Who controls Solidcoin's special millionaire accounts?

Solidcoin takes the following approach to preventing the 51% attack:

As with existing cryptocurrencies, SolidCoin 2.0 stores transactions in a "block chain" which is essentially what it sounds like. Transactions go into a block, nodes do work on that block to verify it, and if the work is good enough they can submit it to the rest of the network. SolidCoin 2.0 then comes into action, every other block in the chain must be worked on by someone with at least a million (1,000,000) SolidCoins in an account.

One initial problem with this p2p security feature is SolidCoin only had 1.112 million coins prior to this security feature being implemented. To solve this, 10 accounts of 1.2 million were created in the genesis block. These are special accounts that cannot be spent on the network, effectively making them "Null accounts used for special purposes", until SolidCoin does have real millionaires.

So, who controls these ten special purpose accounts? And are they supposed to be disbanded when real millionaires come around?

Thilo

Posted 2011-10-17T02:22:23.463

Reputation: 4 491

3As it is, I guess this site is the best resource for Solidcoin questions as well. Unless you want to rely on the FAQ on solidcoin.info, which has such gems as "Q: Will Solidcoin replace Bitcoin? A: Almost certainly". – Thilo – 2011-10-29T00:30:31.797

1But this implies that solidcoin is a legit currency when in fact it's controlled by one person. – tysat – 2011-10-31T18:27:31.130

1What better place to discuss these concerns and potentially warn people than here? – Thilo – 2011-11-01T03:34:15.087

Answers

RealSolid controls those accounts. He claims that he has selected several trusted people to operate them, but we have no way to know if this is true or not.

There also seems to be a somewhat fundamental flaw in the reasoning. If we trust people because they have the most to lose, why should we trust people who have unspendable coins? Unspendable coins don't reflect having anything to lose at all.

It should also be pointed out that those with more than a million coins have complete control over the transactions included in the chain and who gets all of the mining rewards. They have merely to announce blocks in pairs -- everyone who doesn't control a million coins can be completely locked out by those who do.

Also, I think "the poor can trust the rich because they have the most to lose" fails the giggle test. (That is, you can't say it with a straight face, so it's probably not even close to true.)

David Schwartz

Posted 2011-10-17T02:22:23.463

Reputation: 46 931

+1. Solid Coin "scheme" obviously provides no security so the question is how/why do it. Parsing words, and pices bits together it becomes clear that the "trusted nodes" and "even blocks" are merely a wealth transfer mechanism. They transfer 10% of all coins even mined directly to RealSolid personal account. A tax for the king if you will. – DeathAndTaxes – 2011-10-17T12:42:51.843

1One thing I would also add is that the 10 trusted nodes will be anonymous. The trusted nodes are currently controlled by RealSolid. In the "future" (ambigously defined) he states they will be controlled by 10 different people. 10 random people or 10 people who do what Real Solid says? Since Real Solid has copies of the private keys how can the trusted nodes ever be trusted do not be under Real Solid's control? If the 10 unique persons are annonymous how can it be verified that RealSolid didn't simply say he handed over control of the 10 nodes and instead retain control over all 10? – DeathAndTaxes – 2011-10-17T12:52:42.590

Although the idea of having 10 guardians sounds good in theory, in practice this is probably not the case, with it being one person controlling the 10 millionaire accounts. This person also has the ability to hold all solidcoin owners to ransom, as they can effectively shut down the network, unlike bitcoin, where anyone can mine, solidcoin is dependant on the millionaire accounts to mine every other block. If they shut down (which, being controlled by one person, they could easily), then the network shuts down, and everyone loses access to their bitcoins. In fact, with solidcoin, this has already happened once so far. It's a nice idea, and sometimes a nice idea is all that some people need to make an investment, whereas others (myself included) prefer to do a little risk assessment also. Those people, I suspect, don't own any solidcoins.

Rebroad

Posted 2011-10-17T02:22:23.463

Reputation: 251

-5

David Schwarz is partially correct. If the 10 trusted accounts are used in a "coordinated" manner then they can indeed control which transactions get put in. This is why 10 separate people will be chosen to operate them. It may be possible that one or two of them may at some point either be hacked or turn malicious, but for all 10 to go that way is highly unlikely.

A trusted node does not have to necessarily have to accept another trusted nodes solution, and we are adding functionality that a majority of trust can overcome such situations.

Another thing to remember is rewriting the chain is pretty much impossible with SolidCoin, so even if for some short term a trusted node turns malicious it only means they can favor certain block winners or control which transactions they accept. Your coins will still be valid and the network can carry on fine, so the biggest Bitcoin flaw has been overcome and people can place almost as much trust in the system as they can with other traditionally secure payment methods.

People who want a 100% decentralized solution, which has numerous known flaws, can choose Bitcoin, we recommend them to do so if they want that and don't mind running the security risk. SolidCoin with it's 5% economic centralization (CPF) and secure p2p cryptocurrency protocol is for people who desire security and coin growth. Up to each user to decide what they want.

Please read our FAQ if you have any more questions. http://solidcoin.info/faq.php

RealSolid

Posted 2011-10-17T02:22:23.463

Reputation: 9

1So, will the 10 accounts be phased out when real millionaires step forward? – Thilo – 2011-10-17T04:02:38.327

The 10 accounts are designed to phase out, so this is true. Once their money drops below 1 million the accounts are no longer valid, and can never be used again. If the community wants to support these trusted nodes (or the CPF realizes there aren't any real millionaires yet) then they can continue to function provided they are over 1 million. Some of the 10 trusted node people may be public figures to help coordinate that community support aspect. But over time the plan is for the "rich" people to have to pay to protect their investment, just like they do with their "real money" currently. – RealSolid – 2011-10-17T04:06:56.593

1"These are special accounts that cannot be spent on the network". How can their account balance drop then? – Thilo – 2011-10-17T04:08:29.650

Currently they cannot. I will be adding code that allows them to "defrag" payments to themselves into their one transaction again. So basically provided the input and output is only their address they will be able to perform a transaction. Hope this makes sense. – RealSolid – 2011-10-17T04:10:21.267

1Sorry I misread your question. To write a trusted block onto the network a special transaction is required, this transaction requires them to lose 5% of the last blocks generated value. So everytime a node writes a trusted block they lose a little money, about 2SC currently. – RealSolid – 2011-10-17T04:12:13.730

1@Thilo. The special accounts can't be spent on the network but every block they transfer ~1.6SC to RealSolid personal wallet (where they can be spent). This is on top of another ~1.6SC tax minted out of thin air. Essentially the trusted nodes exist to pay RealSolid 3.2SC every even block roughly 1.12M SC per year. – DeathAndTaxes – 2011-10-17T12:46:41.383

What is to stop an attacker from simply buying a trusted node? 1M SC are worth ~$20K today. It would be far cheaper to simply buy enough coins to gain 51% of trusted nodes than it would be to buy the hardware necessary to control 51% of bitcoins hashing power. – DeathAndTaxes – 2011-10-17T13:17:15.470

3Since RealSolid has all ten keys and will be adding code to allow him to move coins amongst the trusted accounts, it sounds like there is no actual distribution of trust. RealSolid could drain the accounts of anyone who didn't do what he wanted. Also, you don't need to compromise all accounts. You just need at least one of them plus 51% of the hashing power the other nine account holders have. I'm not sure which is scarier, the trusted people holding lots of hashing power as well or them not holding much. – David Schwartz – 2011-10-17T17:09:26.500

1@DavidSchwartz +1. Also now that RealSolid has now by royal decree altered block reward from 32 to 5 this ensures nobody else will have a trust node for many years. The worst part is this change is unavoidable. Since he controls the trust nodes they will simply invalidate any block which doesn't comply to his current changes. Not just thing change but any future change. The trust nodes could even invalidate blocks that contain transactions he has blacklisted. The nodes provide complete and irrevocable control over the current protocol and future protocol changes. – DeathAndTaxes – 2011-11-01T14:33:41.683