money back.
As soon as I placed the order, I posted a brand new white Play Five on the Reddit buy/sell/trade thread for $425. This would get the buyer $75 a brand new Play Five, pretty nifty as discounts are unheard of for newly launched products.
Unfortunately the Play Fives were backordered, so I wasn’t able to get my order until almost two weeks later. But being on backorder gave me some insight that there was more than enough demand for the product - great news for someone trying to sell one!
Within minutes of receiving my package, I quickly posted it on Mercari and Facebook Marketplace, and almost instantly sold it. Now I’m wondering if I could’ve listed it a little higher!
I got my asking price of $425, bringing the purchase price of the Five I kept to $274 - that’s 45% off the original price!

Sell Redundant Units
If you’re perfectly happy with almost half off the $499 list price, then stop here, and go place your order already! The next tip might take a little more effort, but it’s what got me down to an out of pocket cost of $138 for the newly launched Fives.
Here it is - I sold the old Play: 5 for $85. Yes, the same unit that Sonos gave me a 30% Trade Up discount on. This sounded shady to me too, so I checked. The Verge mentioned it as an option. I reached out to Sonos, but haven’t gotten a reply. https://www.theverge.com/2019/12/30/21042871/sonos-recycle-mode-trade-up-program-controversy
I posted it on Mercari for $95, it sold for the asking price within 30 minutes, and the buyer even paid for shipping. Now I’m thinking again, could I have listed it for higher?
Mercari takes a 10% cut, so that takes my earnings down to $85.50, and bringing my Play Five purchase price down to $213. Well, technically $213.50, but I’ll give you the fifty cents back if it can cut back on my typing.
I found the final $75 difference by selling an older Play: 1 that would’ve been in the same space as my new Play Five. Once again, I don’t want my neighbors to hate me. Now, I get that not everyone will have an extra Sonos speaker laying around to sell, but I did, so I’m counting it in my total.
With the $75 earnings from my old Play: 1, my final purchase price for the freshly launched brand new Play Five is $138.

Get it Certified Refurbished
Want a quicker and easer way to get a discount on Sonos products directly from sonos.com? Buy refurbished.
This is actually where I got the Play: 1 that I told you about earlier. I bought it for $99 and sold it for $75 two years later, proving how much stored value Sonos products have. It may even more stable than Bitcoin.
Right now there aren’t too many deals to snag in the Refurbished section, but keep checking back as they update it pretty regularly.

Conclusion
It takes a little bit of pre-planning and patience, but by taking advantage of Sonos offers along with creative arbitrage, you can get 72% off a brand new newly launched product directly from the manufacturer.
submitted by yikessilly to sonos [link] [comments]

Bob The Magic Custodian



Summary: Everyone knows that when you give your assets to someone else, they always keep them safe. If this is true for individuals, it is certainly true for businesses.
Custodians always tell the truth and manage funds properly. They won't have any interest in taking the assets as an exchange operator would. Auditors tell the truth and can't be misled. That's because organizations that are regulated are incapable of lying and don't make mistakes.

First, some background. Here is a summary of how custodians make us more secure:

Previously, we might give Alice our crypto assets to hold. There were risks:

But "no worries", Alice has a custodian named Bob. Bob is dressed in a nice suit. He knows some politicians. And he drives a Porsche. "So you have nothing to worry about!". And look at all the benefits we get:
See - all problems are solved! All we have to worry about now is:
It's pretty simple. Before we had to trust Alice. Now we only have to trust Alice, Bob, and all the ways in which they communicate. Just think of how much more secure we are!

"On top of that", Bob assures us, "we're using a special wallet structure". Bob shows Alice a diagram. "We've broken the balance up and store it in lots of smaller wallets. That way", he assures her, "a thief can't take it all at once". And he points to a historic case where a large sum was taken "because it was stored in a single wallet... how stupid".
"Very early on, we used to have all the crypto in one wallet", he said, "and then one Christmas a hacker came and took it all. We call him the Grinch. Now we individually wrap each crypto and stick it under a binary search tree. The Grinch has never been back since."

"As well", Bob continues, "even if someone were to get in, we've got insurance. It covers all thefts and even coercion, collusion, and misplaced keys - only subject to the policy terms and conditions." And with that, he pulls out a phone-book sized contract and slams it on the desk with a thud. "Yep", he continues, "we're paying top dollar for one of the best policies in the country!"
"Can I read it?' Alice asks. "Sure," Bob says, "just as soon as our legal team is done with it. They're almost through the first chapter." He pauses, then continues. "And can you believe that sales guy Mike? He has the same year Porsche as me. I mean, what are the odds?"

"Do you use multi-sig?", Alice asks. "Absolutely!" Bob replies. "All our engineers are fully trained in multi-sig. Whenever we want to set up a new wallet, we generate 2 separate keys in an air-gapped process and store them in this proprietary system here. Look, it even requires the biometric signature from one of our team members to initiate any withdrawal." He demonstrates by pressing his thumb into the display. "We use a third-party cloud validation API to match the thumbprint and authorize each withdrawal. The keys are also backed up daily to an off-site third-party."
"Wow that's really impressive," Alice says, "but what if we need access for a withdrawal outside of office hours?" "Well that's no issue", Bob says, "just send us an email, call, or text message and we always have someone on staff to help out. Just another part of our strong commitment to all our customers!"

"What about Proof of Reserve?", Alice asks. "Of course", Bob replies, "though rather than publish any blockchain addresses or signed transaction, for privacy we just do a SHA256 refactoring of the inverse hash modulus for each UTXO nonce and combine the smart contract coefficient consensus in our hyperledger lightning node. But it's really simple to use." He pushes a button and a large green checkmark appears on a screen. "See - the algorithm ran through and reserves are proven."
"Wow", Alice says, "you really know your stuff! And that is easy to use! What about fiat balances?" "Yeah, we have an auditor too", Bob replies, "Been using him for a long time so we have quite a strong relationship going! We have special books we give him every year and he's very efficient! Checks the fiat, crypto, and everything all at once!"

"We used to have a nice offline multi-sig setup we've been using without issue for the past 5 years, but I think we'll move all our funds over to your facility," Alice says. "Awesome", Bob replies, "Thanks so much! This is perfect timing too - my Porsche got a dent on it this morning. We have the paperwork right over here." "Great!", Alice replies.
And with that, Alice gets out her pen and Bob gets the contract. "Don't worry", he says, "you can take your crypto-assets back anytime you like - just subject to our cancellation policy. Our annual management fees are also super low and we don't adjust them often".

How many holes have to exist for your funds to get stolen?
Just one.

Why are we taking a powerful offline multi-sig setup, widely used globally in hundreds of different/lacking regulatory environments with 0 breaches to date, and circumventing it by a demonstrably weak third party layer? And paying a great expense to do so?
If you go through the list of breaches in the past 2 years to highly credible organizations, you go through the list of major corporate frauds (only the ones we know about), you go through the list of all the times platforms have lost funds, you go through the list of times and ways that people have lost their crypto from identity theft, hot wallet exploits, extortion, etc... and then you go through this custodian with a fine-tooth comb and truly believe they have value to add far beyond what you could, sticking your funds in a wallet (or set of wallets) they control exclusively is the absolute worst possible way to take advantage of that security.

The best way to add security for crypto-assets is to make a stronger multi-sig. With one custodian, what you are doing is giving them your cryptocurrency and hoping they're honest, competent, and flawlessly secure. It's no different than storing it on a really secure exchange. Maybe the insurance will cover you. Didn't work for Bitpay in 2015. Didn't work for Yapizon in 2017. Insurance has never paid a claim in the entire history of cryptocurrency. But maybe you'll get lucky. Maybe your exact scenario will buck the trend and be what they're willing to cover. After the large deductible and hopefully without a long and expensive court battle.

And you want to advertise this increase in risk, the lapse of judgement, an accident waiting to happen, as though it's some kind of benefit to customers ("Free institutional-grade storage for your digital assets.")? And then some people are writing to the OSC that custodians should be mandatory for all funds on every exchange platform? That this somehow will make Canadians as a whole more secure or better protected compared with standard air-gapped multi-sig? On what planet?

Most of the problems in Canada stemmed from one thing - a lack of transparency. If Canadians had known what a joke Quadriga was - it wouldn't have grown to lose $400m from hard-working Canadians from coast to coast to coast. And Gerald Cotten would be in jail, not wherever he is now (at best, rotting peacefully). EZ-BTC and mister Dave Smilie would have been a tiny little scam to his friends, not a multi-million dollar fraud. Einstein would have got their act together or been shut down BEFORE losing millions and millions more in people's funds generously donated to criminals. MapleChange wouldn't have even been a thing. And maybe we'd know a little more about CoinTradeNewNote - like how much was lost in there. Almost all of the major losses with cryptocurrency exchanges involve deception with unbacked funds.
So it's great to see transparency reports from BitBuy and ShakePay where someone independently verified the backing. The only thing we don't have is:
It's not complicated to validate cryptocurrency assets. They need to exist, they need to be spendable, and they need to cover the total balances. There are plenty of credible people and firms across the country that have the capacity to reasonably perform this validation. Having more frequent checks by different, independent, parties who publish transparent reports is far more valuable than an annual check by a single "more credible/official" party who does the exact same basic checks and may or may not publish anything. Here's an example set of requirements that could be mandated:
There are ways to structure audits such that neither crypto assets nor customer information are ever put at risk, and both can still be properly validated and publicly verifiable. There are also ways to structure audits such that they are completely reasonable for small platforms and don't inhibit innovation in any way. By making the process as reasonable as possible, we can completely eliminate any reason/excuse that an honest platform would have for not being audited. That is arguable far more important than any incremental improvement we might get from mandating "the best of the best" accountants. Right now we have nothing mandated and tons of Canadians using offshore exchanges with no oversight whatsoever.

Transparency does not prove crypto assets are safe. CoinTradeNewNote, Flexcoin ($600k), and Canadian Bitcoins ($100k) are examples where crypto-assets were breached from platforms in Canada. All of them were online wallets and used no multi-sig as far as any records show. This is consistent with what we see globally - air-gapped multi-sig wallets have an impeccable record, while other schemes tend to suffer breach after breach. We don't actually know how much CoinTrader lost because there was no visibility. Rather than publishing details of what happened, the co-founder of CoinTrader silently moved on to found another platform - the "most trusted way to buy and sell crypto" - a site that has no information whatsoever (that I could find) on the storage practices and a FAQ advising that “[t]rading cryptocurrency is completely safe” and that having your own wallet is “entirely up to you! You can certainly keep cryptocurrency, or fiat, or both, on the app.” Doesn't sound like much was learned here, which is really sad to see.
It's not that complicated or unreasonable to set up a proper hardware wallet. Multi-sig can be learned in a single course. Something the equivalent complexity of a driver's license test could prevent all the cold storage exploits we've seen to date - even globally. Platform operators have a key advantage in detecting and preventing fraud - they know their customers far better than any custodian ever would. The best job that custodians can do is to find high integrity individuals and train them to form even better wallet signatories. Rather than mandating that all platforms expose themselves to arbitrary third party risks, regulations should center around ensuring that all signatories are background-checked, properly trained, and using proper procedures. We also need to make sure that signatories are empowered with rights and responsibilities to reject and report fraud. They need to know that they can safely challenge and delay a transaction - even if it turns out they made a mistake. We need to have an environment where mistakes are brought to the surface and dealt with. Not one where firms and people feel the need to hide what happened. In addition to a knowledge-based test, an auditor can privately interview each signatory to make sure they're not in coercive situations, and we should make sure they can freely and anonymously report any issues without threat of retaliation.
A proper multi-sig has each signature held by a separate person and is governed by policies and mutual decisions instead of a hierarchy. It includes at least one redundant signature. For best results, 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7.

History has demonstrated over and over again the risk of hot wallets even to highly credible organizations. Nonetheless, many platforms have hot wallets for convenience. While such losses are generally compensated by platforms without issue (for example Poloniex, Bitstamp, Bitfinex, Gatecoin, Coincheck, Bithumb, Zaif, CoinBene, Binance, Bitrue, Bitpoint, Upbit, VinDAX, and now KuCoin), the public tends to focus more on cases that didn't end well. Regardless of what systems are employed, there is always some level of risk. For that reason, most members of the public would prefer to see third party insurance.
Rather than trying to convince third party profit-seekers to provide comprehensive insurance and then relying on an expensive and slow legal system to enforce against whatever legal loopholes they manage to find each and every time something goes wrong, insurance could be run through multiple exchange operators and regulators, with the shared interest of having a reputable industry, keeping costs down, and taking care of Canadians. For example, a 4 of 7 multi-sig insurance fund held between 5 independent exchange operators and 2 regulatory bodies. All Canadian exchanges could pay premiums at a set rate based on their needed coverage, with a higher price paid for hot wallet coverage (anything not an air-gapped multi-sig cold wallet). Such a model would be much cheaper to manage, offer better coverage, and be much more reliable to payout when needed. The kind of coverage you could have under this model is unheard of. You could even create something like the CDIC to protect Canadians who get their trading accounts hacked if they can sufficiently prove the loss is legitimate. In cases of fraud, gross negligence, or insolvency, the fund can be used to pay affected users directly (utilizing the last transparent balance report in the worst case), something which private insurance would never touch. While it's recommended to have official policies for coverage, a model where members vote would fully cover edge cases. (Could be similar to the Supreme Court where justices vote based on case law.)
Such a model could fully protect all Canadians across all platforms. You can have a fiat coverage governed by legal agreements, and crypto-asset coverage governed by both multi-sig and legal agreements. It could be practical, affordable, and inclusive.

Now, we are at a crossroads. We can happily give up our freedom, our innovation, and our money. We can pay hefty expenses to auditors, lawyers, and regulators year after year (and make no mistake - this cost will grow to many millions or even billions as the industry grows - and it will be borne by all Canadians on every platform because platforms are not going to eat up these costs at a loss). We can make it nearly impossible for any new platform to enter the marketplace, forcing Canadians to use the same stagnant platforms year after year. We can centralize and consolidate the entire industry into 2 or 3 big players and have everyone else fail (possibly to heavy losses of users of those platforms). And when a flawed security model doesn't work and gets breached, we can make it even more complicated with even more people in suits making big money doing the job that blockchain was supposed to do in the first place. We can build a system which is so intertwined and dependent on big government, traditional finance, and central bankers that it's future depends entirely on that of the fiat system, of fractional banking, and of government bail-outs. If we choose this path, as history has shown us over and over again, we can not go back, save for revolution. Our children and grandchildren will still be paying the consequences of what we decided today.
Or, we can find solutions that work. We can maintain an open and innovative environment while making the adjustments we need to make to fully protect Canadian investors and cryptocurrency users, giving easy and affordable access to cryptocurrency for all Canadians on the platform of their choice, and creating an environment in which entrepreneurs and problem solvers can bring those solutions forward easily. None of the above precludes innovation in any way, or adds any unreasonable cost - and these three policies would demonstrably eliminate or resolve all 109 historic cases as studied here - that's every single case researched so far going back to 2011. It includes every loss that was studied so far not just in Canada but globally as well.
Unfortunately, finding answers is the least challenging part. Far more challenging is to get platform operators and regulators to agree on anything. My last post got no response whatsoever, and while the OSC has told me they're happy for industry feedback, I believe my opinion alone is fairly meaningless. This takes the whole community working together to solve. So please let me know your thoughts. Please take the time to upvote and share this with people. Please - let's get this solved and not leave it up to other people to do.

Facts/background/sources (skip if you like):



Thoughts?
submitted by azoundria2 to QuadrigaInitiative [link] [comments]

Since they're calling for r/btc to be banned...

Maybe it's time to discuss bitcoin's history again. Credit to u/singularity87 for the original post over 3 years ago.

People should get the full story of bitcoin because it is probably one of the strangest of all reddit subs.
bitcoin, the main sub for the bitcoin community is held and run by a person who goes by the pseudonym u/theymos. Theymos not only controls bitcoin, but also bitcoin.org and bitcointalk.com. These are top three communication channels for the bitcoin community, all controlled by just one person.
For most of bitcoin's history this did not create a problem (at least not an obvious one anyway) until around mid 2015. This happened to be around the time a new player appeared on the scene, a for-profit company called Blockstream. Blockstream was made up of/hired many (but not all) of the main bitcoin developers. (To be clear, Blockstream was founded before mid 2015 but did not become publicly active until then). A lot of people, including myself, tried to point out there we're some very serious potential conflicts of interest that could arise when one single company controls most of the main developers for the biggest decentralised and distributed cryptocurrency. There were a lot of unknowns but people seemed to give them the benefit of the doubt because they were apparently about to release some new software called "sidechains" that could offer some benefits to the network.
Not long after Blockstream came on the scene the issue of bitcoin's scalability once again came to forefront of the community. This issue came within the community a number of times since bitcoins inception. Bitcoin, as dictated in the code, cannot handle any more than around 3 transactions per second at the moment. To put that in perspective Paypal handles around 15 transactions per second on average and VISA handles something like 2000 transactions per second. The discussion in the community has been around how best to allow bitcoin to scale to allow a higher number of transactions in a given amount of time. I suggest that if anyone is interested in learning more about this problem from a technical angle, they go to btc and do a search. It's a complex issue but for many who have followed bitcoin for many years, the possible solutions seem relatively obvious. Essentially, currently the limit is put in place in just a few lines of code. This was not originally present when bitcoin was first released. It was in fact put in place afterwards as a measure to stop a bloating attack on the network. Because all bitcoin transactions have to be stored forever on the bitcoin network, someone could theoretically simply transmit a large number of transactions which would have to be stored by the entire network forever. When bitcoin was released, transactions were actually for free as the only people running the network were enthusiasts. In fact a single bitcoin did not even have any specific value so it would be impossible set a fee value. This meant that a malicious person could make the size of the bitcoin ledger grow very rapidly without much/any cost which would stop people from wanting to join the network due to the resource requirements needed to store it, which at the time would have been for very little gain.
Towards the end of the summer last year, this bitcoin scaling debate surfaced again as it was becoming clear that the transaction limit for bitcoin was semi regularly being reached and that it would not be long until it would be regularly hit and the network would become congested. This was a very serious issue for a currency. Bitcoin had made progress over the years to the point of retailers starting to offer it as a payment option. Bitcoin companies like, Microsoft, Paypal, Steam and many more had began to adopt it. If the transaction limit would be constantly maxed out, the network would become unreliable and slow for users. Users and businesses would not be able to make a reliable estimate when their transaction would be confirmed by the network.
Users, developers and businesses (which at the time was pretty much the only real bitcoin subreddit) started to discuss how we should solve the problem bitcoin. There was significant support from the users and businesses behind a simple solution put forward by the developer Gavin Andreesen. Gavin was the lead developer after Satoshi Nakamoto left bitcoin and he left it in his hands. Gavin initially proposed a very simple solution of increasing the limit which was to change the few lines of code to increase the maximum number of transactions that are allowed. For most of bitcoin's history the transaction limit had been set far far higher than the number of transactions that could potentially happen on the network. The concept of increasing the limit one time was based on the fact that history had proven that no issue had been cause by this in the past.
A certain group of bitcoin developers decided that increasing the limit by this amount was too much and that it was dangerous. They said that the increased use of resources that the network would use would create centralisation pressures which could destroy the network. The theory was that a miner of the network with more resources could publish many more transactions than a competing small miner could handle and therefore the network would tend towards few large miners rather than many small miners. The group of developers who supported this theory were all developers who worked for the company Blockstream. The argument from people in support of increasing the transaction capacity by this amount was that there are always inherent centralisation pressure with bitcoin mining. For example miners who can access the cheapest electricity will tend to succeed and that bigger miners will be able to find this cheaper electricity easier. Miners who have access to the most efficient computer chips will tend to succeed and that larger miners are more likely to be able to afford the development of them. The argument from Gavin and other who supported increasing the transaction capacity by this method are essentially there are economies of scale in mining and that these economies have far bigger centralisation pressures than increased resource cost for a larger number of transactions (up to the new limit proposed). For example, at the time the total size of the blockchain was around 50GB. Even for the cost of a 500GB SSD is only $150 and would last a number of years. This is in-comparison to the $100,000's in revenue per day a miner would be making.
Various developers put forth various other proposals, including Gavin Andresen who put forth a more conservative increase that would then continue to increase over time inline with technological improvements. Some of the employees of blockstream also put forth some proposals, but all were so conservative, it would take bitcoin many decades before it could reach a scale of VISA. Even though there was significant support from the community behind Gavin's simple proposal of increasing the limit it was becoming clear certain members of the bitcoin community who were part of Blockstream were starting to become increasingly vitriolic and divisive. Gavin then teamed up with one of the other main bitcoin developers Mike Hearn and released a coded (i.e. working) version of the bitcoin software that would only activate if it was supported by a significant majority of the network. What happened next was where things really started to get weird.
After this free and open source software was released, Theymos, the person who controls all the main communication channels for the bitcoin community implemented a new moderation policy that disallowed any discussion of this new software. Specifically, if people were to discuss this software, their comments would be deleted and ultimately they would be banned temporarily or permanently. This caused chaos within the community as there was very clear support for this software at the time and it seemed our best hope for finally solving the problem and moving on. Instead a censorship campaign was started. At first it 'all' they were doing was banning and removing discussions but after a while it turned into actively manipulating the discussion. For example, if a thread was created where there was positive sentiment for increasing the transaction capacity or being negative about the moderation policies or negative about the actions of certain bitcoin developers, the mods of bitcoin would selectively change the sorting order of threads to 'controversial' so that the most support opinions would be sorted to the bottom of the thread and the most vitriolic would be sorted to the top of the thread. This was initially very transparent as it was possible to see that the most downvoted comments were at the top and some of the most upvoted were at the bottom. So they then implemented hiding the voting scores next to the users name. This made impossible to work out the sentiment of the community and when combined with selectively setting the sorting order to controversial it was possible control what information users were seeing. Also, due to the very very large number of removed comments and users it was becoming obvious the scale of censorship going on. To hide this they implemented code in their CSS for the sub that completely hid comments that they had removed so that the censorship itself was hidden. Anyone in support of scaling bitcoin were removed from the main communication channels. Theymos even proudly announced that he didn't care if he had to remove 90% of the users. He also later acknowledged that he knew he had the ability to block support of this software using the control he had over the communication channels.
While this was all going on, Blockstream and it's employees started lobbying the community by paying for conferences about scaling bitcoin, but with the very very strange rule that no decisions could be made and no complete solutions could be proposed. These conferences were likely strategically (and successfully) created to stunt support for the scaling software Gavin and Mike had released by forcing the community to take a "lets wait and see what comes from the conferences" kind of approach. Since no final solutions were allowed at these conferences, they only served to hinder and splinter the communities efforts to find a solution. As the software Gavin and Mike released called BitcoinXT gained support it started to be attacked. Users of the software were attack by DDOS. Employees of Blockstream were recommending attacks against the software, such as faking support for it, to only then drop support at the last moment to put the network in disarray. Blockstream employees were also publicly talking about suing Gavin and Mike from various different angles simply for releasing this open source software that no one was forced to run. In the end Mike Hearn decided to leave due to the way many members of the bitcoin community had treated him. This was due to the massive disinformation campaign against him on bitcoin. One of the many tactics that are used against anyone who does not support Blockstream and the bitcoin developers who work for them is that you will be targeted in a smear campaign. This has happened to a number of individuals and companies who showed support for scaling bitcoin. Theymos has threatened companies that he will ban any discussion of them on the communication channels he controls (i.e. all the main ones) for simply running software that he disagrees with (i.e. any software that scales bitcoin).
As time passed, more and more proposals were offered, all against the backdrop of ever increasing censorship in the main bitcoin communication channels. It finally come down the smallest and most conservative solution. This solution was much smaller than even the employees of Blockstream had proposed months earlier. As usual there was enormous attacks from all sides and the most vocal opponents were the employees of Blockstream. These attacks still are ongoing today. As this software started to gain support, Blockstream organised more meetings, especially with the biggest bitcoin miners and made a pact with them. They promised that they would release code that would offer an on-chain scaling solution hardfork within about 4 months, but if the miners wanted this they would have to commit to running their software and only their software. The miners agreed and the ended up not running the most conservative proposal possible. This was in February last year. There is no hardfork proposal in sight from the people who agreed to this pact and bitcoin is still stuck with the exact same transaction limit it has had since the limit was put in place about 6 years ago. Gavin has also been publicly smeared by the developers at Blockstream and a plot was made against him to have him removed from the development team. Gavin has now been, for all intents an purposes, expelled from bitcoin development. This has meant that all control of bitcoin development is in the hands of the developers working at Blockstream.
There is a new proposal that offers a market based approach to scaling bitcoin. This essentially lets the market decide. Of course, as usual there has been attacks against it, and verbal attacks from the employees of Blockstream. This has the biggest chance of gaining wide support and solving the problem for good.
To give you an idea of Blockstream; It has hired most of the main and active bitcoin developers and is now synonymous with the "Core" bitcoin development team. They AFAIK no products at all. They have received around $75m in funding. Every single thing they do is supported by theymos. They have started implementing an entirely new economic system for bitcoin against the will of it's users and have blocked any and all attempts to scaling the network in line with the original vision.
Although this comment is ridiculously long, it really only covers the tip of the iceberg. You could write a book on the last two years of bitcoin. The things that have been going on have been mind blowing. One last thing that I think is worth talking about is the u/bashco's claim of vote manipulation.
The users that the video talks about have very very large numbers of downvotes mostly due to them having a very very high chance of being astroturfers. Around about the same time last year when Blockstream came active on the scene every single bitcoin troll disappeared, and I mean literally every single one. In the years before that there were a large number of active anti-bitcoin trolls. They even have an active sub buttcoin. Up until last year you could go down to the bottom of pretty much any thread in bitcoin and see many of the usual trolls who were heavily downvoted for saying something along the lines of "bitcoin is shit", "You guys and your tulips" etc. But suddenly last year they all disappeared. Instead a new type of bitcoin user appeared. Someone who said they were fully in support of bitcoin but they just so happened to support every single thing Blockstream and its employees said and did. They had the exact same tone as the trolls who had disappeared. Their way to talking to people was aggressive, they'd call people names, they had a relatively poor understanding of how bitcoin fundamentally worked. They were extremely argumentative. These users are the majority of the list of that video. When the 10's of thousands of users were censored and expelled from bitcoin they ended up congregating in btc. The strange thing was that the users listed in that video also moved over to btc and spend all day everyday posting troll-like comments and misinformation. Naturally they get heavily downvoted by the real users in btc. They spend their time constantly causing as much drama as possible. At every opportunity they scream about "censorship" in btc while they are happy about the censorship in bitcoin. These people are astroturfers. What someone somewhere worked out, is that all you have to do to take down a community is say that you are on their side. It is an astoundingly effective form of psychological attack.
submitted by CuriousTitmouse to btc [link] [comments]

A criticism of the article "Six monetarist errors: why emission won't feed inflation"

(be gentle, it's my first RI attempt, :P; I hope I can make justice to the subject, this is my layman understanding of many macro subjects which may be flawed...I hope you can illuminate me if I have fallen short of a good RI)
Introduction
So, today a heterodox leaning Argentinian newspaper, Ambito Financiero, published an article criticizing monetarism called "Six monetarist errors: why emission won't feed inflation". I find it doesn't properly address monetarism, confuses it with other "economic schools" for whatever the term is worth today and it may be misleading, so I was inspired to write a refutation and share it with all of you.
In some ways criticizing monetarism is more of a historical discussion given the mainstream has changed since then. Stuff like New Keynesian models are the bleeding edge, not Milton Friedman style monetarism. It's more of a symptom that Argentinian political culture is kind of stuck in the 70s on economics that this things keep being discussed.
Before getting to the meat of the argument, it's good to have in mind some common definitions about money supply measures (specifically, MB, M1 and M2). These definitions apply to US but one can find analogous stuff for other countries.
Argentina, for the lack of access to credit given its economic mismanagement and a government income decrease because of the recession, is monetizing deficits way more than before (like half of the budget, apparently, it's money financed) yet we have seen some disinflation (worth mentioning there are widespread price freezes since a few months ago). The author reasons that monetary phenomena cannot explain inflation properly and that other explanations are needed and condemns monetarism. Here are the six points he makes:
1.Is it a mechanical rule?
This way, we can ask by symmetry: if a certainty exists that when emission increases, inflation increases, the reverse should happen when emission becomes negative, obtaining negative inflation. Nonetheless, we know this happens: prices have an easier time increasing and a lot of rigidity decreasing. So the identity between emission and inflation is not like that, deflation almost never exists and the price movement rhythm cannot be controlled remotely only with money quantity. There is no mechanical relationship between one thing and the other.
First, the low hanging fruit: deflation is not that uncommon, for those of you that live in US and Europe it should be obvious given the difficulties central banks had to achieve their targets, but even Argentina has seen deflation during its depression 20 years ago.
Second, we have to be careful with what we mean by emission. A statement of quantity theory of money (extracted from "Money Growth and Inflation: How Long is the Long-Run?") would say:
Inflation occurs when the average level of prices increases. Individual price increases in and of themselves do not equal inflation, but an overall pattern of price increases does. The price level observed in the economy is that which leads the quantity of money supplied to equal the quantity of money demanded. The quantity of money supplied is largely controlled by the [central bank]. When the supply of money increases or decreases, the price level must adjust to equate the quantity of money demanded throughout the economy with the quantity of money supplied. The quantity of money demanded depends not only on the price level but also on the level of real income, as measured by real gross domestic product (GDP), and a variety of other factors including the level of interest rates and technological advances such as the invention of automated teller machines. Money demand is widely thought to increase roughly proportionally with the price level and with real income. That is, if prices go up by 10 percent, or if real income increases by 10 percent, empirical evidence suggests people want to hold 10 percent more money. When the money supply grows faster than the money demand associated with rising real incomes and other factors, the price level must rise to equate supply and demand. That is, inflation occurs. This situation is often referred to as too many dollars chasing too few goods. Note that this theory does not predict that any money-supply growth will lead to inflation—only that part of money supply growth that exceeds the increase in money demand associated with rising real GDP (holding the other factors constant).
So it's not mere emission, but money supply growing faster than money demand which we should consider. So negative emission is not necessary condition for deflation in this theory.
It's worth mentioning that the relationship with prices is observed for a broad measure of money (M2) and after a lag. From the same source of this excerpt one can observe in Fig. 3a the correlation between inflation and money growth for US becomes stronger the longer data is averaged. Price rigidities don't have to change this long term relationship per se.
But what about causality and Argentina? This neat paper shows regressions in two historical periods: 1976-1989 and 1991-2001. The same relationship between M2 and inflation is observed, stronger in the first, highly inflationary period and weaker in the second, more stable, period. The regressions a 1-1 relationship in the high inflation period but deviates a bit in the low inflation period (yet the relationship is still there). Granger causality, as interpreted in the paper, shows prices caused money growth in the high inflation period (arguably because spending was monetized) while the reverse was true for the more stable period.
So one can argue that there is a mechanical relationship, albeit one that is more complicated than simple QTOM theory. The relationship is complicated too for low inflation economies, it gets more relevant the higher inflation is.
Another point the author makes is that liquidity trap is often ignored. I'll ignore the fact that you need specific conditions for the liquidity trap to be relevant to Argentina and address the point. Worth noting that while market monetarists (not exactly old fashioned monetarists) prefer alternative explanations for monetary policy with very low interest rates, this phenomena has a good monetary basis, as explained by Krugman in his famous japanese liquidity trap paper and his NYT blog (See this and this for some relevant articles). The simplified version is that while inflation may follow M2 growth with all the qualifiers needed, central banks may find difficulties targeting inflation when interest rates are low and agents are used to credible inflation targets. Central banks can change MB, not M2 and in normal times is good enough, but at those times M2 is out of control and "credibly irresponsible" policies are needed to return to normal (a more detailed explanation can be found in that paper I just linked, go for it if you are still curious).
It's not like monetary policy is not good, it's that central banks have to do very unconventional stuff to achieve in a low interest rate environment. It's still an open problem but given symmetric inflation targeting policies are becoming more popular I'm optimistic.
2 - Has inflation one or many causes?
In Argentina we know that the main determinant of inflation is dollar price increases. On that, economic concentration of key markets, utility price adjustments, fuel prices, distributive struggles, external commodity values, expectatives, productive disequilibrium, world interest rates, the economic cycle, stationality and external sector restrictions act on it too.
Let's see a simple example: during Macri's government since mid 2017 to 2019 emission was practically null, but when in 2018 the dollar value doubled, inflation doubled too (it went from 24% to 48% in 2018) and it went up again a year later. We see here that the empirical validity of monetarist theory was absent.
For the first paragraph, one could try to run econometric tests for all those variables, at least from my layman perspective. But given that it doesn't pass the smell test (has any country used that in its favor ignoring monetary policy? Also, I have shown there is at least some evidence for the money-price relationship before), I'll try to address what happened in Macri's government and if monetarism (or at least some reasonable extension of it) cannot account for it.
For a complete description of macroeconomic policy on that period, Sturzenegger account is a good one (even if a bit unreliable given he was the central banker for that government and he is considered to have been a failure). The short version is that central banks uses bonds to manage monetary policy and absorb money; given the history of defaults for the country, the Argentinian Central Bank (BCRA) uses its own peso denominated bonds instead of using treasury bonds. At that time period, the BCRA still financed the treasury but the amount got reduced. Also, it emitted pesos to buy dollar reserves, then sterilized them, maybe risking credibility further.
Near the end of 2017 it was evident the government had limited appetite for budget cuts, it had kind of abandoned its inflation target regime and the classic problem of fiscal dominance emerged, as it's shown in the classic "Unpleasant monetarist arithmetic" paper by Wallace and Sargent. Monetary policy gets less effective when the real value of bonds falls, and raising interest rates may be counterproductive in that environment. Rational expectations are needed to complement QTOM.
So, given that Argentina promised to go nowhere with reform, it was expected that money financing would increase at some point in the future and BCRA bonds were dumped in 2018 and 2019 as their value was perceived to have decreased, and so peso demand decreased. It's not that the dollar value increased and inflation followed, but instead that peso demand fell suddenly!
The IMF deal asked for MB growth to be null or almost null but that doesn't say a lot about M2 (which it's the relevant variable here). Without credible policies, the peso demand keeps falling because bonds are dumped even more (see 2019 for a hilariously brutal example of that).
It's not emission per se, but rather that it doesn't adjust properly to peso demand (which is falling). That doesn't mean increasing interest rates is enough to achieve it, following Wallace and Sargent model.
This is less a strict proof that a monetary phenomenon is involved and more stating that the author hasn't shown any problem with that, there are reasonable models for this situation. It doesn't look like an clear empirical failure to me yet.
3 - Of what we are talking about when we talk about emission?
The author mentions many money measures (M0, M1, M2) but it doesn't address it meaningfully as I tried to do above. It feels more like a rhetorical device because there is no point here except "this stuff exists".
Also, it's worth pointing that there are actual criticisms to make to Friedman on those grounds. He failed to forecast US inflation at some points when he switched to M1 instead of using M2, although he later reverted that. Monetarism kind of "failed" there (it also "failed" in the sense that modern central banks don't use money, but instead interest rates as their main tool; "failed" because despite being outdated, it was influential to modern central banking). This is often brought to this kind of discussions like if economics hasn't moved beyond that. For an account of Friedman thoughts on monetary policies and his failures, see this.
4 - Why do many countries print and inflation doesn't increase there?
There is a mention about the japanese situation in the 90s (the liquidity trap) which I have addressed.
The author mentions that many countries "printed" like crazy during the pandemic, and he says:
Monetarism apologists answer, when confronted with those grave empirical problems that happen in "serious countries", that the population "trusts" their monetary authorities, even increasing the money demand in those place despite the emission. Curious, though, it's an appeal to "trust" implying that the relationship between emission and inflation is not objective, but subjective and cultural: an appreciation that abandons mechanicism and the basic certainty of monetarism, because evaluations and diagnostics, many times ideologic, contextual or historical intervene..
That's just a restatement of applying rational expectations to central bank operations. I don't see a problem with that. Rational expectations is not magic, it's an assessment of future earnings by economic actors. Humans may not 100% rational but central banking somehow works on many countries. You cannot just say that people are ideologues and let it at that. What's your model?
Worth noting the author shills for bitcoin a bit in this section, for more cringe.
5 - Are we talking of a physical science or a social science?
Again, a vague mention of rational expectations ("populists and pro market politicians could do the same policies with different results because of how agents respond ideologically and expectatives") without handling the subject meaningfully. It criticizes universal macroeconomic rules that apply everywhere (this is often used to dismiss evidence from other countries uncritically more than as a meaningful point).
6 - How limits work?
The last question to monetarism allows to recognize it something: effectively we can think on a type of vinculation between emission and inflation in extreme conditions. That means, with no monetary rule, no government has the need of taxes but instead can emit and spend all it needs without consequence. We know it's not like that: no government can print infinitely without undesirable effects.
Ok, good disclaimer, but given what he wrote before, what's the mechanism which causes money printing to be inflationary at some point? It was rejected before but now it seems that it exists. What was even the point of the article?
Now, the problem is thinking monetarism on its extremes: without emission we have inflation sometimes, on others we have no inflation with emission, we know that if we have negative emission that doesn't guarantees us negative inflation, but that if emission is radically uncontrolled there will economic effects.
As I wrote above, that's not what monetarism (even on it's simpler form) says, nor a consequence of it. You can see some deviations in low inflation environment but it's not really Argentina's current situation.
Let's add other problems: the elastic question between money and prices is not evident. Neither is time lags in which can work or be neutral. So the question is the limit cases for monetarism which has some reason but some difficulty in explaining them: by which and it what moments rules work and in which it doesn't.
I find the time lag thing to be a red herring. You can observe empirically and not having a proper short/middle run model doesn't invalidate QTOM in the long run. While it may be that increasing interest rates or freezing MB is not effective, that's less a problem of the theory and more a problem of policy implementation.
Conclusion:
I find that the article doesn't truly get monetarism to begin with (see the points it makes about emission and money demand), neither how it's implemented in practice, nor seems to be aware of more modern theories that, while put money on the background, don't necessarily invalidate it (rational expectation ideas, and eventually New Keynesian stuff which addresses stuff like liquidity traps properly).
There are proper criticisms to be made to Friedman old ideas but he still was a relevant man in his time and the economic community has moved on to new, better theories that have some debt to it. I feel most economic discussion about monetarism in Argentina is a strawman of mainstream economics or an attack on Austrians more than genuine points ("monetarism" is used as a shorthand for those who think inflation is a monetary phenomenon more than referring to Friedman and his disciples per se).
submitted by Neronoah to badeconomics [link] [comments]

Scaling Reddit Community Points with Arbitrum Rollup: a piece of cake

Scaling Reddit Community Points with Arbitrum Rollup: a piece of cake
https://preview.redd.it/b80c05tnb9e51.jpg?width=2550&format=pjpg&auto=webp&s=850282c1a3962466ed44f73886dae1c8872d0f31
Submitted for consideration to The Great Reddit Scaling Bake-Off
Baked by the pastry chefs at Offchain Labs
Please send questions or comments to [[email protected] ](mailto:[email protected])
1. Overview
We're excited to submit Arbitrum Rollup for consideration to The Great Reddit Scaling Bake-Off. Arbitrum Rollup is the only Ethereum scaling solution that supports arbitrary smart contracts without compromising on Ethereum's security or adding points of centralization. For Reddit, this means that Arbitrum can not only scale the minting and transfer of Community Points, but it can foster a creative ecosystem built around Reddit Community Points enabling points to be used in a wide variety of third party applications. That's right -- you can have your cake and eat it too!
Arbitrum Rollup isn't just Ethereum-style. Its Layer 2 transactions are byte-for-byte identical to Ethereum, which means Ethereum users can continue to use their existing addresses and wallets, and Ethereum developers can continue to use their favorite toolchains and development environments out-of-the-box with Arbitrum. Coupling Arbitrum’s tooling-compatibility with its trustless asset interoperability, Reddit not only can scale but can onboard the entire Ethereum community at no cost by giving them the same experience they already know and love (well, certainly know).
To benchmark how Arbitrum can scale Reddit Community Points, we launched the Reddit contracts on an Arbitrum Rollup chain. Since Arbitrum provides full Solidity support, we didn't have to rewrite the Reddit contracts or try to mimic their functionality using an unfamiliar paradigm. Nope, none of that. We launched the Reddit contracts unmodified on Arbitrum Rollup complete with support for minting and distributing points. Like every Arbitrum Rollup chain, the chain included a bridge interface in which users can transfer Community Points or any other asset between the L1 and L2 chains. Arbitrum Rollup chains also support dynamic contract loading, which would allow third-party developers to launch custom ecosystem apps that integrate with Community Points on the very same chain that runs the Reddit contracts.
1.1 Why Ethereum
Perhaps the most exciting benefit of distributing Community Points using a blockchain is the ability to seamlessly port points to other applications and use them in a wide variety of contexts. Applications may include simple transfers such as a restaurant that allows Redditors to spend points on drinks. Or it may include complex smart contracts -- such as placing Community Points as a wager for a multiparty game or as collateral in a financial contract.
The common denominator between all of the fun uses of Reddit points is that it needs a thriving ecosystem of both users and developers, and the Ethereum blockchain is perhaps the only smart contract platform with significant adoption today. While many Layer 1 blockchains boast lower cost or higher throughput than the Ethereum blockchain, more often than not, these attributes mask the reality of little usage, weaker security, or both.
Perhaps another platform with significant usage will rise in the future. But today, Ethereum captures the mindshare of the blockchain community, and for Community Points to provide the most utility, the Ethereum blockchain is the natural choice.
1.2 Why Arbitrum
While Ethereum's ecosystem is unmatched, the reality is that fees are high and capacity is too low to support the scale of Reddit Community Points. Enter Arbitrum. Arbitrum Rollup provides all of the ecosystem benefits of Ethereum, but with orders of magnitude more capacity and at a fraction of the cost of native Ethereum smart contracts. And most of all, we don't change the experience from users. They continue to use the same wallets, addresses, languages, and tools.
Arbitrum Rollup is not the only solution that can scale payments, but it is the only developed solution that can scale both payments and arbitrary smart contracts trustlessly, which means that third party users can build highly scalable add-on apps that can be used without withdrawing money from the Rollup chain. If you believe that Reddit users will want to use their Community Points in smart contracts--and we believe they will--then it makes the most sense to choose a single scaling solution that can support the entire ecosystem, eliminating friction for users.
We view being able to run smart contracts in the same scaling solution as fundamentally critical since if there's significant demand in running smart contracts from Reddit's ecosystem, this would be a load on Ethereum and would itself require a scaling solution. Moreover, having different scaling solutions for the minting/distribution/spending of points and for third party apps would be burdensome for users as they'd have to constantly shuffle their Points back and forth.
2. Arbitrum at a glance
Arbitrum Rollup has a unique value proposition as it offers a combination of features that no other scaling solution achieves. Here we highlight its core attributes.
Decentralized. Arbitrum Rollup is as decentralized as Ethereum. Unlike some other Layer 2 scaling projects, Arbitrum Rollup doesn't have any centralized components or centralized operators who can censor users or delay transactions. Even in non-custodial systems, centralized components provide a risk as the operators are generally incentivized to increase their profit by extracting rent from users often in ways that severely degrade user experience. Even if centralized operators are altruistic, centralized components are subject to hacking, coercion, and potential liability.
Massive Scaling. Arbitrum achieves order of magnitude scaling over Ethereum's L1 smart contracts. Our software currently supports 453 transactions-per-second for basic transactions (at 1616 Ethereum gas per tx). We have a lot of room left to optimize (e.g. aggregating signatures), and over the next several months capacity will increase significantly. As described in detail below, Arbitrum can easily support and surpass Reddit's anticipated initial load, and its capacity will continue to improve as Reddit's capacity needs grow.
Low cost. The cost of running Arbitrum Rollup is quite low compared to L1 Ethereum and other scaling solutions such as those based on zero-knowledge proofs. Layer 2 fees are low, fixed, and predictable and should not be overly burdensome for Reddit to cover. Nobody needs to use special equipment or high-end machines. Arbitrum requires validators, which is a permissionless role that can be run on any reasonable on-line machine. Although anybody can act as a validator, in order to protect against a “tragedy of the commons” and make sure reputable validators are participating, we support a notion of “invited validators” that are compensated for their costs. In general, users pay (low) fees to cover the invited validators’ costs, but we imagine that Reddit may cover this cost for its users. See more on the costs and validator options below.
Ethereum Developer Experience. Not only does Arbitrum support EVM smart contracts, but the developer experience is identical to that of L1 Ethereum contracts and fully compatible with Ethereum tooling. Developers can port existing Solidity apps or write new ones using their favorite and familiar toolchains (e.g. Truffle, Buidler). There are no new languages or coding paradigms to learn.
Ethereum wallet compatibility. Just as in Ethereum, Arbitrum users need only hold keys, but do not have to store any coin history or additional data to protect or access their funds. Since Arbitrum transactions are semantically identical to Ethereum L1 transactions, existing Ethereum users can use their existing Ethereum keys with their existing wallet software such as Metamask.
Token interoperability. Users can easily transfer their ETH, ERC-20 and ERC-721 tokens between Ethereum and the Arbitrum Rollup chain. As we explain in detail below, it is possible to mint tokens in L2 that can subsequently be withdrawn and recognized by the L1 token contract.
Fast finality. Transactions complete with the same finality time as Ethereum L1 (and it's possible to get faster finality guarantees by trading away trust assumptions; see the Arbitrum Rollup whitepaper for details).
Non-custodial. Arbitrum Rollup is a non-custodial scaling solution, so users control their funds/points and neither Reddit nor anyone else can ever access or revoke points held by users.
Censorship Resistant. Since it's completely decentralized, and the Arbitrum protocol guarantees progress trustlessly, Arbitrum Rollup is just as censorship-proof as Ethereum.
Block explorer. The Arbitrum Rollup block explorer allows users to view and analyze transactions on the Rollup chain.
Limitations
Although this is a bake-off, we're not going to sugar coat anything. Arbitrum Rollup, like any Optimistic Rollup protocol, does have one limitation, and that's the delay on withdrawals.
As for the concrete length of the delay, we've done a good deal of internal modeling and have blogged about this as well. Our current modeling suggests a 3-hour delay is sufficient (but as discussed in the linked post there is a tradeoff space between the length of the challenge period and the size of the validators’ deposit).
Note that this doesn't mean that the chain is delayed for three hours. Arbitrum Rollup supports pipelining of execution, which means that validators can keep building new states even while previous ones are “in the pipeline” for confirmation. As the challenge delays expire for each update, a new state will be confirmed (read more about this here).
So activity and progress on the chain are not delayed by the challenge period. The only thing that's delayed is the consummation of withdrawals. Recall though that any single honest validator knows immediately (at the speed of L1 finality) which state updates are correct and can guarantee that they will eventually be confirmed, so once a valid withdrawal has been requested on-chain, every honest party knows that the withdrawal will definitely happen. There's a natural place here for a liquidity market in which a validator (or someone who trusts a validator) can provide withdrawal loans for a small interest fee. This is a no-risk business for them as they know which withdrawals will be confirmed (and can force their confirmation trustlessly no matter what anyone else does) but are just waiting for on-chain finality.
3. The recipe: How Arbitrum Rollup works
For a description of the technical components of Arbitrum Rollup and how they interact to create a highly scalable protocol with a developer experience that is identical to Ethereum, please refer to the following documents:
Arbitrum Rollup Whitepaper
Arbitrum academic paper (describes a previous version of Arbitrum)
4. Developer docs and APIs
For full details about how to set up and interact with an Arbitrum Rollup chain or validator, please refer to our developer docs, which can be found at https://developer.offchainlabs.com/.
Note that the Arbitrum version described on that site is older and will soon be replaced by the version we are entering in Reddit Bake-Off, which is still undergoing internal testing before public release.
5. Who are the validators?
As with any Layer 2 protocol, advancing the protocol correctly requires at least one validator (sometimes called block producers) that is honest and available. A natural question is: who are the validators?
Recall that the validator set for an Arbitrum chain is open and permissionless; anyone can start or stop validating at will. (A useful analogy is to full nodes on an L1 chain.) But we understand that even though anyone can participate, Reddit may want to guarantee that highly reputable nodes are validating their chain. Reddit may choose to validate the chain themselves and/or hire third-party validators.To this end, we have begun building a marketplace for validator-for-hire services so that dapp developers can outsource validation services to reputable nodes with high up-time. We've announced a partnership in which Chainlink nodes will provide Arbitrum validation services, and we expect to announce more partnerships shortly with other blockchain infrastructure providers.
Although there is no requirement that validators are paid, Arbitrum’s economic model tracks validators’ costs (e.g. amount of computation and storage) and can charge small fees on user transactions, using a gas-type system, to cover those costs. Alternatively, a single party such as Reddit can agree to cover the costs of invited validators.
6. Reddit Contract Support
Since Arbitrum contracts and transactions are byte-for-byte compatible with Ethereum, supporting the Reddit contracts is as simple as launching them on an Arbitrum chain.
Minting. Arbitrum Rollup supports hybrid L1/L2 tokens which can be minted in L2 and then withdrawn onto the L1. An L1 contract at address A can make a special call to the EthBridge which deploys a "buddy contract" to the same address A on an Arbitrum chain. Since it's deployed at the same address, users can know that the L2 contract is the authorized "buddy" of the L1 contract on the Arbitrum chain.
For minting, the L1 contract is a standard ERC-20 contract which mints and burns tokens when requested by the L2 contract. It is paired with an ERC-20 contract in L2 which mints tokens based on whatever programmer provided minting facility is desired and burns tokens when they are withdrawn from the rollup chain. Given this base infrastructure, Arbitrum can support any smart contract based method for minting tokens in L2, and indeed we directly support Reddit's signature/claim based minting in L2.
Batch minting. What's better than a mint cookie? A whole batch! In addition to supporting Reddit’s current minting/claiming scheme, we built a second minting design, which we believe outperforms the signature/claim system in many scenarios.
In the current system, Reddit periodically issues signed statements to users, who then take those statements to the blockchain to claim their tokens. An alternative approach would have Reddit directly submit the list of users/amounts to the blockchain and distribute the tokens to the users without the signature/claim process.
To optimize the cost efficiency of this approach, we designed an application-specific compression scheme to minimize the size of the batch distribution list. We analyzed the data from Reddit's previous distributions and found that the data is highly compressible since token amounts are small and repeated, and addresses appear multiple times. Our function groups transactions by size, and replaces previously-seen addresses with a shorter index value. We wrote client code to compress the data, wrote a Solidity decompressing function, and integrated that function into Reddit’s contract running on Arbitrum.
When we ran the compression function on the previous Reddit distribution data, we found that we could compress batched minting data down to to 11.8 bytes per minting event (averaged over a 6-month trace of Reddit’s historical token grants)compared with roughly 174 bytes of on-chain data needed for the signature claim approach to minting (roughly 43 for an RLP-encoded null transaction + 65 for Reddit's signature + 65 for the user's signature + roughly 8 for the number of Points) .
The relative benefit of the two approaches with respect to on-chain call data cost depends on the percentage of users that will actually claim their tokens on chain. With the above figures, batch minting will be cheaper if roughly 5% of users redeem their claims. We stress that our compression scheme is not Arbitrum-specific and would be beneficial in any general-purpose smart contract platform.
8. Benchmarks and costs
In this section, we give the full costs of operating the Reddit contracts on an Arbitrum Rollup chain including the L1 gas costs for the Rollup chain, the costs of computation and storage for the L2 validators as well as the capital lockup requirements for staking.
Arbitrum Rollup is still on testnet, so we did not run mainnet benchmarks. Instead, we measured the L1 gas cost and L2 workload for Reddit operations on Arbitrum and calculated the total cost assuming current Ethereum gas prices. As noted below in detail, our measurements do not assume that Arbitrum is consuming the entire capacity of Ethereum. We will present the details of our model now, but for full transparency you can also play around with it yourself and adjust the parameters, by copying the spreadsheet found here.
Our cost model is based on measurements of Reddit’s contracts, running unmodified (except for the addition of a batch minting function) on Arbitrum Rollup on top of Ethereum.
On the distribution of transactions and frequency of assertions. Reddit's instructions specify the following minimum parameters that submissions should support:
Over a 5 day period, your scaling PoC should be able to handle:
  • 100,000 point claims (minting & distributing points)
  • 25,000 subscriptions
  • 75,000 one-off points burning
  • 100,000 transfers
We provide the full costs of operating an Arbitrum Rollup chain with this usage under the assumption that tokens are minted or granted to users in batches, but other transactions are uniformly distributed over the 5 day period. Unlike some other submissions, we do not make unrealistic assumptions that all operations can be submitted in enormous batches. We assume that batch minting is done in batches that use only a few percent on an L1 block’s gas, and that other operations come in evenly over time and are submitted in batches, with one batch every five minutes to keep latency reasonable. (Users are probably already waiting for L1 finality, which takes at least that long to achieve.)
We note that assuming that there are only 300,000 transactions that arrive uniformly over the 5 day period will make our benchmark numbers lower, but we believe that this will reflect the true cost of running the system. To see why, say that batches are submitted every five minutes (20 L1 blocks) and there's a fixed overhead of c bytes of calldata per batch, the cost of which will get amortized over all transactions executed in that batch. Assume that each individual transaction adds a marginal cost of t. Lastly assume the capacity of the scaling system is high enough that it can support all of Reddit's 300,000 transactions within a single 20-block batch (i.e. that there is more than c + 300,000*t byes of calldata available in 20 blocks).
Consider what happens if c, the per-batch overhead, is large (which it is in some systems, but not in Arbitrum). In the scenario that transactions actually arrive at the system's capacity and each batch is full, then c gets amortized over 300,000 transactions. But if we assume that the system is not running at capacity--and only receives 300,000 transactions arriving uniformly over 5 days-- then each 20-block assertion will contain about 200 transactions, and thus each transaction will pay a nontrivial cost due to c.
We are aware that other proposals presented scaling numbers assuming that 300,000 transactions arrived at maximum capacity and was executed in a single mega-transaction, but according to our estimates, for at least one such report, this led to a reported gas price that was 2-3 orders of magnitude lower than it would have been assuming uniform arrival. We make more realistic batching assumptions, and we believe Arbitrum compares well when batch sizes are realistic.
Our model. Our cost model includes several sources of cost:
  • L1 gas costs: This is the cost of posting transactions as calldata on the L1 chain, as well as the overhead associated with each batch of transactions, and the L1 cost of settling transactions in the Arbitrum protocol.
  • Validator’s staking costs: In normal operation, one validator will need to be staked. The stake is assumed to be 0.2% of the total value of the chain (which is assumed to be $1 per user who is eligible to claim points). The cost of staking is the interest that could be earned on the money if it were not staked.
  • Validator computation and storage: Every validator must do computation to track the chain’s processing of transactions, and must maintain storage to keep track of the contracts’ EVM storage. The cost of computation and storage are estimated based on measurements, with the dollar cost of resources based on Amazon Web Services pricing.
It’s clear from our modeling that the predominant cost is for L1 calldata. This will probably be true for any plausible rollup-based system.
Our model also shows that Arbitrum can scale to workloads much larger than Reddit’s nominal workload, without exhausting L1 or L2 resources. The scaling bottleneck will ultimately be calldata on the L1 chain. We believe that cost could be reduced substantially if necessary by clever encoding of data. (In our design any compression / decompression of L2 transaction calldata would be done by client software and L2 programs, never by an L1 contract.)
9. Status of Arbitrum Rollup
Arbitrum Rollup is live on Ethereum testnet. All of the code written to date including everything included in the Reddit demo is open source and permissively licensed under the Apache V2 license. The first testnet version of Arbitrum Rollup was released on testnet in February. Our current internal version, which we used to benchmark the Reddit contracts, will be released soon and will be a major upgrade.
Both the Arbitrum design as well as the implementation are heavily audited by independent third parties. The Arbitrum academic paper was published at USENIX Security, a top-tier peer-reviewed academic venue. For the Arbitrum software, we have engaged Trail of Bits for a security audit, which is currently ongoing, and we are committed to have a clean report before launching on Ethereum mainnet.
10. Reddit Universe Arbitrum Rollup Chain
The benchmarks described in this document were all measured using the latest internal build of our software. When we release the new software upgrade publicly we will launch a Reddit Universe Arbitrum Rollup chain as a public demo, which will contain the Reddit contracts as well as a Uniswap instance and a Connext Hub, demonstrating how Community Points can be integrated into third party apps. We will also allow members of the public to dynamically launch ecosystem contracts. We at Offchain Labs will cover the validating costs for the Reddit Universe public demo.
If the folks at Reddit would like to evaluate our software prior to our public demo, please email us at [email protected] and we'd be more than happy to provide early access.
11. Even more scaling: Arbitrum Sidechains
Rollups are an excellent approach to scaling, and we are excited about Arbitrum Rollup which far surpasses Reddit's scaling needs. But looking forward to Reddit's eventual goal of supporting hundreds of millions of users, there will likely come a time when Reddit needs more scaling than any Rollup protocol can provide.
While Rollups greatly reduce costs, they don't break the linear barrier. That is, all transactions have an on-chain footprint (because all calldata must be posted on-chain), albeit a far smaller one than on native Ethereum, and the L1 limitations end up being the bottleneck for capacity and cost. Since Ethereum has limited capacity, this linear use of on-chain resources means that costs will eventually increase superlinearly with traffic.
The good news is that we at Offchain Labs have a solution in our roadmap that can satisfy this extreme-scaling setting as well: Arbitrum AnyTrust Sidechains. Arbitrum Sidechains are similar to Arbitrum Rollup, but deviate in that they name a permissioned set of validators. When a chain’s validators agree off-chain, they can greatly reduce the on-chain footprint of the protocol and require almost no data to be put on-chain. When validators can't reach unanimous agreement off-chain, the protocol reverts to Arbitrum Rollup. Technically, Arbitrum Sidechains can be viewed as a hybrid between state channels and Rollup, switching back and forth as necessary, and combining the performance and cost that state channels can achieve in the optimistic case, with the robustness of Rollup in other cases. The core technical challenge is how to switch seamlessly between modes and how to guarantee that security is maintained throughout.
Arbitrum Sidechains break through this linear barrier, while still maintaining a high level of security and decentralization. Arbitrum Sidechains provide the AnyTrust guarantee, which says that as long as any one validator is honest and available (even if you don't know which one will be), the L2 chain is guaranteed to execute correctly according to its code and guaranteed to make progress. Unlike in a state channel, offchain progress does not require unanimous consent, and liveness is preserved as long as there is a single honest validator.
Note that the trust model for Arbitrum Sidechains is much stronger than for typical BFT-style chains which introduce a consensus "voting" protocols among a small permissioned group of validators. BFT-based protocols require a supermajority (more than 2/3) of validators to agree. In Arbitrum Sidechains, by contrast, all you need is a single honest validator to achieve guaranteed correctness and progress. Notice that in Arbitrum adding validators strictly increases security since the AnyTrust guarantee provides correctness as long as any one validator is honest and available. By contrast, in BFT-style protocols, adding nodes can be dangerous as a coalition of dishonest nodes can break the protocol.
Like Arbitrum Rollup, the developer and user experiences for Arbitrum Sidechains will be identical to that of Ethereum. Reddit would be able to choose a large and diverse set of validators, and all that they would need to guarantee to break through the scaling barrier is that a single one of them will remain honest.
We hope to have Arbitrum Sidechains in production in early 2021, and thus when Reddit reaches the scale that surpasses the capacity of Rollups, Arbitrum Sidechains will be waiting and ready to help.
While the idea to switch between channels and Rollup to get the best of both worlds is conceptually simple, getting the details right and making sure that the switch does not introduce any attack vectors is highly non-trivial and has been the subject of years of our research (indeed, we were working on this design for years before the term Rollup was even coined).
12. How Arbitrum compares
We include a comparison to several other categories as well as specific projects when appropriate. and explain why we believe that Arbitrum is best suited for Reddit's purposes. We focus our attention on other Ethereum projects.
Payment only Rollups. Compared to Arbitrum Rollup, ZK-Rollups and other Rollups that only support token transfers have several disadvantages:
  • As outlined throughout the proposal, we believe that the entire draw of Ethereum is in its rich smart contracts support which is simply not achievable with today's zero-knowledge proof technology. Indeed, scaling with a ZK-Rollup will add friction to the deployment of smart contracts that interact with Community Points as users will have to withdraw their coins from the ZK-Rollup and transfer them to a smart contract system (like Arbitrum). The community will be best served if Reddit builds on a platform that has built-in, frictionless smart-contract support.
  • All other Rollup protocols of which we are aware employ a centralized operator. While it's true that users retain custody of their coins, the centralized operator can often profit from censoring, reordering, or delaying transactions. A common misconception is that since they're non-custodial protocols, a centralized sequencer does not pose a risk but this is incorrect as the sequencer can wreak havoc or shake down users for side payments without directly stealing funds.
  • Sidechain type protocols can eliminate some of these issues, but they are not trustless. Instead, they require trust in some quorum of a committee, often requiring two-third of the committee to be honest, compared to rollup protocols like Arbitrum that require only a single honest party. In addition, not all sidechain type protocols have committees that are diverse, or even non-centralized, in practice.
  • Plasma-style protocols have a centralized operator and do not support general smart contracts.
13. Concluding Remarks
While it's ultimately up to the judges’ palate, we believe that Arbitrum Rollup is the bakeoff choice that Reddit kneads. We far surpass Reddit's specified workload requirement at present, have much room to optimize Arbitrum Rollup in the near term, and have a clear path to get Reddit to hundreds of millions of users. Furthermore, we are the only project that gives developers and users the identical interface as the Ethereum blockchain and is fully interoperable and tooling-compatible, and we do this all without any new trust assumptions or centralized components.
But no matter how the cookie crumbles, we're glad to have participated in this bake-off and we thank you for your consideration.
About Offchain Labs
Offchain Labs, Inc. is a venture-funded New York company that spun out of Princeton University research, and is building the Arbitrum platform to usher in the next generation of scalable, interoperable, and compatible smart contracts. Offchain Labs is backed by Pantera Capital, Compound VC, Coinbase Ventures, and others.
Leadership Team
Ed Felten
Ed Felten is Co-founder and Chief Scientist at Offchain Labs. He is on leave from Princeton University, where he is the Robert E. Kahn Professor of Computer Science and Public Affairs. From 2015 to 2017 he served at the White House as Deputy United States Chief Technology Officer and senior advisor to the President. He is an ACM Fellow and member of the National Academy of Engineering. Outside of work, he is an avid runner, cook, and L.A. Dodgers fan.
Steven Goldfeder
Steven Goldfeder is Co-founder and Chief Executive Officer at Offchain Labs. He holds a PhD from Princeton University, where he worked at the intersection of cryptography and cryptocurrencies including threshold cryptography, zero-knowledge proof systems, and post-quantum signatures. He is a co-author of Bitcoin and Cryptocurrency Technologies, the leading textbook on cryptocurrencies, and he has previously worked at Google and Microsoft Research, where he co-invented the Picnic signature algorithm. When not working, you can find Steven spending time with his family, taking a nature walk, or twisting balloons.
Harry Kalodner
Harry Kalodner is Co-founder and Chief Technology Officer at Offchain Labs where he leads the engineering team. Before the company he attended Princeton as a Ph.D candidate where his research explored economics, anonymity, and incentive compatibility of cryptocurrencies, and he also has worked at Apple. When not up at 3:00am writing code, Harry occasionally sleeps.
submitted by hkalodner to ethereum [link] [comments]

[FINALLY] BITCOIN TESTING 10k THIS WEEK! Bitcoin Price Analysis & Bybit Profit Is Bitcoin Money? Bitcoin Predictions for 2015 Hitler on Bitcoin - 2015 Bitcoin: When will the macro-level trendline break?

Bitcoin history for 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019. Bitcoin price chart since 2009 to 2019. The historical data and rates of BTC ... The price of a bitcoin has been on the rise of late, but the year wasn't all good news. Let's look back to the few highs and many lows of 2015. Bitcoin: will 2015 be a make-or-break year? It is barely understood by the general public, its value is in freefall and it has a serious image problem. Daniel Roberts asks can the currency survive ... Bitcoin has dramatically ended 2015 as the best performing currency of the year, surpassing the growth rate and value of both emerging and dominant currencies including pound sterling, Japanese yen, Chinese Yuan and the US Dollar. Bitcoin, a digital and decentralized cryptocurrency, staged a late comeback in 2015 to overtake the dollar by a whopping 35% by the end of the year. Bitcoin is no stranger to extremes. During the year it came into the mainstream in 2013, Bitcoin gained 5,429% to easily surpass all other currencies in gains. However, the following year it would ...

[index] [49677] [8533] [30984] [493] [15414] [34401] [7336] [20715] [6633] [7240]

[FINALLY] BITCOIN TESTING 10k THIS WEEK! Bitcoin Price Analysis & Bybit Profit

We all know the multi-year trendline that everyone likes to draw, but when will it break? In this video, we take a somewhat dubious approach by fitting the time intervals between tests of the ... The original video is at https://www.youtube.com/watch?v=4FAds5Mz53w but has not subtitles unless manually activated. I made then a version with subtitles as... This video is unavailable. Watch Queue Queue It’s a store of value although it’s got a lot of volatility, but it’s also a technology. I think bitcoin may be like the Neanderthals in the sense that the currency itself goes extinct the ... Get your Bitshares wallet here: http://linksfrom.us/cryptobits http://www.bitshares.TV 2015: The year of the decentralized bitcoin exchange (interview with D...

#