[Question] Contract enforcement, doomsday, risk, etc (this topic is not very focused)

[jgeewax]

Bitshares uses a formal definition of collateral which requires an overestimation of collateral and results in a completely illiquid network.

Interesting – wasn’t aware of that.

We have no formal definition, in fact at our core we have only a 15% reserve, meaning our Nubits aren’t fully collateralized either, same as our contracts.

Learning more and more Any chance you can point me at something to read about how this all works? Maybe I overlooked something?

[Nagalim]

It’s all ad-hoc. We’re still trying to figure it all out ourselves.

[Passed] T4 Circulating NBT Threshold

Motion RIPEMD160 hash: b1ef96aed5c7f9dec482467b254b40c82bf66d23 =##=##=##=##=##=## Motion hash starts with this line ##=##=##=##=##=##= The threshold at which Tier 4 funds begin to be used for buying back NuShares shall be promoted to a percentage of the outstanding Nubits in the network, dubbed 'Circulating Nubits'. The number of circulating nubits is equal to the total supply of nubits minus the nubits held in Tier 4 and Tier 6 sell side, which are assumed to be owned by the Network and h…

Have you seen this one?

Finalized evolution of liquidity operations

The following is the finalized version of the motion I am advancing to guide development of our liquidity operations. The motion hash you need to enter into your client to vote for it is: 65CB60D096508A7FA9ECC2017B38BC3AFEB5663D *****Begin motion***** Liquidity operations should have the following tiers. The first tier is available to the market immediately, but is at higher risk of loss than the other tiers. Subsequent tiers have the disadvantage of not being immediately available but featu…

[jgeewax]

It’s all ad-hoc. We’re still trying to figure it all out ourselves.

Gotcha.

Out of curiosity, do we have any idea who the major shareholders are? Or guarantee that no single individual “owns” more than 50% of the shares?

[Nagalim]

The only guarentee we have is that each share was compensated with at least $0.002 that was put into Nu Coffers.

[jgeewax]

Again, sorry for the newbie question, but I have to ask: Is there a reason I shouldn’t be worried at all by that? (Hopefully you’re reading that as me being curious and not trying to be snarky – I swear I’m not trying to be obnoxious…)

Back of the envelope math:

• 820,586,132 NSR (blockexplorer.nu) * $0.002 USD == ~$1.6m USD

So theoretically, if someone was covertly buying up shares, and had a few million bucks to spare (which isn’t that rare nowadays), and they decided “fuck it, let’s mess with these people”, they could basically start granting NBT to their addresses and passing joke motions, etc?

(Again, totally asking out of curiosity – not trying to attack Nu, just want to understand the limits and the potential weaknesses and attack points…)

[Nagalim]

Sure, someone who invested $800k could go ahead and crap their investment down the tubes to absorb our $200k buy side liquidity.

[jgeewax]

Well it might be more subtle than that. Someone with $800k can start issuing themselves NBT in small amounts, hoping to go unnoticed, right?

As long as the amounts granted are “small enough” to not undermine the whole project, we would continue with things right?

If this happened (“Holy shit, someone just got granted 50 NBT, but it’s not in anyone’s data feed, and there was no motion on discuss.nubits.com…”), what would we do?

[Nagalim]

I would prolly sell all my NSR immediately. Also, it would be more like “Why does that grant have 25% support when no one’s voting for it?” It wouldn’t just get granted without people taking notice.

[CoinGame]

We don’t have plans for that event. It is a known risk, but has always been considered very remotely possible.

[Nagalim]

It’s akin to a hostile hard fork of the Bitcoin miners (basically, a 51% attack). Prices would plummet.

Note that if you have 51%, why would you pass a grant? Why not just 6 conf (or 15 conf or whatever) as many double spends as you want? It would take people longer to notice.

[jgeewax]

OK, so basically if anyone were to abuse the power, you’re saying you at least would throw in the towel saying “this experiment failed”?

Which… sounds like it would set in motion a bunch of events leading to NBT and NSR basically becoming worthless.

So basically, we have to hope that this guy is neither a current shareholder, nor capable of getting 50+% NSRs…

Note that if you have 51%, why would you pass a grant?

Good point. The only reason I can think is because the money-printing machine is basically clicking a button in the UI, versus double-spending which is a bit more technically involved? (I think?)

[Nagalim]

Yes, if the network succumbed to a hostile hardfork I would throw in the towel (as I would for bitcoin if all of a sudden core developers and 51% of the miners started making new coinbase BTC at their addresses). Basically, the assumption with Proof of Stake is that the network is constantly being 51% attacked by all the right people.

[jgeewax]

It’s akin to a hostile hard fork of the Bitcoin miners (basically, a 51% attack).

This is a good point, however there’s a recurring cost to 50% of the mining power, whereas a 51% attack on Nu would be a one-time purchase and then you’re done.

I also don’t have numbers, but I’m under the impression that we’re talking about O($10k USD) per hour to sustain a 51% attack on the current BTC network… which means the joker would need much deeper pockets…

[CoinGame]

It takes 5001 blocks in any 10,000 block window to pass a grant or a motion. At one minute block times it would take (with 100% of the blocks voting on that grant) at the soonest 3.4 days for someone to pass such a grant. If there’s a system in place monitoring the votes then the network can be alerted to such an abuse and developers may be able to intervene. That might be controversial itself though.

[Nagalim]

Buying 51% of the NSR network is not just a ‘one time purchase’. Either you’d have to basically be JordanLee, or you’d have to buy up the network, which means prices would skyrocket and people would hold onto their NSR tight. It’s a losing battle.

[jgeewax]

Let me start by saying I love how many Batman references I get to make in this thread. I hope you guys are laughing a bit with me on this…

Either you’d have to basically be JordanLee, or you’d have to buy up the network, which means prices would skyrocket and people would hold onto their NSR tight.

Sure, let’s say the price-tag goes up by 10x or even 100x. $100m USD is (unfortunately ) not that much money anymore, so buying these up might be more expensive, but certainly possible.

To avoid the economics conversation there though, let’s just say you’re JordanLee:

Who somehow gets corrupted and becomes this guy:

Who then decides to trash Nu, for whatever reason…

Are we all in agreement that this is a very real possibility?

To give you some context, I’m hoping to do some very real stuff with NBT, because I think it’s amazing. However it seems to me that an attack on BTC would be absurdly expensive and is therefore much more unlikely, whereas an attack on NBT seems much more likely and much less expensive, so that has me a smidge worried.

I don’t think these things would happen, but if I’m doing something “real” with NBT, people will ask “how expensive and likely is an attack?”, I’d rather say “as unlikely as BTC”, but it seems a bit like the only firm and truthful answer is “welp, there’s this guy, who if he got pissed off, could take down the entire system… he won’t though…”

(I’m definitely hoping I’m wrong, so please someone tell me I am ?)

[CoinGame]

I would love to say with confidence that you’re wrong. Realistically this is an experimental project that is totally unique in the cryptocurrency world. Outside of the concerns you mentioned there are probably many other attack vectors that are unique to this project as well that we haven’t even thought of yet. It has a lot of moving parts. I think you’ve been around long enough to see people just show up and help push things forward a little bit at a time. You’re another piece of that puzzle with the ideas you’ve brought and nobody is exactly sure what the big picture is. Everything could fall apart tomorrow. I think it would be as irresponsible for anyone to tell you it’s a bullet proof system right now, as it would have been for anyone to say the same about Bitcoin four years ago.

Though if I had to give you a completely biased non-objective opinion on the matter I would say you’re wrong. I’ve been on the development team since it was a secret project in early 2014 and I don’t think the possibilities that have been mentioned here are realistic. I wouldn’t continue to spend my time on the project if I thought they were.

Only time will tell if i’m playing my cards right.

I will add though that we’ve already had a lot of bumps and bruises to the project. You can read about them all on our project history page. https://docs.nubits.com/history/ We’ve been able to bounce back, pivot, evolve, and I think it has a lot to do with how the voting system is designed. Maybe seeing it be able to survive through so much already and maintain its goals is why I feel so positive about it. It has not been an easy path.

[jgeewax]

That is a rockin’ answer. Love it.

So right now: experiment, risky, bumps in the road, totally vulnerable to attack, however already pretty far along that path, so while still likely to be bumpy in the future, unlikely that the road leads off a cliff.

SGTM

[Nagalim]

Just to point out, you say that a “Jordan Lee Attack” is scary, but you make reference to a ‘cost’. The Jordan Lee Attack has no cost, it is a purely opportunistic attack. The 51% attack on a PoS system outside of initial distribution is still an extremely expensive attack, in my opinion akin to a prolonged 51% attack on a PoW system.

[Cybnate]

Just like to jump into this interesting, slightly derailed thread.

(I’m genuinely hoping that this thread ends with “OK cool, sounds like we’ve already got this all covered”.)

No, we haven’t (yet). We are on a road to determine what we need to run a DAO managing stable coins. In the last year we managed to maintain a reasonably solid peg. That was bumpy road indeed and we had a lot of lessons learnt which made us stronger.

guarantee that no single individual “owns” more than 50% of the shares

No guarantees, would be interested to hear whether you have one keeping the Shareholders kind of anonymous. The principle of a DAO is that there is no Shareholders register.

if someone was covertly buying up shares, and had a few million bucks to spare

Yes, with a few million you can play a lot around, not only with Nu. There are many companies and other organisations in this world you can ground with that amount of money. The question is why would Nu stand out for them.

OK, so basically if anyone were to abuse the power, you’re saying you at least would throw in the towel saying “this experiment failed”?

We don’t have a war machine or a legal team at hand to fight abusers as they are probably anonymous anyway or smart enough to hide in places where it is not worth pursuing them.

let’s say the price-tag goes up by 10x or even 100x. $100m USD is (unfortunately ) not that much money anymore, so buying these up might be more expensive, but certainly possible.

Goods and services in this world can always be bought at some price and people will get corrupted :-0

So right now: experiment, risky, bumps in the road, totally vulnerable to attack, however already pretty far along that path, so while still likely to be bumpy in the future, unlikely that the road leads off a cliff.

Ever driven a car? Risky, bumps in the road, vulnerable to attack, pretty long around, still be bumpy for a while, many cliffs and idots to circumvent every day. Does that mean you are not driving a car for that reason? Probably not.

Point what I’m making is that every activity comes with a risk. Unless the same activity can be done with less risk or in other better ways it can still be profitable to persue.

[quote=“jgeewax, post:32, topic:3484”]
SGTM [/quote]
Hope that you continue to contribute to our unique and fascinating DAO and this great forum and help us find solutions within the mission and constraints we are working. As Coingame already said there a lot of moving parts and we are not confident we have them all covered. The question is would that ever be possible. Unlikely I would say.

However the more investments and contributions from smart and/or wealthy people the more risks and issues can be addressed or mitigated. So I would like to hear your ideas you have with NuBits so we can strengthen our DAO even further.

Just make sure you fasten your seatbelts and you might feel a little queasy at times but we will get you somewhere

My adagium: No risk, no joy, no progress, no value!