Why I nixed p2p, colored coins and all that jazz

Monday, 21 January, Year 5 d.Tr. | Author: Mircea Popescu

Since this point is finally starting to be actually discussedi, I suppose it's time to release this as a PSA. I guess it is a little weird to do things this way, these observations would have been... not exactly useful, but moreover of paramount importance to the "teams" of coders "working" on this stuff, many months ago (last Autumn, for instance, or at any rate before me actually nixing it). They didn't have the sense to obtain them then, which does not at all speak in favour of their presumed intelligence.

Problem 0. First, to get some nonsense out of the way. A system of colored coins, a p2pexchange or somesuch does not necessarily constitute competition for MPEx.

It's not the case that I'm stuck in the present model, threatened by anything and everything coming along. It's the case that I sit comfortably at the top of the chain. If I believe at any point there is value or use in them I can just... take... them. If experience is any guide, I shall take them the next dayii. Either, both, something similar. Further along those lines, MPEx makes plenty each month, certainly enough to afford it development of anything it wishes developed. To spec, by a competent teamiii if need be.

So, if I say no it's not because of any other reason than simply the obvious : I do not believe them to be either useful or practical.iv Which allows us to move on to a discussion of that, which I hope will be instructive.

Problem 1 : Go tell the average finance person that any security trade on either side will have to be held an unspecified interval, of no less than five or so minutes and possibly as lengthy as an hour or more. No, seriously, go do this, see what they have to say. A, you know absolutely nobody who trades securities ? And you're writing the end-all, be-all securities trading system ? Why am I not surprised in the least ?

This is inherent in any block chain sort of solution, and it is in and of itself sufficient to nix the deal. We simply can't have this, it does not work, it's not possible to do. I have subsecond (mostly) delays baked in MPEX against order cancelling, to handle the HFT problemv. These delays are a problem to people. Three minutes to settle a trade as a best case scenario ? Heads explode.

Moreover, the sorts of problems the blockchain is intended to solve (double spends, mostly) are not a serious problem in the case of securities. In fact, people double spend securities all the time, it is called short selling. No big deal.

Problem 2 : There have been a total of 38`765 actual transactions reported by MPEx so farvi, but these crosses come out of about one million actual orders, expirations, cancellations etc. There have been a total of ~8.5 million transactions reported by Bitcoin so farvii (which overstates the number of actual transactions by at least a factor of 2, seeing how any movement of any BTC works as two movements of some BTC to two addresses). S.DICEviii produces about a quarter of these, or roughly one million real transactions (each transaction with S.DICE implies four actual blockchain BTC movements, 2 for the betting, 2 for the paying).

Even supposing you can somehow implement this so only crosses, not all transactions end up in the blockchainix, the problem of "what do we do in five years" looms. Considering the outright imbecillic things some of the outright incompetent members of bitcoin's "devteam"x have been saying about S.DICE "attacking the blockchain", it would be probably understandable why nobody sane wants to hitch his cart to their star any more than absolutely necessary.

Problem 3 : A person currently interested in owning some Bitcoin will either fire up a web wallet and receive some Bitcoins from a friend/counterparty, or will open MtGox and buy some bitcoins. Conspicuously absent from this either-or list is the downloading, over many days, through an inefficient process, of many Gigabytes of "blockchain".

A person currently interested in owning some Bitcoin securities will, on top of the foregoing, send one email with their pubkey and make as many deposits as they wish, directly from the webwallet or MtGox to MPEx. And then back. Conspicuously absent from this either-or list is, again, the downloading, over many days, through an inefficient process, of many Gigabytes of "blockchain".

This allignment will have to be maintained. I am not about to force intelligent people into doing stupid things, and spending a week to maybe, possibly, who knows, get the holy blockchain is about as stupid as it gets. Seriously.

Problem 4 : Permeating all the foregoing and sufficiently so to become a problem in its own right is the incredible arrogance of the recently liberated corporate slaveboisxi working as independent coders. Seriously, start working on the BTC securities trade system of the future without ever having worked for MPEx, without having humbly presented your inept ideas to the most grandiose master Mircea Popescu (ie, me), without anything like that ? O, why, because you're a special little trainflake of brilliance and genius who can ? Really ?

Reality doesn't work that way. Not because I give a shit either way, but because the foregoing paragraph raised your blood pressure to the degree that it did. A sore ego, meanwhile festered problems of social integration, difficulties with internalizing one's own place in the world make for very unstable individuals who then "cope with stress" in unstable ways. None of this contributes positively to credibility, and it is credibility alone upon which all of finance is built. Or in the immortal words of Morgan,

A man I do not trust could not get money from me on all the bonds in Christendom.

These are not the only reasons. There's a lot more to it, deep, intricate, complex problems of a nature most everyone is not intellectualy ready to represent, and consequently most everyone does not get to discuss (and whoever thinks that's "not fair" gets to suckle on the middle finger of the invisible hand).

These are nevertheless sufficient to - I hope - illuminate and inform. Otherwise, MPEx stands fully behind its policy openly stated last year but prepared much in advance, which is to say

21. What happens if your domain(s) or server(s) are confiscated ?
In case the domain is confiscated or otherwise lost MPEx will move to a different domain, in a different jurisdiction. Should the same happen again, MPEx would move to what will at the time be a solid alternative for a free Internet, be it the TOR network, namecoin or some equivalent DNS or any comparable solution. No government will ever be able to stop the Internet, in general. We're prepared to show this in the particular.

Should the systems be confiscated or otherwise lost the service will failover to different systems, possibly on bulletproof hosting if need be. If sufficient pressure is put on this side MPEx will be recoded as a p2p system.

  1. As a relevant quote we might use

    But what I do think is inevitable, if Bitcoin is successful, is that people will demand zero-trust, blockchain-style, incorruptible pseudonymous ledgers as the lowest stratum for ownership of all their financial assets, not just BTC.

    belonging to n8rwJeTt8TrrLKPa55eU (don't laugh, that's the man's name!). []

  2. By way of illustration of this concept, the one and only time MPEx was DDOSed the response was swift and withering. Read that to understand why it isn't really feasible to DDOS MPEx anymore, and to marvel at the brilliance of the technical solutions my sacks of money afford me. []
  3. This specifically means obedient and subservient, which is to say "that does what it is told to do when it is told to do it the way it is told to do it". You know... the way professional code is written, now as always. []
  4. It shouldn't come as a suprise that people will happily start coding solutions that don't work to problems that don't exist - this is what most tech start-ups do, after all, which is why most fail. It shouldn't come as a surprise that when told this, those very people will rather invent a flaw in the teller - they've already invented so very much, what's the cost to them for a little more ? []
  5. NYSE refuses to add as little as 50ms of minimum order life, because NYSE does not care about its market going away. []
  6. Since late February 2012. []
  7. Since 1st of January 2009. []
  8. Since late April 2012. []
  9. Really ? How ? []
  10. Bitcoin has no such thing. There's a throng of randomly chosen doods, some smart, some dumb, who aggitate themselves around the codebase primarily for historical reasons. It is out of the question they will manage to maintain their relevance, tenuous such as it currently is, and there's little doubt that the future includes competing clients sponsored by the larger miners. There's just no other way to protect Bitcoin from the unmitigatedly audacious arrogance of people who in the everyday world can't date. []
  11. To be perfectly fair, a good chunk is made out of them who were never accepted into corporate slavery in the first place, and usually for very good reasons they pretend to not comprehend. []
Category: Bitcoin
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18 Responses

  1. 荷兰网`s avatar
    Thursday, 5 March 2015


  2. Mircea Popescu`s avatar
    Mircea Popescu 
    Thursday, 5 March 2015


  3. 荷兰网`s avatar
    Friday, 6 March 2015


  1. [...] Popescu posted some very insightful criticisms of the peer-to-peer Bitcoin stock exchange concept, but studiously ignored the most obvious one: a decentralized MPEx would have no room for an owner, any more than the Bitcoin network itself does. [...]

  2. [...] that those projects are taken seriously when they haven’t resolved basic issues, regarding exchanges, storage, etc. The scamvelopers behind it are quick to profit from it, while they do not have to [...]

  3. [...] 分布式市场的案例说明:客观功能可以锚定规范性原则。上个月,我和老朋友Ümlauteer Jerry Brito, HoumanShadab发布了比特币金融产品和平台监管威胁的论文工作草案,论文名为“比特币金融监管:证券、衍生工具、预测市场、和赌博。”我们描述了企业家和金融精英们正在接纳比特币,用它进行高端金融活动。也描述了美国法规将如何监管或者“是否”能监管。 [...]

  4. [...] In its current incarnation MPEx is a centralised system. This is not happenstance, all markets are by their very nature centralised affairsiv and financial markets especially, as trust is the only required ingredient to their continued operation. Decentralisation will occur, if and only if the environment makes it impossible for MPEx to be operated as is, but it will probably not exactly take the form of a blockchain-based system for reasons already discussed. [...]

  5. [...] a troop of children pretending they're adults doing srs bzns started work the wrong way on solving problems too big for them to correctly represent. Predictably that went nowhere. A well, this is how children learn and grow, right ? By [...]

  6. [...] the author has skipped reading Why I nixed p2p, colored coins and all that jazz, specifically the part about retarded children : Problem 4 : Permeating all the foregoing and [...]

  7. [...] now bankrupt and you're fucked, well done! [↩]Seriously now dear & beloved neckbeards : learn to talk to your betters. Before you start coding. There's a reason they're your betters, and that reason is that they're [...]

  8. [...] it's because much in the manner of the failed-revived-failed again-revived again colored coins nonsense, the intellectual leader has reviewed the thing and judged - correctly! - they're [...]

  9. [...] Contrary to what Kaplin saysii, it's neither of those. It's simply this : some kid with nary a clue and the complete tableau of Kramer statsiii but a lot of self-confidence and a whole stack of manuals on how The Power of Affirmation works found out about Bitcoin, decided that Bitcoin is good (which is right) and that's all. That is all, a complete rehash of the vanity problemiv described earlier. [...]

  10. [...] moral of this story is, of course, that old problem #4 : Problem 4 : Permeating all the foregoing and sufficiently so to become a problem in its own [...]

  11. [...] except centered on rendering the public forum inoperable. Consider this footnote an extension of Why I nixed p2p, colored coins and all that jazz into "anonymous" and "trustless" bs. That the medium of exchange works well if it's "anonymous" and [...]

  12. [...] ya want ? ———Seriously, problem 4. [↩] Category: Meta psihoza Comments feed : RSS 2.0. Leave your own comment below, or [...]

  13. [...] a quantity of milk, is fundamentally what sinks capitalist regimes once they get divorced from the theological function of early leadership, and it's how you lost to China, and how you'll always lose to a correctly [...]

  14. [...] and such as the many countless other ambitious, iliterate children that came before him. It's in "Why I nixed p2p, colored coins and all that jazz", because yes there was an Ethereum before an iliterate, ambitious kid ripped off Ripple, and back [...]

  15. [...] [^]Apparently they're chain agnostic so they also welcome people who identify with "Crypto", "DeFi" and I'm not keeping up with all the new marketing buzzwords these days, I'm sure there are more. [...]

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