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Summary: Bitcoin was invented by the anonymous Satoshi Nakamoto as recently as 2008, but it is backed up by a rich intellectual foundation. For instance, The 1776 First Amendment separates church and state, and contemporary American liberation psychologist Nozomi Hayase (2020) argues that money and state should similarly be separated. Just as Isaac Newton’s study of alchemy gave rise to the international gold standard, so has the anonymous creator Satoshi Nakamoto's desire for a “modernized gold standard” given rise to Bitcoin. Indeed, Bloomberg's 2020 report confirms Bitcoin to be gold 2.0. Montesquieu (1774) asserted that laws that secure inalienable rights can only be found in Nature, and the natural laws employed in Bitcoin include its consensus algorithm and the three natural laws of economics (self-interest, competition, and supply and demand). J.S. Mill (1859) preferred free markets to those controlled by governments. Ludwig von Mises (1951) argued against the hazards of fiat currency, urging for a return to the gold standard. Friedrich Hayek (1984) suggested people to invent a sly way to take money back from the hands of the government. Milton Friedman (1994) called for FED to be replaced by an automatic system and predicted the coming of a reliable e-cash. James Buchanan (1988) advocated a monetary constitution to constrain the governmental power of money creation. Tim May (1997) the cypherpunk proclaimed that restricting digital cash impinges on free speech, and envisioned a stateless digital form of money that is uncensorable. The Tofflers (2006) pictured a non-monetary economy. In 2016, UCLA Professor of Finance Bhagwan Chowdhry even nominated Satoshi for a Nobel Prize.
Separation between money and state
The 1791 First Amendment to the U.S. Constitution enshrines free speech and separates church and state, but not money and state. "Under the First Amendment, individuals’ right to create, choose their own money and transact freely was not recognized as a part of freedom of expression that needs to be protected," Japanese-American liberation psychologist Nozomi Hayase (2020) points out (1).
The government, banks and corporations collude together to encroach upon people's liberties by metamorphosing their inalienable rights into a permissioned from of legal rights. Fiat currencies function as a medium of manipulation, indulging big business to generate market monopolies. "Freedom of expression has become further stifled through economic censorship and financial blockage enacted by payment processing companies like Visa and MasterCard," to borrow Hayase's (2020) words.
Satoshi is a Modern Newton
Although most famous for discovering the law of gravity, Isaac Newton was also a practising alchemist. He never managed to turn lead into gold, but he did find a way to transmute silver into gold. In 1717, Newton announced in a report that, based on his studies, one gold guinea coin weighed 21 shillings. Just as Isaac Newton’s study of alchemy gave rise to the international gold standard, so has the desire for a “modernized gold standard” given rise to Bitcoin. "In a way, Satoshi is a modern Newton. They both believed trust is best placed in the unchangeable facets of our economy. Beneath this belief is the assumption that each individual is their own best master," as put by Jon Creasy (2019) (2).
J.S. Mill: free markets preferable to those controlled by governments
John Stuart Mill (1806-1873) the great English philosopher would be a Bitcoiner were he still around today. In On Liberty (1859), Mill concludes that free markets are preferable to those controlled by governments. He argues that economies function best when left to their own devices. Therefore, government intervention, though theoretically permissible, would be counterproductive. Bitcoin is precisely decentralized or uncontrolled by the government, unconfiscatable, permissonless, and disinflationary. Bitcoin regulates itself spontaneously via the ordinary operations of the system. "Rules are enforced without applying any external pressure," in Hayase's (2020) words.
Ludwig von Mises (1958): Liberty is always Freedom from the Government
In The Free Market and its Enemies, theoretical Austrian School economist Ludwig von Mises (1951) argues against the hazards of fiat currency, urging for a return to the gold standard. “A fiat money system cannot go on forever and must one day come to an end,” Von Mises states. The solution is a return to the gold standard, "the only standard which makes the determination of the purchasing power of money independent of the changing ideas of political parties, governments, and pressure groups" under present conditions. Interestingly, this is also one of the key structural attributes of Bitcoin, the world’s first, global, peer-to-peer, decentralized value transfer network.
Actually, Bloomberg's 2020 report on Bitcoin confirms that it is gold 2.0. (3)
Von Mises prefers the price of gold to be determined according to the contemporaneous market conditions. The bitcoin price is, of course, determined across the various global online exchanges, in real-time. There is no central authority setting a spot price for gold after the which the market value is settled on among the traders during the day.
Hayek: Monopoly on Currency should End
Austrian-British Nobel laureate Friedrich Hayek’s theory in his 1976 work, Denationalization of Money, was that not only would the currency monopoly be taken away from the government, but that the monopoly on currency itself should end with multiple alternative currencies competing for acceptance by consumers, in order "to prevent the bouts of acute inflation and deflation which have played the world for the past 60 years." He forcefully argues that if there is no free competition between different currencies within any nation, then there will be no free market. Bitcoin is, again, decentralized, and many other cryptocurrencies have tried to compete with it, though in vain.
In a recently rediscovered video clip from 1984, Hayek actually suggested people to invent a cunning way to take money out of the hands of the government:- “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something they can’t stop” (4). Reviewing those words 36 years hence and it is difficult not to interpret them in the light of Bitcoin.
Milton Friedman Called for FED to be Replaced by an Automatic System
Nobel laureate economist Milton Friedman (1994) was critical of the Federal Reserve due to its poor performance and felt it should be abolished (5). Friedman (1999) believed that the Federal Reserve System should ultimately be replaced with a computer program, which makes us think of the computer code governing Bitcoin (6).[\](https://en.wikipedia.org/wiki/Criticism_of_the_Federal_Reserve#cite_note-:2-12) He (1970) favored a system that would automatically buy and sell securities in response to changes in the money supply. This, he argued, would put a lid on inflation, setting spending and investment decisions on a surer footing (7). Bitcoin is exactly disflationary as its maximum possible supply is 21 million and its block reward or production rate is halved every four years.
Friedman passed away before the coming of bitcoin, but he lived long enough to see the Internet’s spectacular rise throughout the 1990s. “I think that the Internet is going to be one of the major forces for reducing the role of government," said Friedman in a 1999 interview with NTU/F. On the same occasion, he sort of predicted the emergence of Bitcoin, "The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A." (8)
“Of course, Friedman didn’t predict the block chain,” summed up American libertarian economist Jeffery Tucker (2014). “But he was hoping for a trustless system. He saw the need.” (9).
Bitcoin Computer Code as Constitution in the Buchananian Sense
American economist cum Nobel laureate James Buchanan (1988) advocates constitutional constraints on the governmental power to create money (10). Buchanan distinguishes a managed monetary system—a system “that embodies the instrumental use of price-level predictability as a norm of policy”—from an automatic monetary system, “which does not, at any stage, involve the absolute price level” (Buchanan 1962, 164–65). Leaning toward the latter, Buchanan argues that automatic systems are characterized by an organization “of the institutions of private decision-making in such a way that the desired monetary predictability will emerge spontaneously from the ordinary operations of the system” (Buchanan 1962, 164). Again, "Bitcoin regulates itself through the spontaneous force of nature, flourishing healthy price discovery and competition in the best interest of everyone" (Hayase 2020).
Shruti Rajagopalan (2018) argues that the computer code governing how the sundry nodes/computers within the Bitcoin network interact with one another is a kind of monetary constitution in the Buchananian sense. One of Buchanan's greatest inputs is to differentiate the choice of rules from the choice within rule (Buchanan 1990). One may regard the Bitcoin code as a sort of constitution and "the Bitcoin network engaging in both the choice of rules and choice within rules" (Rajagopalan 2018) (11).
Tim May: Restricting Digital Cash may Impinge on Free Speech
Cypherpunks are activists who since the 1980s have advocated global use of strong cryptography and privacy-enhancing technologies as a route to social and political liberation. Tim May (Timothy C. May [1951-2018]), one of the influential cypherpunks published The Crypto Anarchist Manifesto in September 1992, which foretold the coming of Bitcoin (12). Cypherpunks began envisioning a stateless digital form of money that cannot be censored and their collaborative pursuit created a movement akin to the 18th Enlightenment.
At The 7th Conference on Computers, Freedom, and Privacy, Burlingame, CA. in 1997, Tim May equated money with speech, and argued that restricting digital cash may impinge on free speech, for spending money is often a matter of communicating orders to others, to transfer funds, to release funds, etc. In fact, most financial instruments are contracts or orders, instead of physical specie or banknotes (13).
Montesquieu: Laws that secure inalienable rights can only be found in Nature
In his influential work The Spirit of Laws (1748), Montesquieu wrote, “Laws ... are derived from the nature of things … Law, like mathematics, has its objective structure, which no arbitrary whim can alter". Similarly, once a block is added to the end of the Bitcoin blockchain, it is almost impossible to go back and alter the contents of the block, unless every single block after it on the blockchain is altered, too.
Cypherpunks knew that whereas alienable rights that are bestowed by law can be deprived by legislation, inalienable rights are not to be created but can be discovered by reason. Thus, laws that secure inalienable rights cannot be created by humankind but can be found in nature.
The natural laws employed in Bitcoin to enshrine the inalienable monetary right of every human being include its consensus algorithm, and the three natural laws of economics (self-interest, competition, and supply and demand) as identified by Adam Smith, father of modern economics.
Regarding mathematics, bitcoin mining is performed by high-powered computers that solve complex computational math problems. When computers solve these complex math problems on the Bitcoin network, they produce new bitcoin. And by solving computational math problems, bitcoin miners make the Bitcoin payment network trustworthy and secure, by verifying its transaction information.
Regarding economic laws, in accordance with the principle of game theory to generate fairness, miners take part in an open competition. Lining up self-interests of all in a network, with a vigilant balance of risk and rewards, rules are put in force sans the application of any exterior pressure. "Bitcoin regulates itself through the spontaneous force of nature, flourishing healthy price discovery and competition in the best interest of everyone," to borrow the words of Hayase (2020).
A Non-monetary Economy as Visualized by the Tofflers
In their book, Revolutionary Wealth (2006), futurists Alvin Toffler and his wife Heidi Toffler toy with the concept of a world sans money, raising a third kind of economic transaction that is neither one-on-one barter nor monetary exchange. In the end, they settle on the idea that the newer non-monetary economy will exist shoulder-to-shoulder with the monetary sector in the short term, although the latter may eventually be eclipsed by the former in the long run. What both the Tofflers' The Third Wave (1980) and Revolutionary Wealth bring into question is the very premise of monetary exchange. The vacuum left over by cash in such a non-monetary economy may be filled up by Bitcoin as a cryptocurrency.
Satoshi Nakamoto Nominated for Nobel Prize by UCLA Finance Prof.
UCLA Anderson School Professor of Finance Bhagwan Chowdhry nominated Satoshi Nakamoto for the 2016 Nobel Prize in Economics on the following grounds:-
It is secure, relying on almost unbreakable cryptographic code, can be divided into millions of smaller sub-units, and can be transferred securely and nearly instantaneously from one person to any other person in the world with access to internet bypassing governments, central banks and financial intermediaries such as Visa, Mastercard, Paypal or commercial banks eliminating time delays and transactions costs.... Satoshi Nakamoto’s Bitcoin Protocol has spawned exciting innovations in the FinTech space by showing how many financial contracts — not just currencies — can be digitized, securely verified and stored, and transferred instantaneously from one party to another (14).
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I tried my best to be as accurate as possible, but if there are any errors, please let me know so I can fix. I believe this talk is important for all Bitcoin Cash supporters, and I wanted to provide it in written form so people can read it as well as watch the video: https://www.youtube.com/watch?v=uOv0nmOe1_o For me, this was the first time I felt like I understood the issues Amaury's been trying to communicate, and I hope that reading this presentation might help others understand as well.submitted by BCHcain to btc [link] [comments]
Bitcoin Cash’s Culture
“Okay. Hello? Can you hear me? The microphone is good, yeah?
Ok, so after that introduction, I’m going to do the only thing that I can do now, which is disappoint you, because well, that was quite something.
So usually I make technical talks and this time it’s going to be a bit different. I’m going to talk about culture in the Bitcoin Cash ecosystem. So first let’s talk about culture, like what is it? It’s ‘the social behaviors and norms found in human society.’
So we as the Bitcoin Cash community, we are a human society, or at least we look like it. You’re all humans as far as I know, and we have social behaviors and norms, and those social behaviors and norms have a huge impact on the project.
And the reason why I want to focus on that point very specifically is because we have better fundamentals and we have a better product and we are more useful than most other cryptos out there. And I think that’s a true statement, and I think this is a testimony of the success of BCH. But also, we are only just 3% of BTC’s value. So clearly there is something that we are not doing right, and clearly it’s not fundamental, it’s not product, it’s not usefulness. It’s something else, and I think this can be found somewhat in our culture.
So I have this quote here, from Naval Ravikant. I don’t know if you guys know him but he’s a fairly well known speaker and thinker, and he said, “Never trust anyone who does not annoy you from time to time, because it means that they are only telling you what you want to hear.”
And so today I am going to annoy you a bit, in addition to disappointing you, so yeah, it’s going to be very bad, but I feel like we kind of need to do it.
So there are two points, mainly, that I think our culture is not doing the right thing. And those are gonna be infrastructure and game theory. And so I’m going to talk a little bit about infrastructure and game theory.
Right, so, I think there are a few misconceptions by people that are not used to working in software infrastructure in general, but basically, it works like any other kind of infrastructure. So basically all kinds of infrastructure decay, and we are under the assumption that technology always gets better and better and better and never decays. But in terms of that, it actually decays all the time, and we have just a bunch of engineers working at many many companies that keep working at making it better and fighting that decay.
I’m going to take a few examples, alright. Right now if you want to buy a cathode ray tube television or monitor for your computer (I’m not sure why you want to do that because we have better stuff now), but if you want to buy that, it’s actually very difficult now. There are very little manufacturers that even know how to build them. We almost forgot as a human society how to build those stuff. Because, well, there was not as high of a demand for them as there was before, and therefore nobody really worked on maintaining the knowledge or the know how, and the factories, none of that which are required to build those stuff, and therefore we don’t build them. And this is the same for vinyl discs, right? You can buy vinyl disk today if you want, but it’s actually more expensive than it used to be twenty years ago.
We used to have space shuttles. Both Russia and US used to have space shuttles. And now only the US have space shuttles, and now nobody has space shuttles anymore.
And there is an even better counter example to that. It’s that the US, right now, is refining Uranium for nuclear weapons. Like on a regular basis there are people working on that problem. Except that the US doesn’t need any new uranium to make nuclear weapons because they are decommissioning the weapons that are too old and can reuse that uranium to build the new weapon that they are building. The demand for that is actually zero, and still there are people making it and they are just basically making it and storing it forever, and it’s never used. So why is the US spending money on that? Well you would say governments are usually pretty good at spending money on stuff that are not very useful, but in that case there is a very good reason. And the good reason is that they don’t want to forget how it’s done. Because maybe one day it’s going to be useful. And acquiring the whole knowledge of working with uranium and making enriched uranium, refining uranium, it’s not obvious. It’s a very complicated process. It involves very advanced engineering and physics, a lot of that, and keeping people working on that problem ensures that knowledge is kept through time. If you don’t do that, those people are going to retire and nobody will know how to do it. Right.
So in addition to decaying infrastructure from time to time, we can have zero days in software, meaning problems in the software that are not now exploited live on the network. We can have denial of service attack, we can have various failures on the network, or whatever else, so just like any other infrastructure we need people that essentially take care of the problem and fight the decay constantly doing maintenance and also be ready to intervene whenever there is some issue. And that means that even if there is no new work to be done, you want to have a large enough group of people that are working on that everyday just making it all nice and shiny so that when something bad happens, you have people that understand how the system works. So even if for nothing else, you want a large enough set of people working on infrastructure for that to be possible.
So we’re not quite there yet, and we’re very reliant on BTC. Because the software that we’re relying on to run the network is actually a fork to the BTC codebase. And this is not specific to Bitcoin Cash. This is also true for Litecoin, and Dash, and Zcash and whatever. There are many many crypotos that are just a fork of the Bitcoin codebase. And all those crypos they actually are reliant on BTC to do some maintenance work because they have smaller teams working on the infrastructure. And as a result any rational market cannot price those other currencies higher than BTC. It would just not make sense anymore. If BTC were to disappear, or were to fail on the market, and this problem is not addressed, then all those other currencies are going to fail with it. Right? And you know that may not be what we want, but that’s kind of like where we are right now.
So if we want to go to the next level, maybe become number one in that market, we need to fix that problem because it’s not going to happen without it.
So I was mentioning the 3% number before, and it’s always very difficult to know what all the parameters are that goes into that number, but one of them is that. Just that alone, I’m sure that we are going to have a lower value than BTC always as long as we don’t fix that problem.
Okay, how do we fix that problem? What are the elements we have that prevent us from fixing that problem? Well, first we need people with very specific skill sets. And the people that have experience in those skill sets, there are not that many of them because there are not that many places where you can work on systems involving hundreds of millions, if not billions of users, that do like millions of transactions per second, that have systems that have hundreds of gigabytes per second of throughput, this kind of stuff. There are just not that many companies in the world that operate on that scale. And as a result, the number of people that have the experience of working on that scale is also pretty much limited to the people coming out of those companies. So we need to make sure that we are able to attract those people.
And we have another problem that I talked about with Justin Bons a bit yesterday, that we don’t want to leave all that to be fixed by a third party.
It may seem nice, you know, so okay, I have a big company making good money, I’m gonna pay people working on the infrastructure for everybody. I’m gonna hire some old-time cypherpunk that became famous because he made a t-shirt about ERISA and i’m going to use that to promote my company and hire a bunch of developers and take care of the infrastructure for everybody. It’s all good people, we are very competent. And indeed they are very competent, but they don’t have your best interest in mind, they have their best interest in mind. And so they should, right? It’s not evil to have your own interest in mind, but you’ve got to remember that if you delegate that to others, they have their best interest in mind, they don’t have yours. So it’s very important that you have different actors that have different interests that get involved into that game of maintaining the infrastructure. So they can keep each other in check.
And if you don’t quite understand the value proposition for you as a business who builds on top of BCH, the best way to explain that to whoever is doing the financials of your company is as an insurance policy. The point of the insurance on the building where your company is, or on the servers, is so that if everything burns down, you can get money to get your business started and don’t go under. Well this is the same thing. Your business relies on some infrastructure, and if this infrastructure ends up going down, disappearing, or being taken in a direction that doesn’t fit your business, your business is toast. And so you want to have an insurance policy there that insures that the pieces that you’re relying on are going to be there for you when you need them.
Alright let’s take an example. In this example, I purposefully did not put any name because I don’t want to blame people. I want to use this as an example of a mistake that were made. I want you to understand that many other people have done many similar mistakes in that space, and so if all you take from what I’m saying here is like those people are bad and you should blame them, this is like completely the wrong stuff. But I also think it’s useful to have a real life example.
So on September 1st, at the beginning of the week, we had a wave of spam that was broadcasted on the network. Someone made like a bunch of transactions, and those were very visibly transactions that were not there to actually do transactions, they were there just to create a bunch of load on the network and try to disturb its good behavior.
And it turned out that most miners were producing blocks from 2 to 8 megabytes, while typical market demand is below half a megabyte, typically, and everything else above that was just spam, essentially. And if you ask any people that have experience in capacity planning, they are going to tell you that those limits are appropriate. The reason why, and the alternative to raising those limits that you can use to mitigate those side effects are a bit complicated and they would require a talk in and of itself to go into, so I’m going to just use an argument from authority here, but trust me, I know what I’m talking about here, and this is just like raising those limits is just not the solution. But some pool decided to increase that soft cap to 32 megs. And this has two main consequences that I want to dig in to explain what is not the right solution.
And the first one is that we have businesses that are building on BCH today. And those businesses are the ones that are providing value, they are the ones making our network valuable. Right? So we need to treat those people as first class citizens. We need to attract and value them as much as we can. And those people, they find themselves in the position where they can either dedicate their resources and their attention and their time to make their service better and more valuable for users, or maybe expand their service to more countries, to more markets, to whatever, they can do a lot of stuff, or they can spend their time and resources to make sure the system works not when you have like 10x the usual load, but also 100x the usual load. And this is something that is not providing value to them, this is something that is not providing value to us, and I would even argue that this is something that is providing negative value.
Because if those people don’t improve their service, or build new services, or expand their service to new markets, what’s going to happen is that we’re not going to do 100x. 100x happens because people provide useful services and people start using it. And if we distract those people so that they need to do random stuff that has nothing to do with their business, then we’re never going to do 100x. And so having a soft cap that is way way way above what is the usual market demand (32 megs is almost a hundred times what is the market demand for it), it’s actually a denial of service attack that you open for anyone that is building on the chain.
We were talking before, like yesterday we were asking about how do we attract developers, and one of the important stuff is that we need to value that over valuing something else. And when we take this kind of move, the signal that we send to the community, to the people working on that, is that people yelling very loudly on social media, their opinion is more valued than your work to make a useful service building on BCH. This is an extremely bad signal to send. So we don’t want to send those kind of signals anymore.
That’s the first order effect, but there’s a second order effect, and the second order effect is to scale we need people with experience in capacity planning. And as it turns out big companies like Google, and Facebook, and Amazon pay good money, they pay several 100k a year to people to do that work of capacity planning. And they wouldn’t be doing that if they just had to listen to people yelling on social media to find the answer. Right? It’s much cheaper to do the simple option, except the simple option is not very good because this is a very complex engineering problem. And not everybody is like a very competent engineer in that domain specifically. So put yourself in the shoes of some engineers who have skills in that particular area. They see that happening, and what do they see? The first thing that they see is that if they join that space, they’re going to have some level of competence, some level of skill, and it’s going to be ignored by the leaders in that space, and ignoring their skills is not the best way to value it as it turns out. And so because of that, they are less likely to join it. But there is a certain thing that they’re going to see. And that is that because they are ignored, some shit is going to happen, some stuff are going to break, some attacks are going to be made, and who is going to be called to deal with that? Well, it’s them. Right? So not only are they going to be not valued for their stuff, the fact that they are not valued for their stuff is going to put them in a situation where they have to put out a bunch of fires that they would have known to avoid in the first place. So that’s an extremely bad value proposition for them to go work for us. And if we’re going to be a world scale currency, then we need to attract those kinds of people. And so we need to have a better value proposition and a better signaling that we send to them.
Alright, so that’s the end of the first infrastructure stuff. Now I want to talk about game theory a bit, and specifically, Schelling points.
So what is a Schelling point? A Schelling point is something that we can agree on without especially talking together. And there are a bunch of Schelling points that exist already in the Bitcoin space. For instance we all follow the longest chain that have certain rules, right? And we don’t need to talk to each other. If I’m getting my wallet and I have some amount of money and I go to any one of you here and you check your wallet and you have that amount of money and those two amounts agree. We never talk to each other to come to any kind of agreement about how much each of us have in terms of money. We just know. Why? Because we have a Schelling point. We have a way to decide that without really communicating. So that’s the longest chain, but also all the consensus rules we have are Schelling points. So for instance, we accept blocks up to a certain size, and we reject blocks that are bigger than that. We don’t constantly talk to each other like, ‘Oh by the way do you accept 2 mb blocks?’ ‘Yeah I do.’ ‘Do you accept like 3 mb blocks? And tomorrow will you do that?’
We’re not doing this as different actors in the space, constantly worrying each other. We just know there is a block size that is a consensus rule that is agreed upon by almost everybody, and that’s a consensus rule. And all the other consensus rules are effectively changing Schelling points. And our role as a community is to create valuable Schelling points. Right? You want to have a set of rules that provide as much value as possible for different actors in the ecosystem. Because this is how we win. And there are two parts to that. Even though sometimes we look and it’s just one thing, but there are actually two things.
The first one is that we need to decide what is a valuable Schelling point. And I think we are pretty good at this. And this is why we have a lot of utility and we have a very strong fundamental development. We are very good at choosing what is a good Schelling point. We are very bad at actually creating it and making it strong.
So I’m going to talk about that.
How do you create a new Schelling point. For instance, there was a block size, and we wanted a new block size. So we need to create a new Schelling point. How do you create a new Schelling point that is very strong? You need a commitment strategy. That’s what it boils down to. And the typical example that is used when discussing Schelling points is nuclear warfare. So think about that a bit. You have two countries that both have nuclear weapons. And one country sends a nuke on the other country. Destroys some city, whatever, it’s bad. When you look at it from a purely rational perspective, you will assume that people are very angry, and that they want to retaliate, right? But if you put that aside, there is actually no benefit to retaliating. It’s not going to rebuild the city, it’s not going to make them money, it’s not going to give them resources to rebuild it, it’s not going to make new friends. Usually not. It’s just going to destroy some stuff in the other guy that would otherwise not change anything because the other guys already did the damage to us. So if you want nuclear warfare to actually prevent war like we’ve seen mostly happening in the past few decades with the mutually assured destruction theory, you need each of those countries to have a very credible commitment strategy, which is if you nuke me, I will nuke you, and I’m committing to that decision no matter what. I don’t care if it’s good or bad for me, if you nuke me, I will nuke you. And if you can commit to that strongly enough so that it’s credible for other people, it’s most likely that they are not going to nuke you in the first place because they don’t want to be nuked. And it’s capital to understand that this commitment strategy, it’s actually the most important part of it. It’s not the nuke, it’s not any of it, it’s the commitment strategy. You have the right commitment strategy, you can have all the nuke that you want, it’s completely useless, because you are not deterring anyone from attacking you.
There are many other examples, like private property. It’s something usually you’re going to be willing to put a little bit of effort to defend, and the effort is usually way higher than the value of the property itself. Because this is your house, this is your car, this is your whatever, and you’re pretty committed to it, and therefore you create a Schelling point over the fact that this is your house, this is your car, this is your whatever. People are willing to use violence and whatever to defend their property. This is effectively, even if you don’t do it yourself, this is what happens when you call the cops, right? The cops are like you stop violating that property or we’re going to use violence against you. So people are willing to use a very disproportionate response even in comparison to the value of the property. And this is what is creating the Schelling point that allows private property to exist.
This is the commitment strategy. And so the longest chain is a very simple example. You have miners and what miners do when they create a new block, essentially they move from one Schelling point when a bunch of people have some amount of money, to a new Schelling point where some money has moved, and we need to agree to the new Schelling point. And what they do is that they commit a certain amount of resources to it via proof of work. And this is how they get us to pay attention to the new Schelling point. And so UASF is also a very good example of that where people were like we activate segwit no matter what, like, if it doesn’t pan out, we just like busted our whole chain and we are dead.
Right? This is like the ultimate commitment strategy, as far as computer stuff is involved. It’s not like they actually died or anything, but as far as you can go in the computer space, this is very strong commitment strategy.
So let me take an example that is fairly inconsequential in its consequences, but I think explains very well. The initial BCH ticker was BCC. I don’t know if people remember that. Personally I remember reading about it. It was probably when we created it with Jonald and a few other people. And so I personally was for XBC, but I went with BCC, and most people wanted BCC right? It doesn’t matter. But it turned out that Bitfinex had some Ponzi scheme already listed as BCC. It was Bitconnect, if you remember. Carlos Matos, you know, great guy, but Bitconnect was not exactly the best stuff ever, it was a Ponzi scheme. And so as a result Bitifnex decided to list Bitcoin Cash as BCH instead of BCC, and then the ball started rolling and now everybody uses BCH instead of BCC.
So it’s not all that bad. The consequences are not that very bad. And I know that many of you are thinking that right now. Why is this guy bugging us about this? We don’t care if it’s BCC or BCH. And if you’re doing that, you are exactly proving my point.
Because … there are people working for Bitcoin.com here right? Yeah, so Bitcoin.com is launching an exchange, or just has launched, it’s either out right now or it’s going to be out very soon. Well think about that. Make this thought experiment for yourself. Imagine that Bitcoin.com lists some Ponzi scheme as BTC, and then they decide to list Bitcoin as BTN. What do you think would be the reaction of the Bitcoin Core supporter? Would they be like, you know what? we don’t want to be confused with some Ponzi scheme so we’re going to change everything for BTN. No, they would torch down Roger Ver even more than they do now, they would torch down Bitcoin.com. They would insult anyone that would suggest that this was a good idea to go there. They would say that everyone that uses the stuff that is BTC that it’s a ponzi scheme, and that it’s garbage, and that if you even talk about it you are the scum of the earth. Right? They would be extremely committed to whatever they have.
And I think this is a lesson that we need to learn from them. Because even though it’s a ticker, it’s not that important, it’s that attitude that you need to be committed to that stuff if you want to create a strong Schelling point, that allows them to have a strong Schelling point, and that does not allow us to have that strong of a Schelling point.
Okay, so yesterday we had the talk by Justin Bons from Cyber Capital, and one of the first things he said in his talk, is that his company has a very strong position in BCH. And so that changed the whole tone of the talk. You gotta take him seriously because his money is where his mouth is. You know that he is not coming on the stage and telling you random stuff that comes from his mind or tries to get you to do something that he doesn’t try himself. That doesn’t mean he’s right. Maybe he’s wrong, but if he’s wrong, he’s going bankrupt. And you know just for that reason, maybe it’s worth it to listen to it a bit more than some random person saying random stuff when they have no skin in the game.
And it makes him more of a leader in the space. Okay we have some perception in this space that we have a bunch of leaders, but many of them don’t have skin in the game. And it is very important that they do. So when there is some perceived weakness from BCH, if you act as an investor, you are going to diversify. If you act as a leader, you are going to fix that weakness. Right? And so, leaders, it’s not like you can come here and decide well, I’m a leader now. Leaders are leaders because people follow them. It seems fairly obvious, but … and you are the people following the leaders, and I am as well. We decide to follow the opinion of some people more than the opinion of others. And those are the defacto leaders of our community. And we need to make sure that those leaders that we have like Justin Bons, and make sure that they have a strong commitment to whatever they are leading you to, because otherwise you end up in this situation:
Where you got a leader, he’s getting you to go somewhere, he has some goal, he has some whatever. In this case he is not that happy with the British people. But he’s like give me freedom or give me death, and he’s going to fight the British, but at the same time he’s like you know what? Maybe this shit isn’t gonna pan out, you gotta make sure you have your backup plan together, you have your stash of British pound here. You know, many of us are going to die, but that’s a sacrifice I’m willing to make.
That’s not the leader that you want.
I’m going to go to two more examples and then we’re going to be done with it. So one of them is Segwit 2x. Segwit 2x came with a time where some people wanted to do UASF. And UASF was essentially people that set up a modified version of their Bitcoin node that would activate segwit on August 1, no matter what. Right? No matter what miners do, no matter what other people do, it’s going to activate segwit. And either I’m going to be on the other fork, or I’m going to be alone and bust. Well, the alternative proposal was segwit 2x. Where people would activate segwit and then increase the size of the block. And what happened was that one of the sides had a very strong commitment strategy, and the other side, instead of choosing a proportional commitment strategy, what they did was that they modified the activation of segwit 2x to be compatible with UASF. And in doing so they both validate the commitment strategy done by the opposite side, and they weaken their own commitment strategy. So if you look at that, and you understand game theory a bit, you know what’s going to happen. Like the fight hasn’t even started and UASF has already won. And when I saw that happening, it was a very important development to me, because I have some experience in game theory, a lot of that, so I understood what was happening, and this is what led me to commit to BCH, which was BCC at the time, 100%. Because I knew segwit 2x was toast, even though it had not even started, because even though they had very strong cards, they are not playing their cards right, and if you don’t play your cards right, it doesn’t matter how strong your cards are.
Okay, the second one is emergent consensus. And the reason I wanted to put those two examples here is because I think those are the two main examples that lead to the fact that BTC have small blocks and we have big blocks and we’re a minority chain. Those are like the two biggest opportunities we had to have big blocks on BTC and we blew both of them for the exact same reason.
So emergent consensus is like an interesting technology that allows you to trade your bigger block without splitting the network. Essentially, if someone starts producing blocks that are bigger than … (video skips) ,,, The network seems to be following the chain that has larger blocks, eventually they’re going to fall back on that chain, and that’s a very clevery mechanism that allows you to make the consensus rules softer in a way, right? When everybody has the same consensus rules, it still remains enforced, but if a majority of people want to move to a new point, they can do so by bringing others with them without creating a fork. That is a very good activation mechanism for changing the block size, for instance, or it can be used to activate other stuff.
There is a problem, though. This mechanism isn’t able to set a new point. It’s a way to activate a new Schelling point when you have one, but it provides no way to decide when and where or to what value or to anything to where we are going. So this whole strategy lacks the commitment aspect of it. And because it lacks the commitment aspect of it, it was unable to activate properly. It was good, but it was not sufficient in itself. It needs to be combined with a commitment strategy. And especially on that one there are some researchers that wrote a whole paper (https://eprint.iacr.org/2017/686.pdf) unpacking the whole game theory that essentially come to that conclusion that it’s not going to set a new size limit because it lacked the commitment aspect of it. But they go on like they model all the mathematics of it, they give you all the numbers, the probability, and the different scenarios that are possible. It’s a very interesting paper. If you want to see, like, because I’m kind of explaining the game theory from a hundred mile perspective, but actually you can deep dive into it and if you want to know the details, they are in there. People are doing that. This is an actual branch of mathematics.
Alright, okay so conclusion. We must avoid to weaken our commitment strategy. And that means that we need to work in a way where first there is decentralization happening. Everybody has ideas, and we fight over them, we decide where we want to go, we put them on the roadmap, and once it’s on the roadmap, we need to commit to it. Because when people want to go like, ‘Oh this is decentralized’ and we do random stuff after that, we actually end up with decentralization, not decentralization in a cooperative manner, but like in an atomization manner. You get like all the atoms everywhere, we explode, we destroy ourself.
And we must require a leader to have skin in the game, so that we make sure we have good leaders. I have a little schema to explain that. We need to have negotiations between different parties, and because there are no bugs, the negotiation can last for a long time and be tumultuous and everything, and that’s fine, that’s what decentralization is looking like at that stage, and that’s great and that makes the system strong. But then once we made a decision, we got to commit to it to create a new Schelling point. Because if we don’t, the new Schelling point is very weak, and we get decentralization in the form of disintegration. And I think we have not been very good to balance the two. Essentially what I would like for us to do going forward is encouraging as much as possible decentralization in the first form. But consider people who participate in the second form, as hostile to BCH, because their behavior is damaging to whatever we are doing. And they are often gonna tell you why we can’t do that because it’s permissionless and decentralized, and they are right, this is permissionless and decentralized, and they can do that. We don’t have to take it seriously. We can show them the door. And not a single person can do that by themself, but as a group, we can develop a culture where it’s the norm to do that. And we have to do that.”
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1/ People often ask me why I’m so “against” Ethereum. Why do I go out of my way to point out flaws or make analogies that put it in a bad light?Intro
2/ First, ETH’s architecture & culture is opposite that of Bitcoin, and yet claims to offer same solutions: decentralization, immutability, SoV, asset issuance, smart contracts, …Agree! I personally find Ethereum culture far saner, though I am a bit biased :)
Second, ETH is considered a crypto ‘blue chip’, thus colors perception of uninformed newcomers.
3/ I've followed Ethereum since 2014 & feel a responsibility to share my concerns. IMO contrary to its marketing, ETH is at best a science experiment. It’s now valued at $13B, which I think is still too high.Not an argument
4/ I agree with Ethereum developer Vlad Zamfir that it’s not money, not safe, and not scalable. https://twitter.com/VladZamfistatus/838006311598030848 …I'm pretty sure Vlad would say the exact same thing about Bitcoin
@VladZamfir Eth isn't money, so there is no monetary policy. There is currently fixed block issuance with an exponential difficulty increase (the bomb).
5/ To me the first red flag came up when in our weekly hangout we asked the ETH founders about to how they were going to scale the network. (We’re now 4.5 years later, and sharding is still a pipe dream.)The core principles have been known for years, the core design for nearly a year, and details for months, with implementations on the way. So sharding is definitely not at the pipe dream stage at this point.
Ethereum's Joe Lubin in June 2014: "anticipate blockchain bloat—working on various sharding ideas". https://www.youtube.com/watch?v=oJG9g0lCPU8&feature=youtu.be&t=36m41s …
6/ Despite strong optimism that on-chain scaling of Ethereum was around the corner (just another engineering job), this promise hasn’t been delivered on to date.Sure, sharding is not yet finished. Though more incremental stuff has been going well, eg. uncle rates are at near record lows despite very high chain usage.
7/ Recently, a team of reputable developers decided to peer review a widely anticipated Casper / sharding white paper, concluding that it does not live up to its own claims.That review was off the mark in many ways, eg. see https://twitter.com/technocrypto/status/1071111404340604929, and by the way CBC is not even a prerequisite for Serenity
Unmerciful peer review of Vlad Zamfir & co's white paper to scale Ethereum: "the authors do NOT prove that the CBC Casper family of protocols is Byzantine fault tolerant in either practice or theory".
8/ On the 2nd layer front, devs are now trying to scale Ethereum via scale via state channels (ETH’s version of Lightning), but it is unclear whether main-chain issued ERC20 type tokens will be portable to this environment.Umm... you can definitely use Raiden with arbitrary ERC20s. That's why the interface currently uses WETH (the ERC20-fied version of ether) and not ETH
9/ Compare this to how the Bitcoin Lightning Network project evolved:Ok
elizabeth stark @starkness: For lnd: First public code released: January 2016 Alpha: January 2017 Beta: March 2018…
10/ Bitcoin’s Lightning Network is now live, and is growing at rapid clip.Sure, though as far as I understand there's still a low probability of finding routes for nontrivial amounts, and there's capital lockup griefing vectors, and privacy issues.... FWIW I personally never thought lightning is unworkable, it's just a design that inherently runs into ten thousand small issues that will likely take a very long time to get past.
Jameson Lopp @lopp: Lightning Network: January 2018 vs December 2018
11/ In 2017, more Ethereum scaling buzz was created, this time the panacea was “Plasma”.Yay, Plasma!
@TuurDemeester Buterin & Poon just published a new scaling proposal for Ethereum, "strongly complementary to base-layer PoS and sharding": plasma.io https://twitter.com/VitalikButerin/status/895467347502182401 …
12/ However, upon closer examination it was the recycling of some stale ideas, and the project went nowhere:Just because Peter Todd rejected something as "insecure" doesn't mean that it is. In general, the ethereum research community is quite convinced that the fundamental Plasma design is fine, and as far as I understand there are formal proofs on the way. The only insecurity that can't be avoided is mass exit vulns, and channel-based systems have those too.
Peter Todd @peterktodd These ideas were all considered in the Treechains design process, and ultimately rejected as insecure.
13/ The elephant in the room is the transition to proof-of-stake, an “environmentally friendly” way to secure the chain. (If this was the plan all along, why create a proof-of-work chain first?)Umm... we created a proof of work chain first because we did not have a satisfactory proof of stake algo initially?
@TuurDemeester "Changing from proof of work to proof of stake changes the economics of the system, all the rules change and it will impact everything."
14/ For the uninitiated, here’s a good write-up that highlights some of the fundamental design problems of proof-of-stake. Like I said, this is science experiment territory.And here's a set of long arguments from me on why proof of stake is just fine: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ. For a more philosophical piece, see https://medium.com/@VitalikButerin/a-proof-of-stake-design-philosophy-506585978d51
15/ Also check out this thread about how Proof of Stake blockchains require subjectivity (i.e. a trusted third party) to achieve consensus: https://forum.blockstack.org/t/pos-blockchains-require-subjectivity-to-reach-consensus/762?u=muneeb … and this thread on Bitcoin: https://www.reddit.com/Bitcoin/comments/59t48m/proofofstake_question/Yes, we know about weak subjectivity, see https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-subjectivity/. It's really not that bad, especially given that users need to update their clients once in a while anyway, oh and by the way even if the weak subjectivity assumption is broken an attacker still needs to gather up that pile of old keys making up 51% of the stake. And also to defend against that there's Universal Hash Time.
16/ Keep in mind that Proof of Stake (PoS) is not a new concept at all. Proof-of-Work actually was one of the big innovations that made Bitcoin possible, after PoS was deemed impractical because of censorship vulnerability.Oh I definitely agree that proof of work was superior for bootstrap, and I liked it back then especially because it actually managed to be reasonably egalitarian around 2009-2012 before ASICs fully took over. But at the present time it doesn't really have that nice attribute.
@TuurDemeester TIL Proof-of-stake based private currency designs date at least back to 1998. https://medium.com/swlh/the-untold-history-of-bitcoin-enter-the-cypherpunks-f764dee962a1 …
17/ Over the years, this has become a pattern in Ethereum’s culture: recycling old ideas while not properly referring to past research and having poor peer review standards. This is not how science progresses.Tuur Demeester added,I try to credit people whenever I can; half my blog and ethresear.ch posts have a "special thanks" section right at the top. Sometimes we end up re-inventing stuff, and sometimes we end up hearing about stuff, forgetting it, and later re-inventing it; that's life as an autodidact. And if you feel you've been unfairly not credited for something, always feel free to comment, people have done this and I've edited.
[email protected] has been repeatedly accused of /criticised for not crediting prior art. Once again with plasma: https://twitter.com/DamelonBCWS/status/895643582278782976 …
18/ One of my big concerns is that sophistry and marketing hype is a serious part of Ethereum’s success so far, and that overly inflated expectations have lead to an inflated market cap.Ok, go on.
19/ Let’s illustrate with an example....
20/ A few days ago, I shared a critical tweet that made the argument that Ethereum’s value proposition is in essence utopian....
@TuurDemeester Ethereum-ism sounds a bit like Marxism to me:
- What works today (PoW) is 'just a phase', the ideal & unproven future is to come: Proof-of-Stake.…
21/ I was very serious about my criticism. In fact, each one of the three points addressed what Vitalik Buterin has described as “unique value propositions of Ethereum proper”. https://www.reddit.com/ethereum/comments/5jk3he/how_to_prevent_the_cannibalism_of_ethereum_into/dbgujr8/ …...
22/ My first point, about Ethereum developers rejecting Proof-of-Work, has been illustrated many times over By Vitalik and others. (See earlier in this tweetstorm for more about how PoS is unproven.)See above for links as to why I think proof of stake is great.
Vitalik Non-giver of Ether @VitalikButerin: I don't believe in proof of work!
23/ My second point addresses Ethereum’s romance with the vague and dangerous notion of ‘social consensus’, where disruptive hard-forks are used to ‘upgrade’ or ‘optimize’ the system, which inevitably leads to increased centralization. More here:See my rebuttal to Tuur's rebuttal :)
24/ My third point addresses PoS’ promise of perpetual income to ETHizens. Vitalik is no stranger to embracing free lunch ideas, e.g. during his 2014 ETH announcement speech, where he described a coin with a 20% inflation tax as having “no cost” to users.Yeah, I haven't really emphasized perpetual income to stakers as a selling point in years. I actually favor rewards being as low as possible while still being high enough for security.
25/ In his response to my tweet, Vitalik adopted my format to “play the same game” in criticizing Bitcoin. My criticisms weren't addressed, and his response was riddled with errors. Yet his followers gave it +1,000 upvotes!Ok, let's hear about what the errors are...
Vitalik Non-giver of Ether @VitalikButerin: - What works today (L1) is just a phase, ideal and unproven future (usable L2) is to come - Utopian concept of progress: we're already so confident we're finished we ain't needin no hard forks…
26/ Rebuttal: - BTC layer 1 is not “just a phase”, it always will be its definitive bedrock for transaction settlement. - Soft forking digital protocols has been the norm for over 3 decades—hard-forks are the deviation! - Satoshi never suggested hyperbitcoinization as a goal.Sure, but (i) the use of layer 1 for consumer payments is definitely, in bitcoin ideology, "just a phase", (ii) I don't think you can make analogies between consensus protocols and other kinds of protocols, and between soft forking consensus protocols and protocol changes in other protocols, that easily, (iii) plenty of people do believe that hyperbitcoinization as a goal. Oh by the way: https://twitter.com/tuurdemeestestatus/545993119599460353
27/ This kind of sophistry is exhausting and completely counter-productive, but it can be very convincing for an uninformed retail public.Ok, go on.
28/ Let me share a few more inconvenient truths....
29/ In order to “guarantee” the transition to PoS’ utopia of perpetual income (staking coins earns interest), a “difficulty bomb” was embedded in the protocol, which supposedly would force miners to accept the transition.The intended goal of the difficulty bomb was to prevent the protocol from ossifying, by ensuring that it has to hard fork eventually to reset the difficulty bomb, at which point the status quo bias in favor of not changing other protocol rules at the same time would be weaker. Though forcing a switch to PoS was definitely a key goal.
30/ Of course, nothing came of this, because anything in the ETH protocol can be hard-forked away. Another broken promise.How is that a broken promise? There was no social contract to only replace the difficulty-bombed protocol with a PoS chain.
Tuur Demeester @TuurDemeester: Looks like another Ethereum hard-fork is going to remove the "Ice Age" (difficulty increase meant to incentivize transition to PoS). https://www.cryptocompare.com/coins/guides/what-is-the-ethereum-ice-age/ …
32/ This was criticized by P2P & OS developers as a reckless notion, given that every smart contracts is actually a “de novo cryptographic protocol”. In other words, it’s playing with fire. https://bitcointalk.org/index.php?topic=1427885.msg14601127#msg14601127 …See above
33/ The modular approach to Bitcoin seems to be much better at compartmentalizing risk, and thus reducing attack surfaces. I’ve written about modular scaling here...To be fair, risk is reduced because Bitcoin does less.
34/ Another huge issue that Ethereum has is with scaling. By putting “everything on the blockchain” (which stores everything forever) and dubbing it “the world computer”, you are going to end up with a very slow and clogged up system.We never advocated "putting everything on the blockchain". The phrase "world computer" was never meant to be interpreted as "everyone's personal desktop", but rather as a common platform specifically for the parts of applications that require consensus on shared state. As evidence of this, notice how Whisper and Swarm were part of the vision as complements to Ethereum right from the start.
Christopher Allen @ChristopherA: AWS cost: $0.000000066 for calc, Ethereum: $26.55. This is about 400 million times as expensive. World computer? https://hackernoon.com/ether-purchase-power-df40a38c5a2f …
35/ By now the Ethereum bloat is so bad that cheaply running an individual node is practically impossible for a lay person. ETH developers are also imploring people to not deploy more smart contract apps on its blockchain.Umm.... I just spun up a node from scratch last week. On a consumer laptop.
Tuur Demeester @TuurDemeester: But... deploying d-apps on the "Ethereum Virtual Machine" is exactly what everyone was encouraged to do for the past 4 years. Looks like on-chain scaling wasn't such a great idea after all.
36/ As a result, and despite the claims that running a node in “warp” mode is easy and as good as a full node, Ethereum is becoming increasingly centralized.See above
@TuurDemeester Finally a media article touching on the elephant in the room: Ethereum has become highly centralized. #infura https://www.coindesk.com/the-race-is-on-to-replace-ethereums-most-centralized-layeamp?__twitter_impression=true …
37/ Another hollow claim: in 2016, Ethereum was promoted as being censorship resistant…Yes, the DAO fork did violate the notion of absolute immutability. However, the "forking the DAO will lead to doom and gloom" crowd was very wrong in one key way: it did NOT work as a precedent justifying all sorts of further state interventions. The community clearly drew a line in the sand by firmly rejecting EIP 867, and EIP 999 seems to now also be going nowhere. So it seems like there's some evidence that the social contract of "moderately but not infinitely strong immutability" actually can be stable.
Tuur Demeester @TuurDemeester: Pre TheDAO #Ethereum presentation: "uncensorable, code is law, bottom up". http://ow.ly/qW49302Pp92
38/ Yet later that year, after only 6% of ETH holders had cast a vote, ETH core devs decided to endorse a hard-fork that clawed back the funds from a smart contract that held 4.5% of all ETH in circulation. More here: ...See above
39/ Other potential signs of centralization: Vitalik Buterin signing a deal with a Russian government institution, and ETH core developers experimenting with semi-closed meetings: https://twitter.com/coindesk/status/902892844955860993 …,Suppose I were to tomorrow sign up to work directly for Kim Jong Un. What concretely would happen to the Ethereum protocol? I suspect very little; I am mostly involved in the Serenity work, and the other researchers have proven very capable of both pushing the spec forward even without me and catching any mistakes with my work. So I don't think any argument involving me applies. And we ended up deciding not to do more semi-closed meetings.
Hudson Jameson @hudsonjameson: The "semi-closed" Ethereum 1.x meeting from last Friday was an experiment. The All Core Dev meeting this Friday will be recorded as usual.
40/ Another red flag to me is the apparent lack of relevant expertise in the ETH development community. (Check the responses…)I personally am confident in the talents of our core researchers, and our community of academic partners. Most recently the latter group includes people from Starkware, Stanford CBR, IC3, and other groups.
Tuur Demeester @TuurDemeester: Often heard: "but Ethereum also has world class engineers working on the protocol". Please name names and relevant pedigree so I can follow and learn. https://twitter.com/TuurDemeestestatus/963029019447955461 …
41/ For a while, Microsoft veteran Lucius Meredith was mentioned as playing an important role in ETH scaling, but now he is likely distracted by the failure of his ETH scaling company RChain. https://blog.ethereum.org/2015/12/24/understanding-serenity-part-i-abstraction/ …I have no idea who described Lucius Meredith's work as being important for the Serenity roadmap.... oh and by the way, RChain is NOT an "Ethereum scaling company"
42/ Perhaps the recently added Gandalf of Ethereum, with his “Fellowship of Ethereum Magicians” [sic] can save the day, but imo that seems unlikely...Honestly, I don't see why Ethereum Gandalf needs to save the day, because I don't see what is in danger and needs to be saved...
43/ This is becoming a long tweetstorm, so let’s wrap up with a few closing comments.Yay!
44/ Do I have a conflict of interest? ETH is a publicly available asset with no real barriers to entry, so I could easily get a stake. Also, having met Vitalik & other ETH founders several times in 2013-’14, it would have been doable for me to become part of the in-crowd.Agree there. And BTW I generally think financial conflicts of interest are somewhat overrated; social conflicts/tribal biases are the bigger problem much of the time. Though those two kinds of misalignments do frequently overlap and reinforce each other so they're difficult to fully disentangle.
45/ Actually, I was initially excited about Ethereum’s smart contract work - this was before one of its many pivots.Ethereum was never about "smart BTC contracts"..... even "Ethereum as a Mastercoin-style meta-protocol" was intended to be built on top of Primecoin.
Tuur Demeester @TuurDemeester: Ethereum is probably the first programming language I will teach myself - who wouldn't want the ability to program smart BTC contracts?
46/ Also, I have done my share of soul searching about whether I could be suffering from survivor’s bias.Ok, good.
@TuurDemeester I just published “I’m not worried about Bitcoin Unlimited, but I am losing sleep over Ethereum” https://medium.com/p/im-not-worried-about-bitcoin-unlimited-but-i-am-losing-sleep-over-ethereum-b5251c54e66d …
47/ Here’s why Ethereum is dubious to me: rather than creating an open source project & testnet to work on these interesting computer science problems, its founders instead did a securities offering, involving many thousands of clueless retail investors.What do you mean "instead of"? We did create an open source project and testnet! Whether or not ETH is a security is a legal question; seems like SEC people agree it's not: https://www.cnbc.com/2018/06/14/bitcoin-and-ethereum-are-not-securities-but-some-cryptocurrencies-may-be-sec-official-says.html
48/ Investing in the Ethereum ICO was akin to buying shares in a startup that had “invent time travel” as part of its business plan. Imo it was a reckless security offering, and it set the tone for the terrible capital misallocation of the 2017 ICO boom.Nothing in the ethereum roadmap requires time-travel-like technical advancements or anything remotely close to that. Proof: we basically have all the fundamental technical advancements we need at this point.
49/ In my view, Ethereum is the Yahoo of our day - an unscalable “blue chip” cryptocurrency:Got it.
Tuur Demeester @TuurDemeester: 1/ The DotCom bubble shows that the market isn't very good at valuing early stage technology. I'll use Google vs. Yahoo to illustrate.
50/ I’ll close with a few words from Gregory Maxwell from 2016,: https://bitcointalk.org/index.php?topic=1427885.msg14601127#msg14601127 …See my rebuttal to Greg from 2 years ago: https://www.reddit.com/ethereum/comments/4g1bh6/greg_maxwells_critique_of_ethereum_blockchains/
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https://preview.redd.it/nt1qbc9cq4221.png?width=572&format=png&auto=webp&s=d867a4c98e7ab7e9c37c7dc23cc7fb251a5ecec7submitted by turtlecane to burstcoin [link] [comments]
Currently the cryptocurrency space is flooded with copycat coins and initial coin offering (ICO) tokens, most of which are moving steadily down the ranks on CoinMarketCap as the bear market of 2018 continues. This bear market is weeding out cryptocurrencies that have little long term potential, and cryptocurrencies that have strong communities and unique technology are rising to the top. Burstcoin (BURST) is one such cryptocurrency that is rising to the top, like cream in a glass of fresh milk. This is because the Burstcoin community is filled with diehard Cypherpunks, and BURST is the king of Proof of Capacity.
Back in the middle of October 2018 BURST was at #248 on CoinMarketCap, which was before the ‘nuclear’ bear market took effect, where the support level was broken due to the Bitcoin Cash hard fork, Bakkt delaying the launch of physical Bitcoin futures, and the Securities and Exchange Commission (SEC) initiating its first civil enforcement penalties against ICOs. BURST has decreased in price like every other cryptocurrency, but is rising relative to other cryptocurrencies, and as of 3 December 2018 sits at #199 on CoinMarketCap with a market cap of USD 13.5 million.
This increase in the price of BURST relative to other cryptocurrencies is due to Burstcoin’s unique technology. Burstcoin is the king of Proof of Capacity, a mining algorithm that uses the hard drive, versus raw computational power like with Proof of Work, and is much more energy efficient than Proof of Work. Proof of Capacity works by writing cryptographic hashes to an allotted segment of a hard drive called a plot. This plot is then read during mining to find the correct cryptographic hash, and whoever finds the cryptographic hash the fastest receives the block reward. More hard drive space dedicated to the plot equals more cryptographic hashes available, making it easier to find an answer and earn the BURST block reward.
Currently 1TB generates 1-2 BURST per day, and even though this is only equivalent to about a penny, it is all profit since reading the plot file requires a negligible amount of energy, and BURST miners can use their computer for other activities without impediment. Compare this to Proof of Work, which slows down personal computers and costs more electricity than the cryptocurrency it mines. BURST is one of the only cryptocurrencies that can be profitably mined on personal computers.
Further, unlike with Proof of Work where specialized mining equipment is required like application specific integrated circuits (ASICs), anyone with a computer or even mobile phone can mine BURST, and if they decide to stop mining BURST they can simply delete their plot file and use the hard drive space for other things. This is unlike ASICs, which cannot be used for anything but mining, so if someone decides to stop mining they lose all the money invested into the ASIC.
The ease of mining and negligible energy usage has led to the formation of a strong BURST mining community, with over 200,000 TB securing the BURST network. This is equivalent to hundreds of thousands of personal computers. The expansive mining community gives BURST value, and some of these miners are blockchain developers, and they have been building a full suite of technology based on the Burstcoin blockchain.
CloudBurst immutably stores files directly on the Burstcoin blockchain, for a small 1-time fee. Real blockchain storage is a rarity in the cryptocurrency world. The file will be stored as long as the Burstcoin blockchain exists, which is the foreseeable future and beyond considering the expansive BURST mining community. Cloudburst would be useful if you lost your computer and all of your backups in a natural disaster like a hurricane, and is a more secure solution than cloud storage like Google. Also, the Burstcoin wallet can be used to easily issue cryptocurrencies that are based off of the Burstcoin blockchain, and there is a decentralized exchange built-in to the wallet to trade these crypto assets.
Cryptocurrency scalability is a problem even for major cryptocurrencies like Bitcoin and Ethereum, but Burstcoin has tackled and solved this problem with the launch of the Dymaxion. The scalability of the Dymaxion is so powerful that it can handle all the non-cash transactions in the world. This is done via the utilization of tangle-based lightning networks on top of the Burstcoin blockchain. Transactions done via the Dymaxion are instant, with no fees and practically no energy expenditure. The Dymaxion gives Burstcoin the room to grow as much as it needs to.
When people look for the cryptocurrencies that will survive long term, it can be confusing due to the 2,000+ cryptocurrencies listed on CoinMarketCap. However, it is clear that cryptocurrencies with truly unique and useful technology, as well as strong communities will always be around and gain value long term relative to all the ICOs and copycats. Bitcoin is the king of SHA-256, Litecoin is the king of Scrypt, Ethereum is the king of blockchain-based dApps, Dogecoin is the king of the shibes on Reddit, Dash is the King of X11, Monero is the king of privacy coins, IOTA is the king of Directed Acyclic Graphs (DAGs), and Burstcoin is the king of Proof of Capacity. These kings of cryptocurrency will definitely be the winners and survivors when the fallout from the ICO apocalypse is over.
This is for educational purposes only and is not investment advice. We are not paid by BURST to write this article.
**The following essay was written by Eric Hughes and published on March 9, 1993. “A Cypherpunk’s Manifesto” was originally published on activism.net and is reprinted here on Bitcoin.com for historical preservation. The opinions expressed in this article are the author’s own. Bitcoin Cash is an attempt to rescue what the bad actors had hijacked successfully, mainly the peer to peer cash revolution. And it won't be the last time the bad actors will try to find ways to sabotage this project. And we need your help. Bitcoin Cash does not care if you are black, white, Asian, male, female, American, Iranian, Chinese… Further, Bitcoin uses strong cryptography, indicating that the creator of Bitcoin, Satoshi Nakamoto, had a strong desire for privacy. Indeed, Satoshi was an active member of the Cypherpunk mailing list and collaborated with various Cypherpunks to develop Bitcoin. Miner Hoards: Q2 Bitcoin Mining Supply Outflow Touches 12-Month Low Onchain data shows that bitcoin miners are hoarding despite the 50% loss in revenue that started on May 11, during the third “A Cypherpunk’s Manifesto” was originally published on activism.net and is reprinted here on Bitcoin.com for historical preservation. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any opinions, content, accuracy or quality within the historical editorial.**
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