
Show HN: New Foundations for Permissionless Byzantine Consensus [pdf] - ClintEhrlich
https://www.dropbox.com/s/80cpk4ss5ossd4u/KRNC%20Technical%20Paper%201.0.pdf
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russdpale
This looks fantastic, I can't wait to read this all the way through. It seems
to solve a supreme fundamental issue of removing competition from the
proofing.

> I want to use the money for effective altruism and existential-risk
> reduction.

Since the absolute most fundamental nature of any organization is risk
reduction, I believe you mean the underpinnings of what the poli sci world is
calling the 'network state' :)

However, with that said, to me the most promising goal of crypto will forever
be the exchanging of computations for social mobility, ie PoW, PoS, PoST, etc.
There needs to be some way to actually earn semi-passive income. Why work when
a mining rig can do it for you? Banking the unbanked is cool or whatever, but
unbossing the bossed is where the ultimate potential for humanity is at, imho.
How does this consensus mechanism help with that, if there is no staking or
mining?

Thanks again, I can't wait to read it!

~~~
ClintEhrlich
Thanks for the kind words.

In a sense, it's an alternate form of Proof-of-Stake. As Section 8.4 explains,
the conventional wisdom is that Proof-of-Stake's flaw is that it's circular.
We've proved that actually it's not circular enough, i.e., the stakes it
assigns are different than the stakes in society's existing monetary game.

Proof-of-Balance allows "stakes" (what we call "weight") to be issued in
proportion to monetary balances. Once those stakes are in users' hands, the
protocol can run using the algorithms designed for PoS, including all of their
reward and governance mechanisms.

It turns out that to fully unleash the power of those algorithms, you need a
verifiably secure stake-distribution mechanism. That's what we've invented.
(It's harder than it sounds, of course...)

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dfischer
This is really awesome, I'm going to keep digesting this but hope to get more
people to read this for debate. Thanks.

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ClintEhrlich
Hi HN,

Lead author here. The mods have graciously given me permission to announce
some computer science work as a Show HN. It concerns permissionless Byzantine
consensus – the notoriously difficult problem of how to securely replicate a
state machine in the absence of a reliable identity system, which is the
underpinning of Bitcoin and other decentralized ledgers.

By copying the signaling techniques used by animals, my co-author and I have
achieved a 40,000x improvement in security and performance over the prior
state of the art. This vindicates a prediction made 10 years ago by a Chinese
researcher, one of the world's rare dual-PhDs in biology and computer science,
who believed that reverse-engineering animal-communication networks could
produce a consensus-protocol breakthrough similar to the invention of public-
key cryptography.

The parallel between asymmetric encryption and our discovery goes beyond the
scale of the advancement. It actually concerns the mechanism that our protocol
uses to protect itself from pseudo-spoofing or "Sybil" attacks, in which an
entity uses sockpuppets to hijack consensus by casting extra votes. Existing
technologies, like Proof-of-Work and Proof-of-Stake, are _symmetric_ in the
sense that they require correct agents to "outbid" the adversary by verifiably
expending more money or computing power. If the adversary's budget for an
attack is greater than the security budget of honest protocol participants,
then the entire system collapses.

Our paper introduces the first _asymmetric_ system, Proof-of-Balance. It
guarantees that honest protocol participants will remain in control of the
consensus protocol, even if their security budget is many times smaller than
the adversary's budget for an attack. This verifiable asymmetry yields not
only an exponential improvement in security, but also a corollary increase in
performance: because the adversary's maximum fraction of total voting power is
tightly constrained, transactions can be processed on the open internet using
speeds that were previously possible only on permissioned networks.

Asymmetry is nothing new in access control – e.g., a lock increases the
security of a house by more than its purchase price, so homeowners aren't
forced to "outbid" burglars to keep their families safe. However, it has been
ignored in resource-weighted consensus, because the field has been guided by
the "handicap principle" – which claims that the reliability of a signal
depends on its verifiable cost to the signaler. Bitcoin enthusiasts often
expressly invoke this principle to justify the waste inherent in Proof-of-
Work, claiming that it is a universal law of nature, which applies with equal
force to biology and computer science.

Not so. That is close to what biologists believed in the 1990s, when formal
game-theoretic modeling first substantiated the concept of handicap-
authenticated signaling. However, subsequent work revealed that it is actually
the verifiable cost of _faking_ a signal that determines whether information
can be transmitted reliably. If the cost for a dishonest entity to spoof a
signal is sufficiently high, then honest agents can transmit reliable signals
at zero cost. This is known as cue-authenticated signaling, and it is the key
to our protocol, KRNC ("Key Retroactivity Network Consensus").

An intuitive example of the difference between handicap-authenticated
signaling and cue-authenticated signaling is how male peacocks and tigers
signal their fitness to potential mates. Male peacocks waste resources growing
oversized tails, a handicap that proves their fitness based on the amount of
self-inflicted punishment they can endure. Male tigers compete with one
another to grow as large as possible to gain an edge in lethality, and their
size happens to have the added bonus of providing a cue of their fitness.

We adapt the "cue principle" to obtain a novel solution to Goodhart's Law, the
adage that a measure ceases to be accurate once it becomes a target. Our
rejoinder: if whatever you measure will become a target, measure the thing
that is already a target. (The math confirms this.)

For human agents, the universal economic target is money, so that is what
Proof-of-Balance uses to assign weights in a consensus protocol. Specifically,
it uses mean bank-account balances during a specified window of time in the
past – analogous to a "hard fork" of the data in the commercial banking system
onto a new cryptographic protocol. Everyone with online banking can unlock
their pro rata share of voting power for free. No buying stake, no wasting
computing power.

The other major upside to this approach is that it eliminates the need to
introduce a new currency, like Bitcoin. Instead, cryptographic weight
functions in a similar way to a "symmetallic standard," in which the base
money is a meta-resource derived from gold and silver in a specified ratio. In
KRNC, base money is a combination of an original fiat unit of account like a
U.S. Dollar, plus the corresponding quantity of cryptographic "weight" needed
to "back" that dollar.

The difference from the gold standard is that the "backing" isn't entrusted to
a Central Bank, which can renege on its word. It's held by the actual users of
the money, who transfer both the original dollar and its backing to one
another in each transaction. This provides inflation-protection like Bitcoin,
but it's added to the world's existing money. No pyramid-scheme like
distribution, no risk of technological disruption destroying innocent people's
savings.

Formalizing the discoveries in this paper has been, by far, the hardest thing
I've ever done. I'm nervous but excited to share the results with the world. I
believe they can be used, not just to build faster distributed ledgers, but to
protect humanity from the risk of a global monetary crisis. If anyone would
like to get in touch, I'll be around to answer questions in the comments, and
my email is footnoted on the first page of the paper.

p.s. I'm patenting the technology as part of getting the protocol off the
ground, but it's not my goal to be the next Mark Zuckerburg or Larry Ellison.
I got involved in this because I freed an innocent man from prison and wanted
to see how much more good I could do in the world. If KRNC succeeds on the
scale I think it could, I want to use the money for effective altruism and
existential-risk reduction. It's the right thing to do.

~~~
scottlocklin
Can your mods give you permission to stick it on a website that doesn't want
to vacuum up all my gmail contacts?

~~~
ClintEhrlich
Sorry about that, here's a dropbox link:
[https://www.dropbox.com/s/80cpk4ss5ossd4u/KRNC%20Technical%2...](https://www.dropbox.com/s/80cpk4ss5ossd4u/KRNC%20Technical%20Paper%201.0.pdf)

~~~
dang
Ok, we've changed to that from
[https://www.academia.edu/40335340/KRNC_New_Foundations_for_P...](https://www.academia.edu/40335340/KRNC_New_Foundations_for_Permissionless_Byzantine_Consensus_and_Global_Monetary_Stability)

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vasa_develop
I found GOLD.

