Kanakulator

Following energy-efficient sustainable Blockchain technology.
Watchlist:
$ETH $ICP

[Kanakulator @kanakulator]

@DeFiTracer @grok 25,000

[Kanakulator @kanakulator]

@chennai2london @AimBot_Ai @moonboteth Sad this happened to you @chennai2london. The address https://t.co/Tv54p38CJQ belongs to @kucoincom , so the whole of $8.1 million is not stolen amount. File a complaint with KuCoin with the transaction id.

[dom | icp @dominic_w]

#ICP security involves different thinking vs proof-of-stake networks, so direct comparisons are hard. Differences include:

1 "Deterministic decentralization" ⬆️ vs simple Nakamoto Coefficients
2 Games of life ⬆️ vs small-game fallacies
3 Hardware ⬆️ vs liquid stake

Big thanks to Justin Bons for his willingness to debate the ICP community on this subject – these days theoretical debate is sorely lacking – but he does not cover these differences in his analysis. He therefore provides a good opportunity for me to draw attention to the differences, and explain them to those interested:

/* Deterministic decentralization */

Decentralization, generally speaking, is a nebulous term that is difficult to measure – should we measure the decentralization of the Bitcoin network by the rather small number of mining pools that might double-spend by colluding, or by the much larger minimum number of individual miners that would need to collude, upon the assumption that miners would leave any pool involved in an attack? Or, should we measure the decentralization of Ethereum using the number of individual virtual validators nodes running in the cloud, or by the number of Big Tech clouds that control them? These are tough questions.

The Internet Computer uses a decentralization framework, which underpins the security of its protocols, known as "deterministic decentralization." This aims to calculate and create decentralization both with more certainty (more security) and also with less replication (more efficiency). It is more nuanced than basic "Nakamoto Coefficient" thinking.

The system is made possible because the network runs under the direct and exclusive control of an advanced permissionless DAO that is integrated into its protocols called the NNS, or "Network Nervous System," which currently has more than $3b of ICP staked and huge numbers of participants (it's the biggest DAO community around today).

The NNS adopts/rejects proposals that do many things, two of which are particularly relevant to decentralization: 1) it hands out "node provider" profiles to those who ask for them, and 2) scales the network by forming and configuring subnet blockchains by adding and removing node machine hardware operated by different node providers.

Node providers obtain profiles by submitting proposals that specify the data centers they will be installing node machines within, which information then gets associated with their profiles. Another type of proposal, which anyone can submit, forms new subnets from existing nodes, or adjust subnets by adding/removing nodes, with the requirement that "deterministic decentralization" is observed.

This involves combining node machines from 1) different node providers, 2) installed in different data centers, which are 3) in different geographies, and 4) different jurisdictions.

The purpose is to create subnets which would require a higher degree of node provider collusion to break, and which are also resilient to e.g. a nuclear bomb hitting data centers in a geography, or a government/regulatory area attack executed within a jurisdiction such as the EU. Some subnets also have special purposes, such as those hosting e.g. bitcoin, and have higher replication factors as needed – security is on a cost/benefit curve and tailored precisely to need.

It is important to compare this to traditional proof-of-stake practice, where validators are anonymous, and mostly run on Big Tech's cloud services. For example, the Hetzner cloud suddenly shutdown 40% of the Solana network, more than 1,000 of its validators, after deciding it didn't want them. By implication, it could also also have taken full control of the network. Further, consider that vast numbers of cloud validators on Ethereum are in practice sometimes created by one operator behind the scenes. Arguably, the cloud providers are the nodes, not the validators they host.

Deterministic decentralization does not depend on having huge numbers of anonymous validators running in the cloud, and I would argue provides more dependable decentralization that is also certainly much more efficient.

If required, the Internet Computer's network protocols allow for very large numbers of nodes to be combined into subnets. Where they are not, it is because analysis performed wrt deterministic decentralization indicates that it would be unnecessarily wasteful.

/* Games of life */

I don't always agree with Nick Szabo's thinking, but one of his pieces that I think is INCREDIBLY insightful and generally important for the crypto industry, and often overlooked, is his post titled "Small-game fallacies."

https://t.co/2sxsc4KLjy

Small-game fallacies often occur in proof-of-stake modeling, which assumes that validator behavior is determined exclusively by incentives existing within the narrowly defined constraints of crypto economic systems e.g. that anonymously deposited stake ("collateral") is the primary determinant of validator behavior, including cheating/not cheating. This is incorrect.

Szabo draws attention to the fact that human behavior occurs within the much larger "games of life." For example, most validators won't cheat, not because of fear of losing their stake, but for reasons of personal integrity, professional pride, and fear of retribution (both from others in their industry seeking revenge, and from legal systems that with to punish them for their crimes). These incentives can exert much greater forces than anonymously staked cryptocurrency.

The Internet Computer considers the larger games of life by ensuring, among other things, that node providers (which are typically companies) identify themselves. Those colluding to defraud the network will be subject to much more than the loss of their stake. Indeed, they can be subject to the full force of the law around the world.

As the assets hosted by networks become increasingly valuable, it becomes harder and harder for proof-of-stake advocates to claim that they are sufficiently protected by validator stake. The larger games of life are required.

/* Hardware stake */

The Internet Computer runs on sovereign hardware called "node machines," which are built/purchased by independent "node providers" who install/run them from independent data centers around the world. In the "proof-of" terminology, it is "proof-of-useful-work" (PoUW).

This hardware-based approach is diametrically opposed to proof-of-stake, which typically sees validators running on Big Tech's cloud services, run by anonymous operators, who have joined them to the network staking some amount of cryptocurrency.

As per the preceding section, the thousands of validators running on Amazon Web Services should really be seen as one node, for reasons highlighted by the Hetzner incident, but that's beside the point – what we need to compare here is the *types* of stake involved in proof-of-stake vs Internet Computer nodes.

An ICP node is not joined to the network by staking ICP tokens, but rather by merit of being standardized hardware that can keep up with the nodes it is combined with (and thus not get expelled). This standardized hardware is expensive. It costs $20k+ per node machine (and those wishing to support optimized AI smart contracts will likely find the specs for those nodes will probably exceed $100k).

This hardware is of course a form of stake that the node providers put at risk, and it is not one that is not liquid. The cost fully includes both the cost of acquiring and installing the hardware, and the hosting contracts with data centers. If a node provider is kicked off the network for cheating, or running substandard hardware that can't keep up with the block rate, in practice they will have problems reselling their accumulated hardware, will be unable to recoup setup costs, and will often be stuck with contracts for co-location and bandwidth.

By contrast, a proof-of-stake validator node on Amazon can be spun up and down on a button click. Nothing is staked apart from the cryptocurrency. However, that can be hypothecated using liquid staking – in short, what is actually staked is a much more wooly subject.

While, as explained in the previous section, we believe that the larger games of life trump the small game fallacies of narrowly defined proof-of-stake crypto economic systems – not just in theory but technical practice – we also believe that it's often hard to determine what is actually staked when the stake is cryptocurrency.

We would argue, as with many things in crypto theory, that the truth is far more nuanced that the big brassy theory boilerplates justifying the design of major proof-of-stake networks would suggest.

In summary – the stability of hardware stake, and the forces created by the larger games of life unleashed via intelligent decentralized governance that carefully combines hardware operated by identifiable node providers in a scheme of deterministic decentralization, allows decentralization to be measured and tuned more accurately with far greater predictability, and therefore safety.

[Internet Computer Today @DfinityToday]

Web 2 → Web 3 @dfinity #InternetComputer

[Justin Bons @Justin_Bons]

1/25) I do not support SOL, far too many red flags

A blockchain with downtime is unacceptable

ETH & BTC never go down

SOL is suffering from the consequences of their own design decisions

There are many examples of lies, fraud & bad design

I will cover several in this thread:

[10-K Diver @10kdiver]

5/

In addition to Revenues, Costs, and Profits, Income Statements also contain a few other quantities of interest to investors.

Typically, these are: Gross Profits, Gross Margin, EBITDA, Operating Profits, Operating Margin, Earnings Per Share, etc.

Here's a typical breakdown:

[Kanakulator @kanakulator]

This tracesback to Nov 2021 when Sky Mavis requested help from the Axie DAO to distribute free transactions due to immense userload. Axie DAO allowlisted Sky Mavis to sign various transactions on its behalf. This was discontinued in Dec 2021, but allowlist access was not revoked

[Ronin @Ronin_Network]

There has been a security breach on the Ronin Network.

https://t.co/ktAp9w5qpP

[DFINITY Foundation @dfinity]

Looking for a weekend read? 👓

DFINITY published a new white paper called "The Internet Computer for Geeks."
https://t.co/xwsgaNyCPM

[vitalik.eth @VitalikButerin]

Happy new year!

Today, a mini-tweetstorm of some of the things I've said and written over the past decade, and what I think about those subjects today.

[Joachim Breitner @nomeata]

Are you writing #internetcomputer canisters in #motoko (or in Rust) for real? Here are a few things to watch out for: https://t.co/IRVFm5pMMd

[dom | icp @dominic_w]

1 yr ago, nobody would believe a chat service could be built entirely using smart contracts and run from a blockchain

Yet @OpenChat is hardly mentioned..

While crypto press obsesses about technically trivial advances like NFTs

Are there any real journalists left in crypto?

🤔

[Kanakulator @kanakulator]

@Kevin__Lovelace @etrot @CoinbasePro With Coti bridge https://t.co/ymOz2VtEB8 native coin can be swapped for ERC20 token.

[Brian Feroldi @BrianFeroldi]

I own 7 stocks that are 15+ baggers (and counting)

Here are 10 traits they all have in common:

[Kanakulator @kanakulator]

@AltcoinPsycho The major exchanges listing the coin should demand disclosure. The projects should include the VC locking periods in their tokenomics.

[Kanakulator @kanakulator]

The Miami #Bitcoin event looks like any other bankers conference after party. While countering Musk Melon, a section of the community has lost focus on founding principles. Time to correct course and be inspired by real leaders.
https://t.co/XgANiqR8XS

[jack @jack]

Square is considering making a hardware wallet for #bitcoin. If we do it, we would build it entirely in the open, from software to hardware design, and in collaboration with the community. We want to kick off this thinking the right way: by sharing some of our guiding principles.

[Grayscale @Grayscale]

Interested in learning more about #crypto regulation? Read @CraigSalm's thoughts in @BusinessInsider for more https://t.co/PqGwQozky8

[10-K Diver @10kdiver]

1/

Get a cup of coffee.

In this thread, I'll walk you through one of Charlie Munger's greatest insights:

In the long term, the return an investor gets from a business will roughly equal the return the business itself earns on its capital.

[Kanakulator @kanakulator]

@ConnextNetwork @FTMAlerts Saved enough gas with https://t.co/hKOGFGrw13 to buy tens of $ADA
https://t.co/JqJ7lghChh

[Kanakulator @kanakulator]

How to buy $ERN on @QuickswapDEX at very low gas?
Move USDT (BEP20) > USDT (Matic) using xpollinate.
Then trade this @EthernityChain pair wMatic-ERN
https://t.co/IJ3jDUGTNz
#ethernity #Polygon

[Neeraj K. Agrawal @NeerajKA]

headline crime vs informative headline