Some in-depth questions

Hi,

I first ran into incognito when @andrey stopped by a booth I was running with one of your nodes at the coinmarketcap conference in Singapore. I’ve always had a huge soft spot for hardware, since it makes all the software tangible. We had a great conversation. Incognito struck me as the most unique project I’d heard of at that event.

I’ve been kinda-following since then, but took a more renewed interest after running into @jason at cryptoecon2020 in Hanoi.

Since then I’ve quizzed Andrey and Jason about the software, made a wallet, shielded some Bitcoin, and bought some PRV. I even got awarded some PRV for my forum post, which I thought was really cool. Nice community-building touch that puts some small funds in the hands of users and ensures that they can get to know the software even without a direct spend.

So, yeah, I’m interested. Privacy tech is badly needed in our space. I’m sure I still have a ton to learn about this project, so I’m starting with all of the hardest questions I can think of. Please feel free to answer in hyperlink form, if these questions have been answered elsewhere on the forum.

1) Can you tell me the story of PRV (the token), from Genesis?

Who got what, for what, et cetera is what I’m looking for here.

  • Is this auditable?

Partial answer found here:

https://incognito.org/t/prv-holders/

2) Is the supply of PRV auditable?

3) Is there an entity behind the project?

For example, steem had stinc, cosmos had Tendermint, and Ethereum had the ethereum foundation.

  • If there is an entity, what portion of the token supply does it hold?

Partial answer found here:
https://incognito.org/t/prv-holders/

But I have seen mention of a foundation in the forum.

4) The fixed nodes:

  • Who runs them?
  • Are they geo-distributed?
  • What percentage of them can go down, and the network will still function?
  • What happens to the network and funds on it if they are taken down?
  • What do they do precisely?
  • In terms of risk, please compare the fixed nodes to the Iota coordinator.

5) I’ve linked my wallet to this forum account, and my real name, as well. Is it like…

  • Only the private key holder can view balances?
  • What can someone learn if they only have my address?

6) The Bitcoin trusted link currently in use:

  • Who am I trusting by using it? A company? A person? The node network?
  • How many machines have access to the relevant private keys?
  • Are the machines running this peg geo-distributed?
  • Could an adversary (privacy has many adversaries) seize or destroy all of the machines where these keys are kept? How difficult would that be?
  • How much longer will the trusted setup be used?

7) Sharting

One time I sharted badly and had to change my pants!

…so I am a little afraid of sharding technology. I worry that it adds unneeded complexity. I’ve been pretty vocal that I think the sharding effort at ethereum has been a big folly.

How vocal, you ask?

This vocal:

(Luckily, that’s not actually me in the photo!)

At the same time, I recognize that no current single-chain/monolithic design (POW and POS alike) can scale to the levels that will soon be needed to support cryptocurrency transactions.

  • Can you ease me into how your sharding implementation works?

  • Do shards have independent economies at all?

  • Is there a plan to support smart contracts, where a contract on shard A may need to fetch data stored on shard B?

  • Since there are currently 8 shards, can you explain to me their relative roles, or do they all do the same thing, and each shard just adds additional capacity to the network?

  • Can we do a real-world stress test right on mainnet by setting up a script or somesuch between some machines to fire PRV at one another at high speeds? This would do wonders to ease my concerns.

8) Inflation is currently running at 50%.

  • Is the plan to do something kind of like what monero did, with very high initial inflation and then much lower inflation over time?

Answered in detail here:
https://incognito.org/t/prv-holders/

  • Is the supply curve documented anywhere?
    Answered in detail here:

https://incognito.org/t/prv-holders/

9) Coinmarketcap/coingecko

I wasn’t able to get a read on prices anywhere other than the pDEX.

Is PRV on any kind of “price listing” site or is the only market the pdex?

Only market is the pdex. Found here:
https://incognito.org/t/prv-holders/

10) pDEX

  • Does the pdex live on the same infrastructure that runs the blockchain?
  • Why do I need to move funds from my wallet into the pDEX?
  • What’s the relationship between the chain and the pDEX?
  • Is the pdex something that runs on the incognito chain?

11) what does this mean?
Screenshot_20200402-234557

12) What does it mean to become a liquidity provider?

13) Taint

Tainted coins could enter the system. I should say that I don’t personally subscribe to the “tainted coin” theory-- Bitcoin, the protocol has no concept of taint whatsoever. To Bitcoin, they’re all just bitcoins.

Sadly, we live in a world where tainted coins are aggressively tracked, and even refused service at some exchanges.

  • Is doing a coinjoin on the way in or on the way out a possible solution to the taint issue? Is that way too complex to implement?

14) How did @Jong’s BTC get lost?
Receiving coins from external wallet anonymously

  • How can we have a system where BTC get lost, ever?

  • The private key to that wallet was actually destroyed or…?

This doesn’t seem reliable or scalable. System should be built around the reality that bitcoiners pay low fees and don’t mind waiting many blocks.

Thank you very much for your answers to these hard questions, and being such a wonderfully welcoming community.

Cheers!
-Jacob

PS: I plan to set up a vnode tomorrow. Let’s dance!

14 Likes
  1. You could read about this in the PRV holders topic.

  2. We are working on it, several things are still required before listing.

  3. Its a bug appeared a few hours ago. Never encountered it before.

  4. You can “lock” both sides of a pdex market which adds to the market as liquidity. You will be able to earn this way too.

I am just a community member, I answered only the easy questions.

4 Likes

Thank you @raz!

Wow, that PRV holders topic was informative!

Incognito is cooking with gas!

3 Likes

Interesting questions, but are you seriously saying none of these came up while talking to @jason nor @andrey?

Are you the Jacob who participated in the AMA?

3 Likes

Yes, I am the same Jacob.

Some of those questions came up, but not all. What I’m saying is that these are the key questions for onboarding bitcoiners, and they need to be addressed in a head-on manner.

In order for me (and others, I’d imagine) to advocate for incognito, we need to have all of those questions answered effectively and clearly. These are the hardest questions, and therefore they can create the most value.

Clear answers surrounding custody of shielded Bitcoin are even needed for me to personally shield more Bitcoin.

EG:

  • if it’s a trusted setup, who or what am I trusting, and what am I trusting them to do?

I don’t mind trusted setups, I hold wBTC. But with wBTC I get very detailed info on who/what I am trusting.

They’re all related in fact: these questions are my way of probing for systemic risk. If that risk is acceptably low, party on. If it’s too high, then we need to work to reduce systemic risks.

To be clear, my questions are in no way an attack on the project. I think these are the questions any Bitcoiner would have before trusting their savings to an external network.

I am a Bitcoiner who practices “Bitcoin monetary maximalism.”

I’ve defined my views on Bitcoin monetary maximalism here:

We need to clearly define and describe the trade-offs Bitcoin users will encounter when shielding coins using incognito.

6 Likes

I fully understand, and I like that you use the word “we”.
It seemed a bit weird neither of the team members would have the answers to those questions.

Like I said, good questions, the answers to many if not all of them are already on the platform, for example in the whitepaper and the roadmap.

What do you mean by fixed nodes? in question 4

I certainly didn’t ask all these questions when I talked with them on Twitter DM.

This thread took hours to create and edit and addresses every concern (read: roadblock to wide endorsement and adoption) that I’m aware of.

Fixed nodes are mentioned here in the 2020 Roadmap thread:

Screenshot_20200403-173654

1 Like

My assumption is that “fixed nodes” refer to nodes that are fixed physically-- eg: they must stay up or the network goes down.

But I don’t know and that’s why I asked many questions about them. And yes, I use “we” because

  1. I’m a token holder
  2. I think that once we have answered these questions thoroughly, and improve any situations that could cause people to have red flags, trust-wise, then it’s basically a clear shot to solving both privacy and scaling simultaneosuly, because right place, right time, right product, etc…

I love this. Thanks for taking the time to write out all your questions here. While I’m sure everyone who has the answers will answer these here/point to posts you can find the answers in, it shows we can continually consolidate and organize, so it’s much easier to find answers in one obvious place. Not to mention, it’s likely there are things we haven’t thought to post answers to that will come of this. Building trust is something we’ll need to double down on if we want the community to grow.

We’re actually working on an “Incognito Handbook” that will address questions like these, and I’m adding yours to it. That way, it’s not such a scattered process to find answers.

Fixed nodes are a combination of 22 vNodes that participate in each shard that remain there, from what I understand. This is to ensure that no hostile takeovers can occur in the network while it remains small. The goal is to grow the network to a large enough size where the network can handle security on its own without the use of fixed nodes. Once that happens, as well as a few other technical developments that I’m not involved in (perhaps @peter or someone can give a better description), then the fixed nodes will be removed and the network will be entirely self sufficient while all positions are fluid and no node has a fixed status.

I will try to answer more questions as time and my knowledge permits, as well as create the handbook. Thanks again for your questions and feel free to add more.

4 Likes

As mentioned in the whitepaper the network needs 2/3 of the network to be up and running to be able to guarantee a safe and stable network. Transactions won’t validate with a lower number than that.

Therefore at this moment, the team holds 2/3 of the nodes on the shards. These nodes never leave the shard. The 1/3 other shard spots are used by randomly selected nodes attached to the network.

The 2/3 team nodes are referred to as “fixed nodes”. Over time the number of fixed nodes will decrease, and with that increase chances of being selected for the other nodes.

1 Like

Does this also mean the core team is earning much more than ordinary users? What is the point of the 5 million PRV premine if the team will earn several dozens of PRV millions from this practice?

It is not just against decentralization, but makes the PRV distribution much less fair.

8,7 million PRV is being mined in the first year and according to this, the Incognito team earns 5,8 million PRV just in the first year, without any lockdown. Technically this is more like a premine than the initial allocation of 5 million PRV.

1 Like

When you say “team”, who are you referring to?

Eg: exactly who operates these fixed nodes?

There are 22 fixed nodes?

Is there a foundation?

What is the foundation’s role?

What is the relationship between the team, foundation, and community?

1 Like

I don’t have an issue with premine/founders reward/whatever.

Look at ethereum for example.

They got as far as they did because of extreme transparency in their early days.

I don’t have a problem with rewarding the initial team neither. The Ethereum foundation distributed 80% of the initial coins and kept a whopping 20%. At the end of this year (according to @Jamie’s information) the Incognito foundation will own more than 80% of the initial coins. And their “premine” is still locked. (What is additional) the main problem with this is centralization, since Incognito is a PoS system, they could maintain this percentage in the market cap basically forever, because even if they don’t “fix their nodes” into the committee anymore, they still have more than 2/3 of the market cap.

Incognito provides information to investors saying: they premined 5% + 5% and 90% is for the community, which is maybe not the case.

In case the earnings from the fixed nodes are the 10% mentioned everything is fine. If that is an additional premine then it is a big problem, because it is not locked and hidden from the public.

1 Like

With team I refer to the people who initiated the project two years ago, and started writing the code. The people who funded that start with their own money.

At this point in the project “the team” may well include everyone else who is involved, from HR, to marketing, to design and everything in between.

Community is everyone else, people who use the wallet app, validators who run a node. People who use the system the team developed and help it grow and improve by sharing ideas, knowledge, services.

Trouble is, I think you’re speculating and extrapolating a bit because there’s no clear explaination of this anywhere I’ve been able to find.

Clearly explaining these issues is critical.

2 Likes

Who are they?

Is that who I’m trusting with the Bitcoin trusted setup?

PS: if they’re Anon that’s also okay. Just… Clarity.

PPS: we could probably get all of the answers to all of the questions on 1-2 pages of standard size paper. And we should. Because then, anyone checking out the project has an easy reference to all the tough questions.

This isn’t about selling. It’s about communication.

Goals of this post:

  1. Learn if incognito can secure and scale my bitcoin, or if it just creates additional risk.
  2. Be able to explain this to others.

BTW, yes I think it may be able to secure and scale my bitcoins but… Yeah still lacking a ton of information.

4 Likes

Hey @Jacob @raz, you guys raised very good and faced reasonable concerns when you haven’t found full answers to your questions.

We have nothing to hide, need to set a clear communication line. Let me jump into this discussion and try to answer clearly on all your questions. I work on it now and get back to you once I have clear answers.

2 Likes

I’m loving this topic, those information are crucial! Tks @Jacob

2 Likes

Hey @Jacob
sorry for delay, tried to combine all answers together, and combined with the answers which is already on this thread

1) Can you tell me the story of PRV (the token), from Genesis?

A bunch of privacy nerds congregated around an idea, pooled some money together, and wrote the first few lines of code. Here’s the story in greater detail.

I hope that into is enough :slight_smile: If you would be interesting to hear personal live stories, we could make a separated AMA call dedicated to such topic


2) Is the supply of PRV auditable?

Anyone can download the chain, and count rewards from the beacon chain beginning at the genesis block. Here are the specs.
There is no dedicated tool for this yet, but anyone can audit the PRV supply using the source code, by running a fullnode.

some of our community members work on analytical tools and chain data visualization.


3) Is there an entity behind the project?

There are 3. The Project, the DAO, and the core team. More information here.


4) The fixed nodes:

Who runs them?

  • The Incognito core team

Are they geo-distributed?

  • Yes

What percentage of them can go down, and the network will still function?

  • 25%

What happens to the network and funds on it if they are taken down?

  • Blocks will not be created, transactions will not not be confirmed. The network will be frozen.

What do they do precisely?

  • The Incognito Chain requires a ⅔ consensus. The fixed slots ensure the network functions smoothly through many key upgrades at this early stage of development.
  • The core team will release all fixed slots once the network is stable enough and the key upgrades have been completed. The fixed committee setup will be dissolved by April 2021, approximately.

:exclamation: In terms of risk, please compare the fixed nodes to the Iota coordinator.

Please can you clarify this question?


5) I’ve linked my wallet to this forum account, and my real name, as well. Is it like…

Only the private key holder can view balances?

  • A balance can be viewed by a user who has a private key or read-only key (both are located in your private key directory). Unless you share these keys with someone else, they will not be able to view your balances.

What can someone learn if they only have my address?

  • They could probably enter it in a search engine and maybe find your profile on incognito.org.
  • They would not be able to retrieve your balances, transaction histories, etc. You can of course easily set up a separate address just for the site.

6) The Bitcoin trusted link currently in use:

Who am I trusting by using it? A company? A person? The node network?

  • This is a temporary custodial setup, maintained by the Incognito core team.
  • The trustless Bitcoin bridge is scheduled to go live closer to the end of May 2020. More information here.

How many machines have access to the relevant private keys?

  • Core team: (lead frontend), (lead backend), and 1 Server with decode private key.

Are the machines running this peg geo-distributed?

  • No

Could an adversary (privacy has many adversaries) seize or destroy all of the machines where these keys are kept? How difficult would that be?

  • Only the aforementioned people have access
  • In this transition period the team is responsible for security of the wallets
  • As you know we are on the way to switch to the trust-less set up.

How much longer will this trusted setup be used?

Not long. The trust-less Bitcoin bridge is scheduled to go live by the end of May 2020.


7) Sharding

Can you ease me into how your sharding implementation works?

  • Each shard has its own committee, which independently produces new blocks. The header of each block is stored on the beacon chain. Other shards could reference if needed. Beacon chain randomly assigns committees for each shard at the end of each epoch.

Do shards have independent economies at all?

  • Shards have independent economies. The reward for a shard’s committee depends on the number of blocks they successfully produce in 1 epoch (~ 350 beacon blocks). The fixed reward for each block is 1.386 PRV for the first year. A shard can produce more or less than 350 blocks in each epoch.

Is there a plan to support smart contracts, where a contract on shard A may need to fetch data stored on shard B?

  • We don’t think it’s necessary to build our own smart contract, and a better way to do it is to let the contract run on Ethereum, and we build incognito mode for it (wrap around it). Essentially, it’s incognito mode for smart contracts. More details here.

Since there are currently 8 shards, can you explain to me their relative roles, or do they all do the same thing, and each shard just adds additional capacity to the network?

  • All shards do the same thing. They enable parallel processing.

Can we do a real-world stress test right on mainnet by setting up a script or some such between some machines to fire PRV at one another at high speeds? This would do wonders to ease my concerns.

  • We conduct our stress tests on the testnet, but theoretically we ca do so for both testnet and mainnet. More details here.

8) Inflation is currently running at 50%.

Is the plan to do something kind of like what monero did, with very high initial inflation and then much lower inflation over time?

Is the supply curve documented anywhere?


9) Coinmarketcap/coingecko

I wasn’t able to get a read on prices anywhere other than the pDEX. Is PRV on any kind of “price listing” site or is the only market the pdex?


10) pDEX

Does the pdex live on the same infrastructure that runs the blockchain?

  • Yes.

Why do I need to move funds from my wallet into the pDEX?

  • So the application layer software cannot link your “Wallet” address with your “pDEX” address.

What’s the relationship between the chain and the pDEX? Is the pdex something that runs on the incognito chain?

  • pDEX is built on-chain, into the protocol. It runs trustlessly. Every trade is a transaction made on the Incognito blockchain.

11 what does this mean?

Screenshot_20200402-234557

  • It was an error, already fixed.

12) What does it mean to become a liquidity provider?

Liquidity providers play an essential role. As the name suggests, they provide liquidity to various pools on pDEX and earn trading fees.

We are also designing an incentive initiative for liquidity providers to earn a percentage of the block reward, paid out of the DAO fund. Follow the discussion here.

Is the plan to do something kind of like what monero did, with very high initial inflation and then much lower inflation over time?

Is the supply curve documented anywhere?


13) Taint

Tainted coins could enter the system. I should say that I don’t personally subscribe to the “tainted coin” theory-- Bitcoin, the protocol has no concept of taint whatsoever. To Bitcoin, they’re all just bitcoins.

Is doing a coinjoin on the way in or on the way out a possible solution to the taint issue? Is that way too complex to implement?

  • A user could deposit a token then withdraw them to the other address. Or user could deposit token A, then withdraw token B (same total value). It’s extremely hard to track when number of users/tx is large
    Additionally
  • You can use CoinJoin on the way in

This question opened a very interesting discussion inside the dev team about how to make deposit/withdrawals more secure and private.


14) How did @Jong’s BTC get lost?

Receiving coins from external wallet anonymously 1

How can we have a system where BTC get lost, ever?

  • The BTC is not lost. It may display ‘expired’ (app only), but it is there (on chain). So a user can navigate to his or her deposit details and simply tap Retry. Details here.

The private key to that wallet was actually destroyed or…?

  • No.

Hopefully I answered on most of the question. Feel free to ping me if you get new questions, or some clarifications are needed.

I am always here :wave:

9 Likes