Peer-to-Peer Asset Issuance and Transactions with Confidence Chains
BlueMeanie
Hi All,
Just following up on some of my earlier claims. Comments and valid criticisms are welcome.
-bm
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Abstract:
Bitcoin's popularity has grown exponentially in recent years as a new form of digital
money that transcends geography and national governments. This paper describes a
system for 1) Asset Issuance meaning the creation of digital property 2) and Asset
Transactions meaning the exchange and trade of that property. Many of it's internal
structures are derived from Bitcoin technology, thus many innovations in the Bitcoin
world carry over to this platform. It is truly Peer-To-Peer, meaning there is no central
server required. A very high level of transaction integrity and security can be achieved.
It has several advantages over Bitcoin, namely speed of transactions and no need for
'mining'. The system is suitable for a wide range of applications, it is powerful enough
to do high volume securities trading, secure enough to trade precious metals, and simple
enough for Community Currency implementations. In this paper we will describe the
core algorithm of Confidence Chains, in other proposals we will offer more details
regarding asset issuance and related features.
Yoni Johnathan Assia
Great Article.
One main comment is that you suggested similiar level of anonymity with confidence blocks, and I would like to suggest that :
1. Since confidence blocks rely on identity weight, than to impact a network people need to trust high weight nodes, this meams they are not as anonymous as in bitcoin.
2. By removing the anonymous requirement from the network, and creating incentive to build weight as an identity, trust is genereted through the historical reputation of a node.
I think that identity is key is establishing trust, which is the main requiredment from distributed asset issuance.
Should there be an algorithm for a node to define who are his trusted parties ? Like in ripple, I assume people will transact with issuers they trust or assets that are trusted by their confidence graph.
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BlueMeanie
On Wednesday, May 15, 2013 10:23:24 AM UTC-4, Yoni Johnathan Assia wrote:
Great Article.
thanks Yoni,
One main comment is that you suggested similiar level of anonymity with confidence blocks, and I would like to suggest that :
1. Since confidence blocks rely on identity weight, than to impact a network people need to trust high weight nodes, this meams they are not as anonymous as in bitcoin.
2. By removing the anonymous requirement from the network, and creating incentive to build weight as an identity, trust is genereted through the historical reputation of a node.
There is an implicit distinction between nodes that declare transactions and nodes that can validate transactions(form blocks) [1]. It depends entirely on the application. The system offers a flexible way to define the authority arrangement. So I can issue transactions anonymously so long as there is a identified node that is willing to approve it, and such a scenario would likely be very common. You could for instance trade a Digital Gold Currency anonymously and peer-to-peer using this system. Also interestingly, anonymity can be chained as in one node may know the identity of another, but not all nodes know who each other are- this feature can also be used in very powerful ways.
I think that identity is key is establishing trust, which is the main requiredment from distributed asset issuance.
Bitcoin does rely on identity: you identify yourself by showing that "I have a computer". So in that sense this system has the same general requirements as Bitcoin.
from the Satoshi whitepaper:
If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote.
so in Confidence Chains we do away with this sort of identity proof and leave it up to the currency designer.
Should there be an algorithm for a node to define who are his trusted parties ?
This is the Identity Weight and I do mention this issue "Even more complex and innovative techniques could be used to derive identity weight, such as membership in a social network, possession of a digital asset in the system, or any other imaginable criteria." You could design some very interesting applications with a creative identity weight function.
Like in ripple, I assume people will transact with issuers they trust or assets that are trusted by their confidence graph.
It does have some usage patterns in common with Ripple. It has many advantages over Ripple, one of them being structural similarity to Bitcoin.
thanks for your comments,
-bm
[1] this distinction is defined by the identity weight. A node with low identity weight can form blocks, but they are not likely to be accepted by the community of nodes. There are really many possible operations patterns in the system.