Shinobi’s Strawman is a weekly sequence the place our Technical Editor Shinobi challenges the Bitcoin group, aiming to fire up dialog round heated technical debates.
_________________________________________________________________
Right here is an element two of the experiment. Final week I printed a brief immediate difficult readers to reply with their very own protection or criticism of drivechains. The aim of this was to instigate challenges to my very own criticisms, questions, and even new criticisms I’ve not considered or thought-about. Written type content material is usually extra thorough and simpler to digest than real-time communication, as each events have time to take a seat and assume earlier than formulating a response versus needing to take action instantly. I believe this may help to alter the tone of conversations round contentious subjects by attempting to facilitate them on this format.
In order that stated, time to undergo the responses to final week’s immediate.
Paul Sztorc
Paul Sztorc responded in lengthy type on Twitter, the whole thing of which may be discovered right here. For formatting readability in quote snippets, daring textual content is denoting which of my statements Paul is responding to.
> 1) Drivechains introduce a hodgepodge of latest variables into miners’ incentives … Drivechain is similar to RIOT’s use of “energy curtailment credit”. https://riotplatforms.com/bitcoin-mining It’s only a new means for miners to generate income. Once I’m requested: “does drivechain have an effect on miner incentives?” I say “no”. I personally lived by the invention of: FPGAs/ASICs, heat-reuse, stranded natgas flaring, curtailment credit, and a complete lot else. Merged mining was invented by Satoshi in 2010, and is already in steady use — https://truthcoin.information/weblog/security-budget-ii-mm/#c-its-too-late–mm-is-already-widespread . Identical with the withdrawals — miners do loads of good issues, corresponding to MASF activate tender forks or maintain peoples mistaken charge cash ( https://x.com/satofishi/standing/1701042302238724512?s=20 ), or rent Bitcoiners to shill Bitcoin. So, to somebody like me, getting revenues from merged mining, or overseeing 4 fully-automated withdrawals per sidechain per yr, would not even register as a change. It is simply enterprise as typical.
Paul claims that energy curtailment agreements are equal to the centralizing pressures of drivechains. It is a damaged comparability for a couple of causes, first of which is the wild distinction by way of scale. One thing like working infrastructure for drivechains, or the proportional benefit of pool measurement in doing so, runs on economies of scale. The bigger an operation participating in such a habits is the extra of a worldwide benefit it provides them. Energy curtailment however would not, it has diseconomies of scale. One mining operation participating in energy curtailment on Texas’s grid has no affect in any respect on miners linked to a different grid having the ability to interact in comparable agreements. Mix this with mining actively getting used to increase renewable power manufacturing, which creates the necessity for these curtailment agreements, and the complete dynamic over time is assured to decentralize and grow to be increasingly open to different miners. Additionally, the declare that miners being put in absolute management of custodying different folks’s funds and determine which withdrawals to course of (in some way with out figuring out the present balances of respectable customers) isn’t any change of their function is simply patently false.
> 2) Present Sidechains Have No Adoption Wait!? I believed sidechains had been going to alter miner incentives?? Not if they’ve “no adoption”. 😉 Anyway… RSK/Liquid are federated, and the federated mannequin is horrible. “federation vs PoW”, is actually the one distinction between Bitcoin (a hit) and its failed predecessors. We will equally anticipate BIP300 to outcompete Federated. Moreover, they don’t seem to be even in the identical league. Liquid doesn’t present us a web site (for instance) the place we are able to paste in (for instance) the zCash Altcoin supply code, and get out of {that a} zCash federated sidechain. As an alternative we’re caught with only one piece of closed supply junk that we can’t modify. That misses the complete level of sidechains. Evaluating RSK/Liquid to Bip300 is evaluating two handwritten books to the printing press. Liquid was fully closed supply till very lately; nobody is aware of who the federation members are (regardless of the mannequin relying solely on their status); the entire Liquid txn charges go solely to the company that created it. For some time (and nonetheless to today, for my part), Blockstream engineers may abscond with the funds if they really put 5 man-hours into it (see https://x.com/_prestwich/standing/1277089486111817728?s=20 ). RSK aspires to be a drivechain — so I’ve their vote, at the least. They agree with me that they need to be a drivechain, not federated. Lastly, the truth that now we have didn’t construct issues that the end-user enjoys? That ought to solely spur us onward, to invent new issues. Not quit quicker.
I do not know what to say right here…primarily each declare right here is fake. Liquid/Parts the platform has at all times been solely open supply and attainable to change, solely the code the federation members run to signal blocks and withdrawals was closed, however that’s now open supply. Paul pretending and attempting to indicate the complete challenge was closed supply is just not true. As nicely, the declare that “5 man hours” may steal the entire funds is solely false. The incident that he’s referring to was a bug (that has been patched) within the federation member code. All Liquid cash have a timelocked restoration path utilizing a 2-of-3 keyset within the occasion of catastrophic key loss by federation members that may end in all funds being misplaced. To ensure that these keys for use, the Federation should fail and stop transferring these UTXOs. That’s not “5 man hours” of labor as Paul claims, it’s attacking a globally distributed set of HSMs which can be extremely strong to distant assaults and nearly actually require bodily entry to compromise.
> 3) Drivechains Exacerbate The Dangers Of MEV > MEV is one thing that’s attainable on Bitcoin already … however … Drivechains open the door to arbitrarily complicated types of MEV on sidechains, MEV = “miner facet hustle”. In different phrases, if I supply Foundry $20 to shine my sneakers, then that’s MEV. If Slush Pool sells t-shirts on the facet, then that’s MEV ( spoiler alert they already do: https://store.braiins.com/merchandise/braiins-polo-shirt ). Miner’s major hustle is ordering transactions and blocks — the rest they do, is a facet hustle. Clearly we do not need the 2 hustles to battle! I addressed such “cross chain MEV” way back, in 2016, lengthy earlier than anybody had ever heard of shinobi (or MEV) ( https://youtube.com/watch?v=2OOKgTSrITs&record=PLw8-6ARlyVciMH79ZyLOpImsMug3LgNc4&index=2 ). I designed Drivechain to have one thing referred to as “categorical management”, to *defeat* cross chain MEV …not like for instance Blockstream’s simplicity which I consider may exacerbate it (see Half 5 / code obfuscation ; or see http://truthcoin.information/weblog/contracts-oracles-sidechains/ http://truthcoin.information/weblog/drivechain-op-code/ http://truthcoin.information/weblog/wise-contracts/ for extra). In truth although: MEV is a distraction. Might a sensible contract pay miners to reorg, or censor txns?? Sure. However a human, may additionally bribe a miner to do these issues. In the end it comes all the way down to: $ from txn charges, vs $ the attacker pays. Greatest means to assist miners is to ensure they’re wealthy — gathering a number of $ from the “major hustle”. Ie a number of merged mining.
I do not know what else to say besides that Paul continues to make absurd and excessive arguments right here. Promoting t-shirts requires new gear, new companies, new investments, whereas reusing your mining {hardware} would not. A miner choosing up a penny on the bottom doesn’t have any related affect to miner revenue or incentives, whereas somebody providing miners $10,000 every week to reuse their hashrate for a brand new goal does. Evaluating the 2 is absurd.
These are in reference to my reply https://twitter.com/Truthcoin/standing/1699093434026406322 to his earlier article. I stand by every little thing in that reply! > …these simply shove the liquidity necessities onto yet one more celebration, assuming they are going to present large quantities of liquidity for nearly nothing in return Each halves of this are flawed. First, on the L1 facet of the commerce, nothing is locked up — EVERY coin on L1, is already “offering liquidity” (on this context). Second, they actually do not get nothing! They cost a charge. The mannequin could be: “shopping for 1 sidechain coin, for 0.99 L1 cash” (for instance). > don’t assume it is a foregone conclusion that sufficient liquidity to cowl the “resolution to the safety price range downside”
I believe Paul right here is oversimplifying what’s going on, and ignoring the dynamics of arbitrage, which is what is going on right here. Sure, in an excellent situation, all mainchain cash can be found to swap for sidechains, however in actuality that isn’t the case. That assumes everybody thinks drivechains are equivalently safe to the mainchain. In actuality, there’s a safety and threat distinction, and folks participating on this arbitrage are bearing that threat on behalf of individuals they swap with. Most Bitcoiners usually are not taking their bitcoin and arbitrage buying and selling for yield with it, they only maintain it. That will not magically change due to drivechains, and finally the folks doing this arbitrage have to get the cash they’ve swapped into drivechains again out to the mainchain to shut the arbitrage loop. This merely shifts that bottleneck instantly from sidechain block constructors to arbitrage merchants. Additionally on the finish of the day, this provides one other reduce another person is taking from the charge sharing, and is a…
