[Cryptography] Ynt: Ynt: A new, more efficient consensus protocol

[Osman Kuzucu]

Gönderen: Vincent Strom <vincent.strom at protonmail.com>

If CBDC has a central design then it could expose the central node to hacking, or it could be operated unfairly etc. (If you are saying that such things can be avoided even with a centralized design, please elaborate.).
Assume that they adopt a BFT protocol, running 10 nodes. 8 of them are masternodes, agreeing on the next block by communicating with each other. And 2 of them are listener nodes that receive transactions from the users, forward to the 8 masternodes, and receive block/ledger information from the masternodes and relay them to the network.

By having such split, we can eliminate the synchronization issues between the masternodes simply because they would be in same network, or close distance because operated by one entity. On the other hand, receiving 2 listener nodes can also be in the same location, but can have many multiple peers that broadcast data globally. This methods allows having larger blocks + more transactions. The numbers could be adjusted to make it more secure (80 masternodes instead of 8 for example, but all run by the same entity -> CBDC)

The advantage of having a decentralized design is that the CB's operation can be completely secure and transparent if performed through a smart contract. As a user, one would enjoy all the same features of a cryptocurrency because no trust is involved. Perhaps one could be averse to the ideology but the benefits of traditional monetary policy (to achieve price stability) and of legal backing are hard to ignore.

Maybe I am thinking different, but I think decentralized asset idea and having an owner/controller are exact opposites. If a Central Bank is to issue a currency, as I said before, they would require a control over the assets. The circulation, when to issue new assets and how to adjust the interest rates and all. At the end, they are the ones who decide on the monetary policy. So, their solution somehow has to have a functionality like "issue X amount of coins, transfer to address Y, whenever I want". And when that happens, even though you can see it on the chain, you won't be knowing what is happening to it. You can only question to its status up to a point, where they will be making up legally valid excuses because they have the power. And then, there is no difference between using a centralized digital asset or a decentralized one.

I am not necessarily advocating the use of central bank currencies over crypto (or vice versa) but I am simply saying that here is a protocol that is capable of turning CBDC into crypto (modulo ideological issues). Moreover, I am saying that this protocol (now thought of as crypto) seems to perform well on many metrics e.g. cost (compare to PoW), security (compare to PoS), fairness and possibly scale.
Here again, I doubt a central bank would let citizen be in charge of an asset. Moreover, why would people be running mining nodes? Why would the CB pay them? Currently central banks don't pay any money to any individual directly. Why would a central bank think on paying people? My question is, what is the driving force for them? Are they planning on being open and fair, and having verifiable transactions? Or would they be planning on a decentralized money issuance solution where they don't issue any money directly anymore but people do? I think that is the question that should be asked first.

If no one on the network is an altruist then every user has to do this job for themselves and would require the hashrate comparable to transaction generation rate ~ 2K or more. This is still significantly less than what is required for mining. Moreover, the requirement is capped at this rate. The required hashrate  does not increase as more hashpower joins the network.
Assume that I have developed an asic that can do 1MH/s and on average a person's device can do 10H/s (imaginary numbers). Now if I start spamming the network with a million transactions per second, my asic device can calculate 1 million hashes. On the other hand, because an average person does 10H/s, they won't be able to calculate all the hashes in required time, and will fall behind, and perhaps won't be able to find a winning ticket in time. And because I have an asic and I can calculate all the hashes, I will be the only one that is finding valid tickets in given time, and registering blocks. Yes, there is a chance that someone else's machine finds the lucky ticket, but with more hash power, I am guaranteed to win more because I can include only others' transactions in the block + winning ticket, and I will not be paying anything for the transactions I submitted to the mempool.

The same logic goes for Bitcoin network too. If I had 90% of the network hashrate, I could flood the network with transactions with 1 BTC fee, and mine them myself. 1 in every 10 block, i would be losing money, but because I flooded the network, everyone else also would have to pay more fees, then I could mine only the other people's high fee transactions on my 9 blocks, and let other miners mine my transaction on one block. At the end I would be netting 8 blocks. (1 BTC per tx might be an overkill, but I think you get the idea).

In fact, I believe that is what's going on with the Ethereum and Bitcoin these days. People say it's adoption but I think it's couple pool owners coming together and flooding network. Call it a conspiration theory, but it's possible.
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