I agree with this in as much as I don't think cryptocurrencies are ever going to replace 'fiat' currency. That doesn't mean that they don't provide economic value or are worthless, however.
It does if you take USA's "governance of Fed Reserve Notes" and EU "governance of Euro" as examples of the author's "governance of technology" or "governance paradox".
Yeah, I was specifically referring to the crypto ideologues who have a fundamental distrust of fiat currency and think that bitcoin somehow solves governance problems. The eth hard fork to protect the investments of developers and early adopters should have disabused people of that notion.
Here's[0] an interesting take on a possible way forward to achieve that, very much inline with the recent ICO trend.
In general I think the token design space is an extremely interesting one, and seeing how different models lead to different social structures and outcomes will be extremely interesting.
Of course this is not new (currently reading Debt: the first 5000 years), its just radically easier than before, to design, deploy, and use. As a result we'll see an explosion of variety, diversity, and competition, which'll be fascinating to see.
Already the differences in ICO mechanisms are extremely interesting, though they have a long way to go.
dollar for dollar, traditional money transfer companies are faster and cheaper.
unless the user is trying to conceal the source of funds or is evading capital controls.
You could claim the blockchain will transform the economy some day, but to claim it has is plainly false. It's still a niche system, and Bitcoin's seeing rapidly rising transaction fees (https://bitinfocharts.com/comparison/bitcoin-transactionfees...) because of the block size issue right now.
One of the reasons there are fees for international payments is to comply with the legal requirements set up by governments to monitor and control such transactions.
The cost of transferring FX wholesale is near zero. If a bitcoin based processor implements the controls, the costs will be the same as a regular payment provider.
So bitcoin can only become cheaper than tradition payments if you bypass the legally required controls.
While you're not wrong, the fees for international payments vary wildly depending on how you do it, which service or bank you use, how much you transfer etc. Which makes it hard to sell the "its about governance" line for justifying those fees.
I agree with Vili Lehdonvirta's analysis about governance and wrote a similar conclusion previously.[1]
Yes, the concept of "money" existed before governments and therefore doesn't require government. That said, today's modern money is very much an instrument of government power. This is why alt-coins will not overthrow fiat currencies like some enthusiasts believe because Bitcoin does not come with its own Bitcoin-police-force and Bitcoin-law-courts.
The distributed block chain may eventually prove useful for other recordkeeping such as real estate property transactions (e.g. no need to pay $300 fee for title searches in the future), or maybe buy/sell internet domain names (e.g. don't need Verisign as middleman to buy dot com domains).
Those scenarios are more realistic than Bitcoin/Ethereum replacing government approved fiat currencies. DLTs may still transform the economy -- but not in the ways people expect.
There's definitely some interesting applications of distributed consensus ledger but the idea of bypassing government money is overhyping its potential.
> Bitcoin does not come with its own Bitcoin-police-force and Bitcoin-law-courts
My government will enforce a contract even if it is denominated in some foreign currency, will it not? Currency used is independent of jurisdiction.
They may award damages in legal tender, rather than in Bitcoin, but I have to pay taxes in legal tender anyway, so there will always be a market to convert back.
Right now they might be confused by Bitcoin enough that they won't effectively be able to assess damages, but that's not necessarily a permanent state of affairs.
>My government will enforce a contract even if it is denominated in some foreign currency, will it not?
Sure, if usage of that other currency is trivial enough volume that it doesn't threaten the government's currency. That's the sticking point. Bitcoin is allowed to exist at the whim of the government.
Since deflationary Bitcoin in no way, shape, or form threatens central bank currency systems, I don’t think existing at the sufferance of central governments is anywhere on the roadmap of problems crypto currencies have.
> My government will enforce a contract even if it is denominated in some foreign currency, will it not?
Usually, the same as it would for a contract for some non-currency commodity: by converting it to what it considers an equivalent value at the time of injury (not time of award or payment) in the legal tender currency.
Sure. But having to convert to pay taxes and debts is huge pain point for trying to conduct all your business in a foreign currency. It also adds transaction costs.
If you are a business, why would you ever try to run on bitcoin alone? There would have to be a huge advantage. And we see that in many small cottage industries where that is an advantage, like buying drugs online or illegal gambling.
But without the need for pseudo-anonymity why would anyone ever use it? Why would your grocery store use bitcoin over dollars? They wouldn't.
So crypto will probably be a currency in the long run, but it won't overthrow regular fiat.
Plus, if there was a huge benefit to crypto, the Fed could just do a crypto dollar and peg it to the real dollar.
> But without the need for pseudo-anonymity why would anyone ever use it? Why would your grocery store use bitcoin over dollars?
Because the want the money from people which have bitcoins? Because creditcard fees are to high? (just forget about the BTC fees or the nearly fictional double spending problem) Another reason could be that the owner has Bitcoins and wants to support them. There might be more reasons.
> But having to convert to pay taxes and debts is huge pain point for trying to conduct all your business in a foreign currency. It also adds transaction costs.
To some extent yes, but for any more serious business this really isn't a problem at all. I've been running a business that makes income in bitcoin only for 5 years now, and converting for taxes and accounting is quite trivial actually. Hardly any work is spent on those problems. You know, that kind of stuff is very trivial to automatize using those computers, unlike many other problems.
So the point is to use the stateless currency, but continue to rely on the state to settle disputes and redistribute funds as it sees fit?
That seems counter to the ethos of the BitCoin enthusiasts.
I also doubt it will necessarily work for large sums. Governments may enforce contracts related to foreign money (if they find that the contract itself is in their jurisdiction, which isn't always the case) because they have quid pro quo agreements with other states, and it is mutually beneficial to global trade if global contracts can be enforced. (In a way, it similar to foreign mail being carried by local postal services.) But there is no quid pro quo with any friendly BitCoin government, so there is no incentive to enforce contracts.
Let's not forget about Blockstack https://blockstack.org . I'm very excited to develop on this platform and it represents the direction the Internet needs to go in order to ensure its longevity. Check out their YouTube channel as the creator has recently posted a slew of micro-lessons to address common questions and concerns.
"Distributed block chains" have been well understood (if not popular) technology for a long time and have not really been that popular. They've been cost-prohibitive until recently.
I'm not sure they will fundamentally change anything either. You're making the same implicit assumption that there is an appetite in the market for a wide but not-quite-real-time distribution mechanism. I submit to you that outside of medical records and other specialist applications, there isn't.
As for the currencies, when they are backed by the promise of more energy as opposed to backed by the promise of spent energy I'll find that more interesting. I see the big weakness of Bitcoin being that it exists as it does only so long as the majority of computing power within it does not hijack it.
But isn't that power just shifted to an elite who controls the great majority of the currency, and has the power to withdraw/dump coins (basicaly influencing the supply side of the market, and control the value)?
I'm pretty sure there are people/organizations who invested into such positions.
Isn't that a sort of control that may be worst then government power?
> the concept of "money" existed before governments
This is not actually true. The concept of money (quantifiable debt in a standard unit, such as coinage) was created by early states to lock subjects into what anthropologist David Graeber has called the "military–coinage–slave complex". Money cannot be separated from state violence.
That said, we'd need to agree on definitions of "state" here. Some kinds of money surely existed before anything recognizable as a "state", but then again, such notions of money are likely as meaningless as this kind of unrecognizable state.
>Some kinds of money surely existed before anything recognizable as a "state"
I wouldn't be so sure. As far as I know, current academic consensus is that in primitive societies, where everyone knows everyone, it comes down to a system of favors and everyones natural sense of what's "fair". These are relatively small groups of people, so there's a lot of trust involved. No need for any sort of currency there
>anthropologist David Graeber [...] Money cannot be separated from state violence.
I've read David Graeber's book. I do agree with him that the common (e.g. John Locke) narrative about money arising from direct barter is probably wrong. Money actually comes from credits/debits (aka delayed consumption).
However, I disagree you need government enforced violence for the basic apparatus of money. Perhaps it's a matter of defining "money" in different ways. I'm talking about "money" as a more basic expression of human bookkeeping.
If you have a small community where everybody knows each other, the people can cooperate to keep track of "accounts" of who owes what. They can write the debts/credits on a public church ledger or hypothetically leave it to the reliable memory of a trusted village elder. (E.g. you don't need government for women to spontaneously start trading scrips for future babysitting hours.) What governments enable is scalability.
With government standardized money, strangers can transact the units of account across a larger administrative area.
>If you have a small community where everybody knows each other, the people can cooperate to keep track of "accounts" of who owes what.
Well, those people are then the government. In small scale communities it's one and the same -- they can all join together and deal with anybody who doesn't play nice. And these punishments are the analogous of e.g. prison.
So, what you say is true, but not very important in practical use, as we don't live in such small communities, and don't deal strictly in our own community even.
Sure, 2 people also don't need government. They can keep tabs, and if one doesn't repay or cheats, the other can always beat them up or stop dealing with the first. But they're basically acting as a government in themselves (in that they assume the role of government officials like law enforcement, law-making, etc).
"Government is not required" would made actual practical sense if somehow the technical solution used instead of money took care itself of debt repayment and ensured punishment (or make it so that punishment is redundant) of wrongdoers.
Right, that's today's situation. My "government not required" is talking about how ancient money can arise spontaneously without a separate entity that we think of today as "government". If we think of "money" at its basic level of keeping track of "promises", "favors", and "trust" ... all those human instincts of coordination can precede old governments like the Roman Empire and Egyptian pharaohs. It just can't do so on a large scale among strangers.
>2 people [...] they're basically acting as a government in themselves
If we go back & forth by then redefining "government" to mean "any humans coordinating" then I suppose we could stretch "governance" all the way back to human invention of fire. If we use this all-encompassing idea of "government", then I suppose it means nothing preceded government.
>If we go back & forth by then redefining "government" to mean "any humans coordinating" then I suppose we could stretch "governance" all the way back to human invention of fire.
And what would be strange about that? I see no reason to constrain government to only mean the modern(-ish) state. Ancient Rome was also a government, Babylonians had kings, jungle tribes had rulers and elders, etc etc.
I'd say any human community had a governance structure way into prehistory.
>If we use this all-encompassing idea of "government", then I suppose it means nothing preceded government.
Yes -- but I don't find that strange. What would precede government? If there was anything, it would more like primate animals living in packs akin to animals, but with no other structure in their "communities". As soon as some structure emerges, they also need ways to decide what they do, assign responsibilities, punish bad behavior, etc.
> In the UK it costs £3 and is searchable online.
If it costs $300 then
My short text didn't give enough context. In the USA, that $$$ isn't really for the "search"; it's to pay for the "title insurance". That title company insures that the buyer is getting a "clean title" with no conflicting claims of ownership from others he doesn't know about. The "search" is just one component of labor of what you're paying for. (I looked at my mortgage documents again and my title insurance actually cost $4000.)
With a distributed ledger for property deeds and title transfers, that was used by say -- 1 million people -- that essentially means you have 1 million "witnesses" to the transactions. Therefore "title insurance" becomes superfluous.
I'm not predicting that DLT would be used for property records but proposing that hypothetical scenario as something more realistic than bitcoin replacing the Euro/USD.
If "dirty" titles are an issue (and title insurance costing $300 suggests it is), Why is there no government department (state or federal) holding the title registry?
That would also solve the problem. Once again it seems like this is a social issue not a technical issue.
>Why is there no government department (state or federal) holding the title registry?
The governments (e.g. county courthouses) do store copies of the documents such as deeds and transfers. They stamp them with their seal so in that sense, they do "hold the authoritative title records".
However, there is no computer database with rows for all real estate that has a binary column called "CLEAN_TITLE" with values TRUE/FALSE.
Therefore, the actual state of a "clean title" isn't a flag but a case-by-case determination based on documents analysis. What an employee from a title company will often do is actually drive down to the court house and sit there looking through document archives to trace the chain of sales. This also includes looking at microfiche films[1] if the courthouse hasn't migrated all their images to electronic image databases. If the worker feels confident there are no outstanding claims, the title company can issue "insurance" that the title is clean. (Occasionally, the determination was wrong and the title company has to pay out the insurance because of their mistake.)
If the property gets sold again, another title company worker may do the same redundant "documents analysis". (Because new claims can be recorded against the deed since the last time the property was sold.) Yes, it's a really inefficient process!
Conceivably, a buyer could buy property without title insurance but since most people require loans, a bank won't lend money unless it has assurance the title is clean (because that property is the bank's collateral so it has to have confidence that nobody else has claims that supersedes the bank's.)
Could the governments create a convenient centralized database to solve those issues? Yes. But some people might prefer to have a distributed ledger to bypass the government holding those records. (E.g. the courthouse charges $20 to "record deed documents" or "$1 per page for copies of deeds", etc). The distributed ledger could theoretically not require those fees or make them very small.
The fundamental question is "why is it easier to get everyone to agree to put their real estate transactions in a distributed ledger than in a centralized ledger?"
I tried to explain that in the last paragraph. Some people might want the features of distributed ledger such as less transaction costs and/or convenience of recording property transfers without requiring without filing papers with the government. Or the decentralized ledger assures public immutable records whereas with the central db, you have to trust there won't be a malicious government employee changing database data to fake ownership records.
Sure, in a limited sense... every distributed ledger use case can be replaced with a centralized database. The reason people would choose a distributed solution is to bypass the controls of the centralized authority. Similar reasons that bitcoin proponents prefer it over centralized fiat government currency.
Whether those distributed reasons are cost-effective or sensible remains to be seen. Who knows, maybe distributed ledgers will become so mainstream that it will be the county governments themselves that seed the real estate blockchain so they don't have to bother administering a central db.
(To be clear, I'm not trying to convince anyone of switching to distributed ledgers but laying out possible use cases.)
How is a distributed ledger different from the centralized ledgers that many US states use?
Normally, to verify ownership, each transaction is reviewed to verify that they follow a direct chain back to the property's origin.
Compare that to a blockchain, where an algorithm which all involved parties must agree to, traces ownership through each transaction involving the property back to its origin.
Both have situations that result in conflicts that have to be resolved, whether by algorithm or in a court room.
The economic benefit of mostly automating governance is huge. Large financial institutions push so much through COBOL/DB2 on mainframes. The cost of updates to the contracts is horrid and mostly manual taking months if not years. The biggest loser is IBM and it's largest z/OS clients.
I was having a similar conversation with a colleague given about 3-rd party enforcement. The news that a Jaxx wallet user had $400,000 in Bitcoin stolen just came out. [1] Who do you turn to reverse that? There's no one really. I'm not sure DLT's are mature enough for serious global investment yet.
So the worry is that you need govt courts and police to enforce rules? That's not a great argument. The number of private police today is far greater than govt employed ones. Most international trade disputes are settled by private arbitration and not the govt courts.
What's the real worry?
The problem is that at the point where there is a trusted party to arbitrate disputes why do you need a blockchain? It seems ironic that it seems like we need some trusted governance over a system that is literally built upon the idea of distributed trust.
He misses the point that the developers do not control bitcoin; the miners control bitcoin. The developers suggest improvements which will only be adopted if the miners support those improvements.
The miner's interests are purely profit based, so they will not adopt changes which reduce their chance of profit.
Thank you for pointing out that the users of bitcoin (and other cryptocurrencies) have effectively no say in the design of the system they have to trust. This will ultimately limit the very trust needed to keep it alive IMHO.
I would say that this is exactly why Proof of Stake seems to be in higher regard than Proof of Work for new currencies as well as Ether's eventual transition later this year. Among other reasons, of course.
Ethereum has a difficulty bomb (mining becomes more difficult with time). This is a form of control from developers over blockchain. If miners refuse to cooperate, they are left with the blockchain which is more difficult to mine with time (and eventually unusable).
It won't be like SegWit/Unlimited. The politics are very different and the technology is very different.
1. Politics. Ethereum has a leadership team which functions very differently from Bitcoin Core. For one, the creator of Ethereum is well known and outspoken. He and the other members of the Ethereum Foundation made it clear that their intention was always to move to Proof of Stake. Though there are some who may not support this move, the general community bought into the project knowing that this was the plan from the beginning. And there's a lot of trust of Vitalik.
2. Technology. Ethereum adapts much more quickly to mining difficulty than Bitcoin. Bitcoin can't survive with 90% of the hash power on one chain and 10% of the hash power on another chain. The smaller chain would take 10 hours to mine a single block and months to readjust the difficulty. It would be unusable. Ethereum has already shown its resiliency to a split during the DAO hard fork. The smaller chain adjusted quickly and survived. What this might mean is that with the change to PoS, there could be a dissenting faction that remains on PoW, and both chains will survive. This will allow the PoS chain to go ahead and push through with a split easily even without 100% support.
> how is that any different to the existing currency system
Fiat currency is governed by central banks, which are arms of government, and are accountable to the public in the same way as the issuing government. Obviously, the degree of accountability varies from government to government.
The UK wasn't in the Eurozone - and I've been reading Yanis Varoufakis's books about his time as the finance minister of Greece and I've been fairly shocked at how fundamentally undemocratic (not to say unreasonable) a lot of EU institutions and the likes of the IMF are.
And I say that as someone who voted Remain in the Brexit referendum (note that Varoufakis actually campaigned on the Remain side in the UK).
ECB is an arm of the EU (a government, but not a nation-state) accountable, as I understand it, through the European Parliament primarily and secondarily through the Council; and it is also accountable to the people of Eurozone countries through the accountability processes of their individual central banks, since the national central bank chiefs are governors of the ECB.
That is a pretty loose definition of accountability. If your bank screws around, are you going fix it by voting for a different candidate in the next election? I would say that my ability to purchase and run mining hardware, at a loss if necessary, gives me more control over my altcoins than my citizenship gives me over my bank.
> I would say that my ability to purchase and run mining hardware, at a loss if necessary, gives me more control over my altcoins than my citizenship gives me over my bank.
It's roughly similar to buying shares in a publicly-traded bank, which you can do as well as electing candidates for public office to whom the central bank, which is the entity making monetary policy decisions, is accountable.
So it gives you more relative power with altcoins only to the extent that those with more wealth are relatively uninterested in the altcoins in question compared to traditional banking; were a digital currency to succeed beyond a small niche, that would change and you would find yourself as drowned out by moneyed interests as you are in traditional banking on that avenue of leverage, and without the other avenues of accountability that exist with the governance of fiat currencies.
> It's roughly similar to buying shares in a publicly-traded bank
i dont believe that even owning a bank could you directly control monetary policy or procedures that the gov't legislates. You'd have to own either the majority of all banks, or own the gov't yourself (i.e., dictatorship), and even then, it's a hardsell.
Depends on how you define 'users'. Miners don't just make money out of thin air; they actually help maintain the ledger and provide value to the 'users'. Nobody is stopping you from start doing it yourself, too.
This is an excessively simplistic first-order explanation of the mining incentive system.
Consider that miners also lose money if the thing they are mining loses value. Therefore, if enough economic actors (besides miners) switch to version B that has some new feature, everyone will want to use version B instead of version A. The miners who are stuck mining version A lose money because the currency they're mining is no longer as valuable.
Realistically, the economics of cryptocurrency features work out quite nicely. You can't just say "oh, the miners make the blocks, so they have absolute control".
Incorrect, I can sign or construct any type of cryptographic payment I wish. Miners trade their Proof of work to prevent double spends in exchange for coinbase (currency issuance) that the market values. If miners chose to mine on a chain that no one wants, no one will trade for their coinbase.
The game theory nuance is, how do you organize an economy around changes to blockchain consensus? The only guaranteed way to ensure that that happens (from a game theory perspective) is to have miners lead the change. If user wish to lead the change, they still can but they take a risk in that no one will join them on the new consensus chain ("hey you guys said you'd construct payments like this and now no one is!"). There are more improved ways of rolling out these changes.
At worst miners can execute a denial of service for new transactions entering into the UTXO or attempt to double spend funds, or release blocks in a manner that negatively affects the profitability of other miners but they have _no control_ over how users handle their UTXO.
Bitcoin is anti fragile, each time it goes through a market challenger it gets better at handling it, not weaker.
If miners chose to mine on a chain that no-one wants, they'll run into losses. Users will probably move to some other chain.
As an example: Bitcoin users might wanna switch to Litecoin. And guess what miners will do then ?
You're also referring to a major weakness in the distributed consensus of bitcoin: the longest-chain-preferred mechanism is almost certainly a vector of attack on the chain.
Wouldn't you need to have a majority of the hash power to fork the chain and generate a longer one anyway? I think it's well understood that anybody managing to go above 50% of the hash capacity effectively "rules" the currency.
This is a common response to this but I don't think it's true in every case. I think if your goal is strictly to disrupt the Bitcoin service you can accomplish that by disrupting and attacking individual nodes in parallel and letting the resulting chaos from these cheaper attacks widen the scope of your disruption, stepwise.
If by strength you mean, "A clear methodology from which a sufficiently large ec2 buy can rapidly fragment the Bitcoin consensus" then yes, I suppose that's fantastic.
From the perspective of people transacting on Bitcoin's infrastructure I suspect they'd call it "an attack."
>a sufficiently large ec2 buy can rapidly fragment the Bitcoin consensus
You grossly underestimate the hashing capacity of the bitcoin network. The hashing capacity, at time of posting, is approximately 5,000,000,000 Gigahashes/second[1]. Spot measurement of the hashing capacity of an EC2 instance is 0.4 Gigahashes/second[2]. You would need 12 BILLION EC2 instances to 51% attack the bitcoin network.[3] Using EC2 to attack the network is impractical and inefficient.
In the OP, the author says there are "approximately 5,000 computers" in the bitcoin network. I'm curious if you believe this is right too? Those are some powerful computers... (yes, "duh" indeed, I'm still awed).
That could very well be true. All mining for BTC is done via ASICs now, specialized silicon that just hashes crazy fast, but can't even get a TCP connection up and running. For networking, a bunch of ASIC chips is typically connected to some embedded computer, and even that usually isn't a direct peer on the Bitcoin network, but only connected to a mining pool server with hundreds of other such ASIC controllers. And this server then is the first actual part of the Bitcoin p2p network, single-handedly representing a mind-boggling multi-Megawatt hash power infrastructure.
Even most BTC users do not run actual clients anymore but use exchanges or wallet services which bundle huge numbers of users behind few actual Bitcoin network nodes.
I'm happy to be wrong, but I feel like I don't have to overcome the entire network's hashing, I need to overcome several individual instances. If I could isolate and attack individual members of the cluster quickly, I could begin to leverage their role in the cluster as they join, convinced that a single block must be true.
I don't need to overcome the network, I need to invite the network to have arguments with itself, by finding a way to introduce widespread partitioning of the network.
In this, the preference to longer hash chains seems like a good idea in a unified clock model but a somewhat optimistic decision in a split clock world.
>If I could isolate and attack individual members of the cluster quickly, I could begin to leverage their role in the cluster as they join, convinced that a single block must be true.
To do this you would need to have the equivalent hashing power of the network. Peers expect an nominally equivalent amount of Proof of Work for the difficulty adjustment. You would also need to guarantee that the peer connects to _no other_ peers
Your thinking is good adversarial thinking but it's already covered in the protocol.
>If miners chose to mine on a chain that no-one wants, then everybody has to grudgingly go along with it
No, if the miners mine on a chain that doesn't meet consensus rules, users will not follow it. If miners decide that the coinbase issuance schedule isn't to their liking, and decide to revert it back to 50 bitcoins per block, users will reject those blocks. This is a fundamental governance property of a blockchain.
But the problem is that soft forks can do basically anything. Yes, even increase the block reward, in a roundabout way, (by using added extension blocks that have special rules, and then requiring all transactions to go through the extension blocks.)
Although from the perspective of a non-conforming Node, this would just look like a DDOS style mining empty blocks attack.
At this point the only thing that users can do is change the Proof of Work algorithm. .... But, if the big players in mining have a bunch of GPUs on standby... well, it is not even guaranteed that this will work.
Only the longest chain that users consider legitimate. If users reach consensus on using rules that have lower transaction costs, it won't matter how long miners mine their higher transaction cost chain.
The big question is: can users achieve such consensus politically, or in practice do the miners lead the users because they need less organization to do so?
Plain 'nodes' weren't even a thing back in the early days of bitcoin. The original design envisaged all participants to be miners. It was only when mining became out of reach of ordinary computers that people started running nodes. They do very little, just sending and receiving bitcoin transactions, a task which the miners could do just as well by themselves.
Nodes have no say in consensus, the miners can ignore them and decide which transactions they want to include. All a node can do about it is complain to itself.
> Satoshi from the Bitcoin white-paper chapter 12 'Conclusion' : The network is robust in its unstructured simplicity. Nodes work all at once with little coordination. They do not need to be identified, since messages are not routed to any particular place and only need to be delivered on a best effort basis. Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone. They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.
First, you have to understand what 'consensus' actually means :
> A fundamental problem in distributed computing and multi-agent systems is to achieve overall system reliability in the presence of a number of faulty processes. This often requires processes to agree on some data value that is needed during computation. Examples of applications of consensus include whether to commit a transaction to a database (or, for example, committing blocks to a blockchain), agreeing on the identity of a leader, state machine replication, and atomic broadcasts. The real world applications include clock synchronization, PageRank, opinion formation, smart power grids, state estimation, control of UAVs, load balancing and others.
Nodes are the agents in a multi-agent system enforcing consensus.
Nodes accept incoming transactions and validate them. Miners don't. Nodes replicate transactions to other nodes. Miners don't. Miners take transactions from nodes, and order them in a block, and perform a hashing function on them (the only thing they do). Miners pass the new block to the node. The node validates the transactions in the block. Miners don't. The node validates the block. Miners don't. The node replicates the block to other nodes. Miners don't.
There is only one function that miners do. They take transactions, put them in a block, and hash them. As soon as a miner produces a block that any node determines does not obey consensus rules, it is rejected. It doesn't even matter if another node has already accepted, because consensus is aligned with all nodes. Any node that replicates non-consensus blocks or transactions is itself rejected.
So nodes accept the transactions, validate the transactions, replicate the transactions, maintain the mempools, validate the blocks, replicate the blocks, serve the blockchain, and store the blockchain. Nodes even define the PoW algorithm that miners have to employ.
Nodes maintain the protocol, not miners. It is thus. It has always been thus.
> A full node is a program that fully validates transactions and blocks. Almost all full nodes also help the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then relaying them to further full nodes.
You should probably question how such a fundamental misunderstanding of how bitcoin works comes about. Is there a source for your opinion?
I don't see how this is a good thing? If what you are describing is true, it ends in those rich enough to buy the majority of nodes in the network, being able to control the entire blockchain. Pay-for-power doesn't seem like a good solution for governance.
Because bottom line, the only thing it improves is that there is no longer need to move the money around in armored cars, and that is not high impact in the bottomline of the economy
You lose the following:
1 - Ability control monetary policy
2 - Reduction in theft via cost in effort (same thing as with e-voting and rigging elections)
Because of that you have seen that blockchain stuff works on countries where 1 is badly handled. everywhere else nobody really cares except for the hype.
It's also convenient for purchasing illegal stuff instead of having to go trough stuff like western union (if you think BTC fees are huge I have a surprise for you). Surprisingly acquiring bitcoin was the hardest part of acquiring controlled substances (coinbase transaction failed twice with my credit card and had a tedious registration process requiring photo, scan of ID, etc. etc. - ended up buying from localbitcoin using bank transfer but it felt risky and the markup was considerable) - the rest was as simple as using a online shop and it shipping to home address - even got free shipping for a bigger order :)
I think for the libertarian crowd (which seems to be a big chunk of the bitcoin enthusiasts out there as far as I can tell) the fact that a government can't easily enforce any kind of monetary policy on bitcoin is a feature, not a bug.
I always thought of bitcoin as a commodity, not a currency. It seems to solve the same problems and follow the same rules. E.g.: a commodity (such as gold) can not be created, but it is an important feature for a currency. Without inflation it will never be a good choice for currency anyways because it will always be a more interesting to hold on it rather than use it.
If bitcoin achieved (a big if) wide adoption, it would be like keeping all your money in an index fund whenever you're not actively spending it. Its value would follow the growing economy.
Except deflation instead of inflation. Instead of sticky wages you'll be pressured to drop your hourly rates. Borrowing money would increase the cost of the loan, depending on the rate of value increase, you're looking at negative interest rates. Everything about deflation makes zero sense.
You've identified who suffers and who benefits from the reversing of value positions caused by deflation vs inflation.
But you haven't explained why its "worse"? So borrowers are disadvantaged compared to lenders (savers).
And wage earners are in a better position relative to wage payers.. ? That's what I take away from your statement.
But, one's ability to buy things seems to be improved...
Should we want an inflationary economy more college-tuition, healthcare-cost-like... or computing & software-like? Continually falling prices for all things computing related have done wonders for that industry no?
Would consumers be better or worse off having to spend less on food clothing housing energy? Would they have more or less disposable income with flat or falling prices?
Ok now assume increases in those costs... better or worse off? More or less disposable income?
> But, one's ability to buy things seems to be improved...
It's only improved if there is a lot of investment and new / more products coming out. deflationary currency promotes holding on to your money so that it goes up in value, but if everyone does that there will be less products / services and the value of the currency will ultimately go down. If currency has some inflation, then it's used as a transaction currency so that you want goods rather than currency, so the product becomes the important thing. If you have too much inflation however you get way too much money for the amount of products, so you want stable inflation.
Won't interest rates be low if everyone is saving?
Won't there be more investible cash because a lower percentage of one's wages is devoted to commodities, and essentials? As well, there is less of an incentive to stockpile or "get ahead" of future price increases.
So.. more left over to invest?
Does expectation of future flat or lower prices give you confidence to plan a vacation, invest extra money, etc.. or would you prefer to worry about food, gas, and other prices going up in the future? (along with your sticky wages making your real wage go down)
In fact, I 100% agree that savings and investment are key to future growth, technology and the whole enchilada. Which is why I don't support stealth tax of inflation, or of governments debasing the currency and stealing wealth from citizens.
Can you clarify why this is the case? This seems to just describe inflation as if it is a net gain, meaning you wouldn't actually realize gains because the aggregate of goods you buy would increase proportionally.
> it would be like keeping all your money in an index fund whenever you're not actively spending it
But without even the pretense of funding businesses and actually participating in the economy. Your money can grow on hot air and wishes alone! Why don't we give all people some bitcoin, so everyone can grow richer and richer without doing anything.
There's plenty of hot air and wishes behind regular currency as well.
I have a plan to double the US GDP in one year:
1. I'll pay you $1 million to sing a song for me.
2. You pay somebody else $1 million to sing a song for you.
3. Continue doing this for n turns.
4. The last person pays me $1 million to sing them a song.
The US GDP is around $20 trillion. That means we only need to set n to 20 million and we now have a $40 trillion economy.
The premise itself is fiction. The P in GDP doesn't stand for exchange or transaction. It stands for "Product." It measures the net amount of new wealth, not how many times existing wealth is transferred among parties. If I sing you a song and you pay me $1 million dollars and this process continues back and forth, the net amount of value when we stop is still $1 million and the net change to GDP is zero.
People indulge a lot of strange and wrong ideas about economics and, not surprisingly, those bad ideas are typically well aligned with their preferred world views.
...with no more veracity than your hypothetical. You don't understand what GDP measures. You've allowed yourself to believe that the economists involved are naive. You are correct, however, that this sort of bad thinking is common. Very common.
If I find a shiny rock and sell it to you for $100 and you find a fossil and sell it to me for $100, that's $200 added to the GDP. If we trade rather than pay each other, then it's $0 added to GDP. The same goes for services. If I mow your lawn, paint your house, hypnotize you to quit smoking, or sing you a song - all of those things (are included in GDP.
When you pay for entertainment it's 100% included in GDP the same way as when you pay for somebody to inspect your car.
Like it or not: Gold is money. And Bitcoin even works better as money. And of course it is used at some point. It just doesn't need to be invested into the economy to increase value. So theris an alternative to betting in the pyramid of debt.
Gold is a commodity, it can (and was) used as a currency but not as a very good one. For a good useful currency it has to have a stable price (this is why some countries prefer to use other countries money rather their own). It also has to be widely accepted. Gold is not very liquid nowadays, if I come to a car seller and throw a gold bar at them, I will most probably not get a car.
But I think the real barrier to adoption is that most people don't mind using centralized systems. If their Visa card works when they swipe it, they don't think beyond that. If it's easier for the end user when systems are centralized, breaking people out of this mindset will be very difficult.
I'm fairly pro privacy, but where it comes to currency, I don't see the benefit.
I certainly don't see the benefit of burning the amount of energy the average bitcoin transaction is now responsible for, when (as you say) I have Visa.
And with Visa I can charge-back if I get ripped off. Bitcoin is, AFAICT an actively worse proposition for me.
the article is spot on when it comes to Distributed Ledger Technology (DLT) but misses the point of Bitcoin.
Many in the community cite the lack of governance as a strength of Bitcoin. It's resilience is a virture because it becomes difficult to corrupt, unlike centralized governance of traditional payment methods.
I think you might have missed the point of the article - bitcoin is still governed by a small group of people, but its governance is informal and chaotic.
> Many in the community cite the lack of governance as a strength of Bitcoin.
Bitcoin has opaque governance; it does not have a lack of governance.
> It's resilience is a virture because it becomes difficult to corrupt
It is not at all difficult to corrupt. (Arguably, since it's fundamentally based on “them what have they gold, make the rules”, it's foundationally corrupt and takes nothing additional to corrupt. But, in any case, all it takes to corrupt it is will and money.)
I think that the core value crypocurrencies and blockchains provide is a distributed system of trust. I also think that we people in developed nations have been spoiled by our trustworthy institutions, relatively speaking. I don't know too many people in US/UK/AUS/JP hesitant to put money away in the consumer banks, take out mortgages, or file disputes in the state courts. Those systems work well enough, with acceptable speeds for most use cases.
While crypto technologies are improving, they have some glaring drawbacks:
- The recent BTC confirmation time (transaction processing duration) was in days[1].
- The consumer loses significant protections because transactions are final.
- On a broader note, no centralized controls or responsible entities means no one to point fingers at when something goes wrong.
- There are very steep learning curves for all participating parties.
These are all being worked on through technology improvements and new blockchains, but they're still issues that prevent blockchains from displacing existing systems. I think they could one day change everything in an Innovator's Dilemma fashion, but not anytime soon (5-20 years). There is already staunch opposition to using clearly superior technologies due to cultural factors, for example:
- Americans won't use chip readers partly because the magnetic strip was already widespread[2].
- Developed nations don't use mobile chat operating systems such as WeChat partly because they already had laptops[3].
So in the case of blockchains, not only is there an overwhelming opposing cultural force, but also they happen to make inroads in sensitive industries such as finance/contracts, and the technology is not superior on many levels. This would make adoption very difficult.
Where it will work
However, some people don't have such great institutions. Look at how successful BTC has been in turmoil-ridden South American nations such as Venezuela and Argentina[3]. The inflation is out of control, and consumers don't trust any of the banks or institutions. In this environment, the blockchain is leaps and bounds better than anything else that these consumers have access to, so it's immensely valuable. You'd be willing to wait several days for transaction clearance. You wouldn't care that the transfer is final. You'll do whatever awkward dance it takes to operate and secure a Bitcoin wallet. There's no better alternative, and financial asset security is important.
I think characteristics of an ideal market for blockchain technology today could be:
- Very low trust among participants.
- No trusted central authority.
- Expensive, long, or nonexistent arbitration cycles.
- High transaction costs.
Its most compelling value is the provision of trust where there is none. An example where this might work well is in the specification and mediation of international contracts for small businesses. There is currently little accountability after getting burned in an international transaction with a small entity, as a small entity. If there were a standard trusted registry of company reputation, transaction histories, and contracts, then it could go a long way to building systems of trust that enable more fluid trade afar.
The "Look at the popularity of Bitcoin in [country]" argument always turns out to be made-up rubbish.
I did actually try tracking the Venezuela hype to its source. You have linked the Reason article as a reference, but if you actually read the thing, its title is "The Secret, Dangerous World of Venezuelan Bitcoin Mining: How cryptocurrency is turning socialism against itself" and the article itself is an unhinged libertarian polemic fiercely advocating Bitcoin as a way to avert the SPECTRE of SOCIALISM and REGULATION. One of their interviewees had been arrested for stealing electricity to mine bitcoins, which the author describes as a "government crackdown" on "freedom" because "bitcoin mining is arguably the best possible use of electricity in Venezuela".
A story in The Guardian in the wake of the Reason story appears to be where the rest of the press picked it up. It spoke of some Venezuelans relying on Bitcoin for "basic necessities" - and was based on interviews with a Bitcoin exchange owner, one of his employees and two of his customers. The author had previously written similar stories of Argentina and bitcoin. https://www.theguardian.com/technology/2016/dec/16/venezuela...
These two questionably-founded stories were echoed and elaborated upon by the rest of the press, including - amongst many others - the Washington Post claiming that Bitcoin mining is "big business" in Venezuela (which it in no way is), the New York Times claiming that Bitcoin has "gained prominence" because of Venezuela, and BBC News repeating claims from a Bitcoin boosterism blog - all of this being factoids repeated in a media game of telephone.
The Venezuelan volume on LocalBitcoins at the time was on the order of 300-400 BTC/week, which isn't nothing, but is negligible in the context of a whole country, and tracked fairly closely with LocalBitcoins usage in other countries.
Thank you for your research into this! I found it difficult to locate good sources too, and that fact is worthy of more disclaimer than I gave. I think you're right in giving any claimed causality in new territory a good hard knock.
The rate of usage growth could give more insights than just current volumes:
> It could indeed be just a blip, but would you agree that there exist reasonable incentives for usage of DLTs in unstable economies?
tl;dr no. Cryptocurrencies (we're not talking about the general euphemism "DLT", your question is about cryptocurrencies and specifically Bitcoin) don't solve any of the problems people have in that situation. When every story about "Bitcoin in [troubled country]" has turned out to be made-up rubbish, this leads me to consider all such claims wishful thinking on the part of holders.
I'm writing a book on Bitcoin/blockchain https://davidgerard.co.uk/blockchain/ and have taken to researching Bitcoin/blockchain stories that make it to mainstream media - because this is what ordinary people hear about it - and tracing them to their sources, because far too much of what I'm trying to use as sources just doesn't check out.
In almost all cases they're complete BS started by Bitcoin/blockchain promoters. Every "Bitcoin adoption in xxx" story is rubbish. Most corporate blockchain adoption stories are rehashed press releases, usually from IBM.
Blockchain marketers consistently claim some prominent company "is using" a blockchain when there’s just been a press release that they are "investigating" running a future trial. This is because an "investigation" is cheap, and telling Beleaguered Bob in the office to look into this "blockchain" stuff is worth the PR value in showing you're fully up to date with current buzzwords. "Researching the opportunities" could mean anything, but pretty much always does mean nothing.
If you see a use case that catches your attention, a web search on the company names and the word "blockchain" will often track down the original press release. Check very carefully which details are clearly substantiated in the present tense, and which are (what's a good word) aspirational.
Journalists who bother actually picking up the phone and talking to people, e.g. Izabella Kaminska at FT, get a barrage of personal abuse from Bitcoin advocates, whose social skills really haven't gotten any better in the past several years.
The Bitcoin press is possibly even worse - it pretends to be news coverage, but it's actually advocacy blogs posting any boosterism that crosses their path, because what their readers want is reassurance that this is the future and their holding will go TO THE MOON. The best of them is probably CoinDesk, and even they've never seen an unreleased hype they didn't like and run an enthusiastic article on. The mainstream press keep assuming all this is specialist coverage that's done with journalistic intent (rather than advocacy from holders) and copy'n'pasting it.
Even when the Bitcoin blogs are trying to do real news, they're inexcusably sloppy, and you really do have to check every factual claim individually.
He's missing the big picture. The revolutionary aspect of blockchain isn't about any single currency. It's about the concept itself. Blockchains will be governed independently, but the conglomeration of blockchains as a whole cannot be governed.
Well, there are some improvements over existing systems (e.g. fiat money):
1. Less costs to switch to a competitor comparing to banks and states which leads to
2. The governance body and all influential members are really in need of public approval of their actions since that is exactly what makes a coin worthy. If they change protocol in a drastic way, the price will immediately plummet leaving them in tatters
3. Same mechanism prevents conflicts within the community
In general I would like to see more about the role of law in economics and possible tech implementations of it (meta-protocols?)
If we're talking about "mass" adoption, which suggests consumer-level adoption?
Point #1 is exactly not what you want. It means your currency can lose value almost instantly. Fiat currencies can do this, but only rarely actually do.
TLDR
Author thinks Bitcoin is mostly worthless because there is no single organization deciding how Bitcoin should work or enforcing its rules.
And ironically, most Bitcoiners believe this is exactly what gives Bitcoin its worth.
Sidenote: I also find it ironic that the author, a Faculty Fellow of the Alan Turing Institute, is enamored with governance when it was governance that forced Alan Turing to be chemically castrated.
What this article is missing is the word "decouple". Cryptocurrencies decouple the many roles that are involved in maintaining and using a currency. It doesn't "solve" governance issues, it breaks them into smaller issues that can be (and should be) tackled in isolation.
Anyone who doesn't see this and argues "we should just go back to the way we were doing things before" is missing the point.
I don't understand why "competition" should not work? Switching currencies is easier than switching citizenship. There are plenty of alternative cryptocurrencies with different rules. User can switch to different ones (and Ethereum is quite a challenger at the moment).
The network effects are great, because otherwise everything would explode into a million different currencies.
Currencies need to have systems in place that work to make them stable and preserve value, otherwise they're just tools for transactions.
This might be a better state of affairs if currencies are backed by something exchangeable (e.g., joules of carbon neutral energy, etc...). We don't have many currencies like that in the world, as I understand it. Most are essentially contracts between governments that may or may not end in violence.
Right now it is true that there are a variety of cryptocurrencies, but I think the authors' point is valid that, due to network effects, in the future competition will be harder as existing players become more entrenched (no matter how flawed they may be).
Interestingly, the way things are right now, when it comes to governance model on a global scale, the Big Bad Banks are more decentralized than Bitcoin or any other crypto currency.
Even if it weren't so, I still don't get why total decentralization is an absolute good thing.
Nature seems to be a symbiosis between centralized and decentralized systems - at every level; extremes (too much or too little centralization) will lead to isolation/extinction or explosion/implosion - think biological systems or stars in galaxies.
I disagree with my crypto anarchist friends who believe that changing the money system will change society (eg. society is a function of money) and I tend to think that the relationship is more symbiotic - society has to change in order for the money to take other roles.
Even so, given human nature, it is not clear if a totally decentralized monetary system is a good thing for society as a whole.
People trust 'authorities' more than they trust math written by a bunch of 'core' devs and that's because the former can easily apply brute force and coerce the latter. Yes, we're still primates and the bigger/stronger argument is still valid.
So I don't think Bitcoin will dramatically change society, but some form of symbiosis between the current banking system and the crypto currencies will emerge eventually - and then we can talk about centralization at a whole different level. Either way, there's no escaping it.
DLTs are inefficient by design. The energy consumption is unsustainable with the technology as it stands. For example Bitcoin consumed an estimated 40 million KWh in the past 24 hours - 137KWh per transaction. Enough to power ~1.3M American homes. Many of the alt-coins are even worse.
The more important point is that VISA is broken by design. Every day hackers steal credit card info and leech millions from the system, which is included in the fee you pay. The only reason it keeps working is because hackers aren't sufficiently sophisticated yet.
The solution, of course, is to store a private key on a hardware device, not have the private key be 16+3 decimal digits and an expiration date.
That is entirely unrelated to a decentralized or centralized design. One could build a centralized CC network where we don't need to transmit credentials to third parties in order to make purchases.
I agree with you, but this is in principle a separate issue. We would like to aim for a system that has both the security of Bitcoin AND the "efficiency" of, in this example, VISA.
That would be great, but what if such a system doesn't exist? Pointing out inefficiencies in Bitcoin isn't very useful when no alternative exists to reach the same level of decentralization.
Gold is also inefficient by design. But it's been successfully used as a store of value for thousands of years. It causes miners to expend large amounts of energy to extract gold from dirt. "Inefficient by design" misses the point because proof-of-work is the feature, not an inefficiency.
However, it only goes so far, since other consensus mechanisms could have lower energy requirements. Proof of stake, e.g., (if it ever gets off the ground) could change the game. Similarly, if the economics of proof of work were re-jigged, it isn't impossible that the energy required for mining could be dramatically lowered.
But, as it stands, Bitcoin, in particular, has a shamefully large environmental footprint.
Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database.
For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the system will work, and how the data will flow.
For example I've seen people on here mention applications such as a decentralized stock exchange, and a decentralized hotel rooms marketplace.
For either of these, it's necessary to get all the users of the system in a room and agree what is in scope and what is not, and in general what can be done with the system and how. At this point they already have a consensus, they trust each other, they might as well just set up a centralized database run by a 3rd party that manages the system, keeps it up to date and adds upgrades, instead of building it on the blockchain and hoping there are no major bugs in the cloud code and that it will live off gas.
For the stock exchange, that's exactly what we already have. We have institutions that are dedicated to running exchanges, which act as neutral arbiters. They use regular old centralised databases. When they have bugs in their code or the system makes a mistake they can even roll back trades, which they couldn't do on the blockchain.
Essentially this is the same argument as OP. The 3rd party's act of ironing out issues, deciding what the rules are and how they interact is synonymous with OP's term "governance". We agree that using/running the system is different than defining/implementing the system and the latter can't be done trustlessly.
And also governance gets a lot easier when you also run the system centralized ;)
That's not really true. Systems like Ethereum allow for arbitrary data storage and contract structures. The filter for consensus in a distributed environment will be usage. Lots of contracts will get written, a few will get used. Those few will be the ones people agree on.
Secondly, the consensus as to the schema isn't trustless even in blockchains. Deciding what to do and how to do it is and always will be trustful. What is trustless is the execution of that decision once its been made. That is the important contribution of blockchains.
They all say that they'll never roll back or retroactively make any changes. But inevitably, they always do. I thought Ethereum might have been different, but of course I had to be disappointed.
The problem with blockchains is that they still fundamentally fail to solve the problem of mob rule, though, I suppose you could argue that's one thing you'll never fully get rid while the human element is still involved. Robot overlords or bust?
> Ethereum Classic is a fork of Ethereum that held blockchain is immutable paradigm
Ethereum Classic did a hardfork last October which removed null accounts created in the DAO attack. Now, while this didn't change account balances, these were legally created accounts and the historical ledger was changed. The hardfork was controversial at the time for this reason.
You can't say that in Classic the blockchain is an immutable paradigm - it changed history just as Ethereum did.
After skimming the "respect" idea, I am convinced that echo chambers are the dominant strategy.
In fact, make a complete subgraph of order 9 or more of people who respect each other. That subgraph has order-N respect that goes to infinity for anyone who has any respect for any of its members, even transitively.
There are mechansims (see 'soundness') which reward people on the edge between filter bubbles for combining those bubbles. Maintaining a soundness core means resolving disputes between bubbles.
My goal is to gradually expand filter bubbles, rather than try to pop them.
Interesting. So reputation would act as a mediator for decision making then? Those with greater reputation would have more influence, and theoretically this should work because reputation would be gained only when other people notice that the person has done something beneficial/helpful in their eyes. Overall that should result in high reputation values being directly correlated to those who are altruistic and good.
It's definitely a cool concept. The main problem being I think is incentive to adopt. Without the weight of reputation having meaning behind it, no one will care and thus the intended effect disappears.
There isn't an absolute reputation score. Reputation is computed pairwise. Rep(a,b) means "What is the implied reputation of person b, given the persons a trusts"
So a bunch of fake accounts aren't going to influence a's perception of b,unless a has trusted someone who'se created those fake accounts. IN that case, the mistake a made was trusting someone (directly or indirectly) who'se created a bunch of fake accounts.
Because the input weight of a person decreases with their distance on the graph from a, the only sybil attacks that would screw you up would be ones conducted by people who you've said you trust.
I think concentration of power is a bigger problem than "mob rule". If certain people or groups are able to acquire the majority of the power in the system, then the egalitarian ideals of decentralization are lost. You have just traded one power (e.g. banks) for another (e.g. the big miners).
Decentralized systems aren't attractive only to decentralized groups. One application for which I've been considering use of a (private) blockchain is user authentication, and logging of authentication attempts.
Why would you want to do that with a blockchain? Is it necessary to store this logging data to thousands of nodes? What about 5 servers, geographically distributed?
Why do you assume a blockchain has to consist of thousands of nodes? A private blockchain works equally well across those 5 geographically distributed nodes.
So why use blockchain? Whats the benefit? The only thing I can think of is proof of authentication attempts, a kind of a irrefutable log of some sort. But whats the benefit its providing, that we are lacking today?
I think this is a really good idea. Would it be worthwhile to have a neutral party also maintain a node? Would that give the evidence more weight in court for example?
While I am not allowed to talk too much about it, this is exactly what I'm currently working on for certain high profile companies that wish to share information (query results) between themselves, without ever actually sharing the data itself, in a way that the country-wide regulator can verify and check for anticompetitive behaviour.
I'm currently having fun experimenting with homomorphic encryption, to see if I can't add another layer of "trustlessness"
This argument sums up my recent thoughts on blockchains. Proofs of their trustlessness and eventual consistency rely on explicit assumptions (no cartels with >50% computation power, bounds on network partitions), but the underlying unstated assumption is that there is consensus about the protocol and its rules to begin with. We've seen this assumption break down with the block size debate and the DAO fork.
However, I don't think that this completely rules out their usefulness. Blockchains are more like "consensus abstractions" - if you have the underlying consensus (achieved through a governance model that can engender it), then it allows for uses like smart contracts that can efficiently work on top of it. The "trustless" property is also maintained - for example, even if a cryptocurrency is designed, issued and governed by a central bank, the fact that the network is decentralized and its integrity can be independently verified (even if it is centrally secured) still has some social benefit.
With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract.
The entire idea is that no arbiter is truly neutral, no third party is truly trustworthy. Block chain is the onset of FAT protocols and trustful computing.
If the poor of the world can understand the social mobility that crypto currency affords them, there will be no stopping it, in my opinion.
> The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible.
Im not buying that. If there is a way, someone will do it. This actually seems like a huge vulnerability to me. Especially when we are talking about specialized blockchains where the participation isnt every internet connected person in the world. How do you prevent that from happening?
Notably, 'altering the ledger' here has a very restricted meaning. You can spend money, then reverse the spend back into your wallet. Or you can commit to a piece of information, then delete it.
But you can't alter the core protocol or fundamental network rules. If you do, the other nodes will ignore you.
> If the poor of the world can understand the social mobility that crypto currency affords them
Can you expand on how crypto currencies relate to positive social mobility?
Off-handedly it seems to me it would be the opposite, although I'm admittedly fuzzy on this..
In theory crypto currencies reduce rent-seeking from intermediaries; since much financial rent seeking is established as percentages of an exchange (like a credit card transfer), removing those rents will give bigger net advantages to those transferring large amounts than those transferring small ones.
Not saying removing rent seeking is bad (it's awesome!), but I don't see how that does anything but increase the difficulty for someone with low capital to catch up; rather it should be doing the opposite.
> Can you expand on how crypto currencies relate to positive social mobility?
Bringing those who are unbanked into the global financial system is a powerful way to help lift people out of poverty. In many cases, banks are unwilling or unable to serve the poor, so cryptocurrencies could potentially fill the gap. I don't think any current cryptocurrencies will achieve this, but there is some research being done on "stablecoins" which could fit the bill.
Cryptocurrency is already doing this, I don't have the names offhand, butt, (Ill eave the typo, hehe) there are several regions in Africa where bitcoin is a primary currency being traded.
OP's argument is that this distributed consensus algorithm works only if there is already consensus about which algorithm to use in the first place! If you and I disagree about which block history is valid (for example, because my history includes blocks with a lower difficulty), then the assumptions are no longer valid and there's a hard fork. Also, note that a 51% attack can only exclude transactions or allow double spending - the ledger still can't be arbitrarily manipulated since transactions are signed by private keys.
I think it's typically used when there's agreement on the list of nodes participating in the network. (The nodes can agree to change the list of participants, Lamport wrote about it in "Reconfiguring a State Machine".)*
With "blockchain" / proof of work, computing power substitutes for voting power: you pass state transitions by controlling a majority of the compute power rather than a majority of the voting power.
Have you seen "byzantine consensus" used in the second context (with proof of work) also?
(*) When I think of the Byzantine consensus problem, it's when:
- not every node has to vote in each round (so that the system can make progress even if some nodes fail);
- you can authenticate (e.g. with cryptography) that messages come from the appropriate sender (but not whether that sender is acting "honestly");
- the goal is to reach consensus, i.e., if any node concludes that some proposition (i.e. state transition) has passed, no nodes will ever agree on contradictory proposition.
The reason I believe in our model for consensus is that it more closely resembles trust in the real world. We're more explicit than meatspace, which could be a drawback, but I think it's a better model than trustless.
Didn't read the paper (got crypto burnout after 4 years at Kraken) but it occurs to me that the problem with explicit trust is that it is usually a one size fits all approach or someone has to tediously specify it in specific terms, neither of which work well at scale in the real world.
There's no reason that I can see why we can't automate the tedious bits. I can see someone creating some sort of a digital assistant program that applies trust policies to digital identities on behalf of a user. think for example something that applies a digital encoding of "I trust everyone whom I've paid to advertise their specials to me" or "I trust people who prove they live within 5 miles of my home address to send a neighborhood watch message to me", etc.
I'm not sure the specific formulation needed to be successful, but there is clearly value in something that helps people better manage digital trust. It's a shit show right now.
In short each node would have its own risk management profile. Entering a transaction using any settlement path or asset type (even multi-hop transactions involving multiple paths or assets) is the explicit decision of the actor in question, against that risk profile, available information, and its own priorities (eg. must complete by X date, prefer to avoid Y actor/system/asset, etc.)
Because the properties of each settlement network, asset type or actor are able to be formally defined, cross-system automation is possible and new systems with interesting properties are able to present themselves on a fair and equal footing.
Of course, with such lofty goals, it was never finished (I was keen but asked to direct attentions to urgent areas elsewhere), but recently I have begun to revisit it owing to my study of physical logistics networks and scheduling algorithms for my current startup http://8-food.com/
Thanks for the link! I'll check it out. I agree such a system is quite lofty at this point. I can start to see a feasible system in my mind, but IMO we're still just so far away from it working in reality and in practice.
I'm still on the horse for now... sorry to hear you got burnt out at kraken.
I wonder what a protocol might look like based on more cynical assumptions? Let's call it the House protocol because it assumes that everyone is hostile--lying and trying to cheat you. Sadly, I think this a more realistic assumption for the global digital environment.
What? So you're saying that since Cisco and Juniper both standardize protocols at the IETF, they should just merge their companies because they are already in one room anyway?
I don't find this a wholly satisfying position (and I say this even as someone who's generally a blockchain skeptic).
Concretely, this argument conflates agreeing on a set of rules with agreeing on an arbiter to determine the application of those rules. Those aren't the same thing, because only one of them centralizes power.
> At this point they already have a consensus, they trust each other, they might as well just set up a centralized database run by a 3rd party that manages the system
This is the critical point where I don't think the argument works. Firstly: they don't necessarily trust each other. They trust the system to work within the rules they have established. It simply doesn't follow from that that they should therefore be willing to trust a 3rd party.
For what it's worth, this is why I'm interested to see how the block size situation in Bitcoin resolves itself. If it happens relatively smoothly, it's a strong point for the ability of consensus to respond to pressing needs. If it doesn't... well, I might have to reconsider my position.
Notably, you don't have to agree on how to design a system. Many such systems exist and you just have to pick which one you want to use. If you see the rules as fixed, you can enter the system that most closely matches your needs, and then trust that it's not going to change from under your feet.
Well, the properly decentralized ones let you assume that the rules aren't going to change. Many blockchains though will implement whatever changes their developers desire.
Decentralized trustless databases can also be implemented with Merkle Trees (as it is done with certificate transparency). I dont understand why people choose blockchains instead.
If there's a new argument to be had here (I'm doubtful, it sounds like a re-hashing of governance issues that have played out over the last year), it's this claim:
"This rule-making is what we refer to as governance."
This conception of governance is the premise for the conclusion, what Lehdonvirta calls a "paradox":
"And this leads me to my final point, a provocation: once you address the problem of governance, you no longer need blockchain; you can just as well use conventional technology that assumes a trusted central party to enforce the rules, because you’re already trusting somebody (or some organization/process) to make the rules. I call this blockchain’s ‘governance paradox’: once you master it, you no longer need it."
This expansiveness is necessary, as Lehdonvirta recognizes. Contracts are not just enforcement, they also encapsulate the processes of making ("rule-making"), or better, negotiating contracts.
So, are we authorized to go from a rule-making notion of governance to the conclusion that once this is addressed blockchain technologies will be redundant? Lehdonvirta doesn't give us any analysis of this move, but I don't think so. Rather, we need to recognize the contested forms, which are the essence of governance, and then create a socio-technical structure around them. Consider: double-entry bookkeeping is just as much a technology for governance as blockchain technology (and, of course, they share a historical lineage). Does double-entry bookkeeping go away because we "address the problem"? Hardly. Rather, we need to recognize the ways that it has developed, and by whom, and for what use. Just like blockchain technologies.
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[ 4.6 ms ] story [ 278 ms ] threadhttps://news.ycombinator.com/item?id=14293114
I think eventually networks need to figure out distributed decision making.
In general I think the token design space is an extremely interesting one, and seeing how different models lead to different social structures and outcomes will be extremely interesting.
Of course this is not new (currently reading Debt: the first 5000 years), its just radically easier than before, to design, deploy, and use. As a result we'll see an explosion of variety, diversity, and competition, which'll be fascinating to see.
Already the differences in ICO mechanisms are extremely interesting, though they have a long way to go.
[0] https://blog.bigchaindb.com/tokenize-the-enterprise-23d51baf...
There needs to be some way to manage competing interests fairly(whatever that means) and efficiently.
The cost of transferring FX wholesale is near zero. If a bitcoin based processor implements the controls, the costs will be the same as a regular payment provider.
So bitcoin can only become cheaper than tradition payments if you bypass the legally required controls.
Yes, the concept of "money" existed before governments and therefore doesn't require government. That said, today's modern money is very much an instrument of government power. This is why alt-coins will not overthrow fiat currencies like some enthusiasts believe because Bitcoin does not come with its own Bitcoin-police-force and Bitcoin-law-courts.
The distributed block chain may eventually prove useful for other recordkeeping such as real estate property transactions (e.g. no need to pay $300 fee for title searches in the future), or maybe buy/sell internet domain names (e.g. don't need Verisign as middleman to buy dot com domains). Those scenarios are more realistic than Bitcoin/Ethereum replacing government approved fiat currencies. DLTs may still transform the economy -- but not in the ways people expect.
There's definitely some interesting applications of distributed consensus ledger but the idea of bypassing government money is overhyping its potential.
[1] https://news.ycombinator.com/item?id=11934120
My government will enforce a contract even if it is denominated in some foreign currency, will it not? Currency used is independent of jurisdiction.
They may award damages in legal tender, rather than in Bitcoin, but I have to pay taxes in legal tender anyway, so there will always be a market to convert back.
Right now they might be confused by Bitcoin enough that they won't effectively be able to assess damages, but that's not necessarily a permanent state of affairs.
Sure, if usage of that other currency is trivial enough volume that it doesn't threaten the government's currency. That's the sticking point. Bitcoin is allowed to exist at the whim of the government.
Usually, the same as it would for a contract for some non-currency commodity: by converting it to what it considers an equivalent value at the time of injury (not time of award or payment) in the legal tender currency.
If you are a business, why would you ever try to run on bitcoin alone? There would have to be a huge advantage. And we see that in many small cottage industries where that is an advantage, like buying drugs online or illegal gambling.
But without the need for pseudo-anonymity why would anyone ever use it? Why would your grocery store use bitcoin over dollars? They wouldn't.
So crypto will probably be a currency in the long run, but it won't overthrow regular fiat.
Plus, if there was a huge benefit to crypto, the Fed could just do a crypto dollar and peg it to the real dollar.
Because the want the money from people which have bitcoins? Because creditcard fees are to high? (just forget about the BTC fees or the nearly fictional double spending problem) Another reason could be that the owner has Bitcoins and wants to support them. There might be more reasons.
To some extent yes, but for any more serious business this really isn't a problem at all. I've been running a business that makes income in bitcoin only for 5 years now, and converting for taxes and accounting is quite trivial actually. Hardly any work is spent on those problems. You know, that kind of stuff is very trivial to automatize using those computers, unlike many other problems.
That seems counter to the ethos of the BitCoin enthusiasts.
I also doubt it will necessarily work for large sums. Governments may enforce contracts related to foreign money (if they find that the contract itself is in their jurisdiction, which isn't always the case) because they have quid pro quo agreements with other states, and it is mutually beneficial to global trade if global contracts can be enforced. (In a way, it similar to foreign mail being carried by local postal services.) But there is no quid pro quo with any friendly BitCoin government, so there is no incentive to enforce contracts.
That's because it's a non-realistic ethos.
A more accurate statement may be: today's modern money is very much an instrument of power over government
https://www.youtube.com/watch?v=K38khtCrN-4
I'm not sure they will fundamentally change anything either. You're making the same implicit assumption that there is an appetite in the market for a wide but not-quite-real-time distribution mechanism. I submit to you that outside of medical records and other specialist applications, there isn't.
As for the currencies, when they are backed by the promise of more energy as opposed to backed by the promise of spent energy I'll find that more interesting. I see the big weakness of Bitcoin being that it exists as it does only so long as the majority of computing power within it does not hijack it.
I'm pretty sure there are people/organizations who invested into such positions.
Isn't that a sort of control that may be worst then government power?
This is not actually true. The concept of money (quantifiable debt in a standard unit, such as coinage) was created by early states to lock subjects into what anthropologist David Graeber has called the "military–coinage–slave complex". Money cannot be separated from state violence.
https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
That said, we'd need to agree on definitions of "state" here. Some kinds of money surely existed before anything recognizable as a "state", but then again, such notions of money are likely as meaningless as this kind of unrecognizable state.
I wouldn't be so sure. As far as I know, current academic consensus is that in primitive societies, where everyone knows everyone, it comes down to a system of favors and everyones natural sense of what's "fair". These are relatively small groups of people, so there's a lot of trust involved. No need for any sort of currency there
I've read David Graeber's book. I do agree with him that the common (e.g. John Locke) narrative about money arising from direct barter is probably wrong. Money actually comes from credits/debits (aka delayed consumption).
However, I disagree you need government enforced violence for the basic apparatus of money. Perhaps it's a matter of defining "money" in different ways. I'm talking about "money" as a more basic expression of human bookkeeping.
If you have a small community where everybody knows each other, the people can cooperate to keep track of "accounts" of who owes what. They can write the debts/credits on a public church ledger or hypothetically leave it to the reliable memory of a trusted village elder. (E.g. you don't need government for women to spontaneously start trading scrips for future babysitting hours.) What governments enable is scalability. With government standardized money, strangers can transact the units of account across a larger administrative area.
Well, those people are then the government. In small scale communities it's one and the same -- they can all join together and deal with anybody who doesn't play nice. And these punishments are the analogous of e.g. prison.
So, what you say is true, but not very important in practical use, as we don't live in such small communities, and don't deal strictly in our own community even.
Sure, 2 people also don't need government. They can keep tabs, and if one doesn't repay or cheats, the other can always beat them up or stop dealing with the first. But they're basically acting as a government in themselves (in that they assume the role of government officials like law enforcement, law-making, etc).
"Government is not required" would made actual practical sense if somehow the technical solution used instead of money took care itself of debt repayment and ensured punishment (or make it so that punishment is redundant) of wrongdoers.
Right, that's today's situation. My "government not required" is talking about how ancient money can arise spontaneously without a separate entity that we think of today as "government". If we think of "money" at its basic level of keeping track of "promises", "favors", and "trust" ... all those human instincts of coordination can precede old governments like the Roman Empire and Egyptian pharaohs. It just can't do so on a large scale among strangers.
>2 people [...] they're basically acting as a government in themselves
If we go back & forth by then redefining "government" to mean "any humans coordinating" then I suppose we could stretch "governance" all the way back to human invention of fire. If we use this all-encompassing idea of "government", then I suppose it means nothing preceded government.
And what would be strange about that? I see no reason to constrain government to only mean the modern(-ish) state. Ancient Rome was also a government, Babylonians had kings, jungle tribes had rulers and elders, etc etc.
I'd say any human community had a governance structure way into prehistory.
>If we use this all-encompassing idea of "government", then I suppose it means nothing preceded government.
Yes -- but I don't find that strange. What would precede government? If there was anything, it would more like primate animals living in packs akin to animals, but with no other structure in their "communities". As soon as some structure emerges, they also need ways to decide what they do, assign responsibilities, punish bad behavior, etc.
That doesn't require a distributed ledger, just a database. In the UK it costs £3 and is searchable online.
If it costs $300 then that is because someone wants it to cost that much.
My short text didn't give enough context. In the USA, that $$$ isn't really for the "search"; it's to pay for the "title insurance". That title company insures that the buyer is getting a "clean title" with no conflicting claims of ownership from others he doesn't know about. The "search" is just one component of labor of what you're paying for. (I looked at my mortgage documents again and my title insurance actually cost $4000.)
With a distributed ledger for property deeds and title transfers, that was used by say -- 1 million people -- that essentially means you have 1 million "witnesses" to the transactions. Therefore "title insurance" becomes superfluous.
I'm not predicting that DLT would be used for property records but proposing that hypothetical scenario as something more realistic than bitcoin replacing the Euro/USD.
That would also solve the problem. Once again it seems like this is a social issue not a technical issue.
The governments (e.g. county courthouses) do store copies of the documents such as deeds and transfers. They stamp them with their seal so in that sense, they do "hold the authoritative title records".
However, there is no computer database with rows for all real estate that has a binary column called "CLEAN_TITLE" with values TRUE/FALSE.
Therefore, the actual state of a "clean title" isn't a flag but a case-by-case determination based on documents analysis. What an employee from a title company will often do is actually drive down to the court house and sit there looking through document archives to trace the chain of sales. This also includes looking at microfiche films[1] if the courthouse hasn't migrated all their images to electronic image databases. If the worker feels confident there are no outstanding claims, the title company can issue "insurance" that the title is clean. (Occasionally, the determination was wrong and the title company has to pay out the insurance because of their mistake.)
If the property gets sold again, another title company worker may do the same redundant "documents analysis". (Because new claims can be recorded against the deed since the last time the property was sold.) Yes, it's a really inefficient process!
Conceivably, a buyer could buy property without title insurance but since most people require loans, a bank won't lend money unless it has assurance the title is clean (because that property is the bank's collateral so it has to have confidence that nobody else has claims that supersedes the bank's.)
Could the governments create a convenient centralized database to solve those issues? Yes. But some people might prefer to have a distributed ledger to bypass the government holding those records. (E.g. the courthouse charges $20 to "record deed documents" or "$1 per page for copies of deeds", etc). The distributed ledger could theoretically not require those fees or make them very small.
[1] https://www.google.com/search?q=microfiche+reader&source=lnm...
Sure, in a limited sense... every distributed ledger use case can be replaced with a centralized database. The reason people would choose a distributed solution is to bypass the controls of the centralized authority. Similar reasons that bitcoin proponents prefer it over centralized fiat government currency.
Whether those distributed reasons are cost-effective or sensible remains to be seen. Who knows, maybe distributed ledgers will become so mainstream that it will be the county governments themselves that seed the real estate blockchain so they don't have to bother administering a central db.
(To be clear, I'm not trying to convince anyone of switching to distributed ledgers but laying out possible use cases.)
Normally, to verify ownership, each transaction is reviewed to verify that they follow a direct chain back to the property's origin.
Compare that to a blockchain, where an algorithm which all involved parties must agree to, traces ownership through each transaction involving the property back to its origin.
Both have situations that result in conflicts that have to be resolved, whether by algorithm or in a court room.
https://www.cryptocoinsnews.com/users-report-losing-400000-d...
The miner's interests are purely profit based, so they will not adopt changes which reduce their chance of profit.
https://themerkle.com/what-is-the-ethereum-difficulty-bomb/
Besides the other response you received, there also seems to be a shift to PoS simply because PoW mining wastes a lot of electricity.
1. Politics. Ethereum has a leadership team which functions very differently from Bitcoin Core. For one, the creator of Ethereum is well known and outspoken. He and the other members of the Ethereum Foundation made it clear that their intention was always to move to Proof of Stake. Though there are some who may not support this move, the general community bought into the project knowing that this was the plan from the beginning. And there's a lot of trust of Vitalik.
2. Technology. Ethereum adapts much more quickly to mining difficulty than Bitcoin. Bitcoin can't survive with 90% of the hash power on one chain and 10% of the hash power on another chain. The smaller chain would take 10 hours to mine a single block and months to readjust the difficulty. It would be unusable. Ethereum has already shown its resiliency to a split during the DAO hard fork. The smaller chain adjusted quickly and survived. What this might mean is that with the change to PoS, there could be a dissenting faction that remains on PoW, and both chains will survive. This will allow the PoS chain to go ahead and push through with a split easily even without 100% support.
how is that any different to the existing currency system like credit cards and banking?
And users _do_ have a say in bitcoins. Namely, they can vote with their wallet (literally and figuratively).
Fiat currency is governed by central banks, which are arms of government, and are accountable to the public in the same way as the issuing government. Obviously, the degree of accountability varies from government to government.
And I say that as someone who voted Remain in the Brexit referendum (note that Varoufakis actually campaigned on the Remain side in the UK).
It's roughly similar to buying shares in a publicly-traded bank, which you can do as well as electing candidates for public office to whom the central bank, which is the entity making monetary policy decisions, is accountable.
So it gives you more relative power with altcoins only to the extent that those with more wealth are relatively uninterested in the altcoins in question compared to traditional banking; were a digital currency to succeed beyond a small niche, that would change and you would find yourself as drowned out by moneyed interests as you are in traditional banking on that avenue of leverage, and without the other avenues of accountability that exist with the governance of fiat currencies.
i dont believe that even owning a bank could you directly control monetary policy or procedures that the gov't legislates. You'd have to own either the majority of all banks, or own the gov't yourself (i.e., dictatorship), and even then, it's a hardsell.
Consider that miners also lose money if the thing they are mining loses value. Therefore, if enough economic actors (besides miners) switch to version B that has some new feature, everyone will want to use version B instead of version A. The miners who are stuck mining version A lose money because the currency they're mining is no longer as valuable.
Realistically, the economics of cryptocurrency features work out quite nicely. You can't just say "oh, the miners make the blocks, so they have absolute control".
Incorrect, I can sign or construct any type of cryptographic payment I wish. Miners trade their Proof of work to prevent double spends in exchange for coinbase (currency issuance) that the market values. If miners chose to mine on a chain that no one wants, no one will trade for their coinbase.
The game theory nuance is, how do you organize an economy around changes to blockchain consensus? The only guaranteed way to ensure that that happens (from a game theory perspective) is to have miners lead the change. If user wish to lead the change, they still can but they take a risk in that no one will join them on the new consensus chain ("hey you guys said you'd construct payments like this and now no one is!"). There are more improved ways of rolling out these changes.
At worst miners can execute a denial of service for new transactions entering into the UTXO or attempt to double spend funds, or release blocks in a manner that negatively affects the profitability of other miners but they have _no control_ over how users handle their UTXO.
Bitcoin is anti fragile, each time it goes through a market challenger it gets better at handling it, not weaker.
The longest chain is always the most valuable.
From the perspective of people transacting on Bitcoin's infrastructure I suspect they'd call it "an attack."
You grossly underestimate the hashing capacity of the bitcoin network. The hashing capacity, at time of posting, is approximately 5,000,000,000 Gigahashes/second[1]. Spot measurement of the hashing capacity of an EC2 instance is 0.4 Gigahashes/second[2]. You would need 12 BILLION EC2 instances to 51% attack the bitcoin network.[3] Using EC2 to attack the network is impractical and inefficient.
[1] https://bitcoinwisdom.com/bitcoin/difficulty
[2] https://www.reddit.com/r/Bitcoin/comments/1btgl1/i_was_curio...
[3] x/(5e18+x)=.51 y=x/.4e8
Even most BTC users do not run actual clients anymore but use exchanges or wallet services which bundle huge numbers of users behind few actual Bitcoin network nodes.
I don't need to overcome the network, I need to invite the network to have arguments with itself, by finding a way to introduce widespread partitioning of the network.
In this, the preference to longer hash chains seems like a good idea in a unified clock model but a somewhat optimistic decision in a split clock world.
To do this you would need to have the equivalent hashing power of the network. Peers expect an nominally equivalent amount of Proof of Work for the difficulty adjustment. You would also need to guarantee that the peer connects to _no other_ peers
Your thinking is good adversarial thinking but it's already covered in the protocol.
No, if the miners mine on a chain that doesn't meet consensus rules, users will not follow it. If miners decide that the coinbase issuance schedule isn't to their liking, and decide to revert it back to 50 bitcoins per block, users will reject those blocks. This is a fundamental governance property of a blockchain.
Yes, users can reject Hard Forks.
But the problem is that soft forks can do basically anything. Yes, even increase the block reward, in a roundabout way, (by using added extension blocks that have special rules, and then requiring all transactions to go through the extension blocks.)
Although from the perspective of a non-conforming Node, this would just look like a DDOS style mining empty blocks attack.
At this point the only thing that users can do is change the Proof of Work algorithm. .... But, if the big players in mining have a bunch of GPUs on standby... well, it is not even guaranteed that this will work.
Only the longest chain that users consider legitimate. If users reach consensus on using rules that have lower transaction costs, it won't matter how long miners mine their higher transaction cost chain.
The big question is: can users achieve such consensus politically, or in practice do the miners lead the users because they need less organization to do so?
Incorrect. Nodes enforce consensus in bitcoin, not miners. It is thus. It has always been thus.
Nodes have no say in consensus, the miners can ignore them and decide which transactions they want to include. All a node can do about it is complain to itself.
First, you have to understand what 'consensus' actually means :
> https://en.wikipedia.org/wiki/Consensus_%28computer_science%...
> A fundamental problem in distributed computing and multi-agent systems is to achieve overall system reliability in the presence of a number of faulty processes. This often requires processes to agree on some data value that is needed during computation. Examples of applications of consensus include whether to commit a transaction to a database (or, for example, committing blocks to a blockchain), agreeing on the identity of a leader, state machine replication, and atomic broadcasts. The real world applications include clock synchronization, PageRank, opinion formation, smart power grids, state estimation, control of UAVs, load balancing and others.
Nodes are the agents in a multi-agent system enforcing consensus.
Nodes accept incoming transactions and validate them. Miners don't. Nodes replicate transactions to other nodes. Miners don't. Miners take transactions from nodes, and order them in a block, and perform a hashing function on them (the only thing they do). Miners pass the new block to the node. The node validates the transactions in the block. Miners don't. The node validates the block. Miners don't. The node replicates the block to other nodes. Miners don't.
There is only one function that miners do. They take transactions, put them in a block, and hash them. As soon as a miner produces a block that any node determines does not obey consensus rules, it is rejected. It doesn't even matter if another node has already accepted, because consensus is aligned with all nodes. Any node that replicates non-consensus blocks or transactions is itself rejected.
So nodes accept the transactions, validate the transactions, replicate the transactions, maintain the mempools, validate the blocks, replicate the blocks, serve the blockchain, and store the blockchain. Nodes even define the PoW algorithm that miners have to employ.
Nodes maintain the protocol, not miners. It is thus. It has always been thus.
See for yourself. Download it.
https://bitcoin.org/en/download
It's currently at 0.14.2
https://bitcoin.org/en/full-node
> A full node is a program that fully validates transactions and blocks. Almost all full nodes also help the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then relaying them to further full nodes.
You should probably question how such a fundamental misunderstanding of how bitcoin works comes about. Is there a source for your opinion?
He mentioned that.
You lose the following: 1 - Ability control monetary policy 2 - Reduction in theft via cost in effort (same thing as with e-voting and rigging elections)
Because of that you have seen that blockchain stuff works on countries where 1 is badly handled. everywhere else nobody really cares except for the hype.
Edit: proper english.
But you haven't explained why its "worse"? So borrowers are disadvantaged compared to lenders (savers).
And wage earners are in a better position relative to wage payers.. ? That's what I take away from your statement.
But, one's ability to buy things seems to be improved...
Should we want an inflationary economy more college-tuition, healthcare-cost-like... or computing & software-like? Continually falling prices for all things computing related have done wonders for that industry no?
Would consumers be better or worse off having to spend less on food clothing housing energy? Would they have more or less disposable income with flat or falling prices?
Ok now assume increases in those costs... better or worse off? More or less disposable income?
It's only improved if there is a lot of investment and new / more products coming out. deflationary currency promotes holding on to your money so that it goes up in value, but if everyone does that there will be less products / services and the value of the currency will ultimately go down. If currency has some inflation, then it's used as a transaction currency so that you want goods rather than currency, so the product becomes the important thing. If you have too much inflation however you get way too much money for the amount of products, so you want stable inflation.
Won't there be more investible cash because a lower percentage of one's wages is devoted to commodities, and essentials? As well, there is less of an incentive to stockpile or "get ahead" of future price increases.
So.. more left over to invest?
Does expectation of future flat or lower prices give you confidence to plan a vacation, invest extra money, etc.. or would you prefer to worry about food, gas, and other prices going up in the future? (along with your sticky wages making your real wage go down)
In fact, I 100% agree that savings and investment are key to future growth, technology and the whole enchilada. Which is why I don't support stealth tax of inflation, or of governments debasing the currency and stealing wealth from citizens.
But without even the pretense of funding businesses and actually participating in the economy. Your money can grow on hot air and wishes alone! Why don't we give all people some bitcoin, so everyone can grow richer and richer without doing anything.
I have a plan to double the US GDP in one year:
The US GDP is around $20 trillion. That means we only need to set n to 20 million and we now have a $40 trillion economy.People indulge a lot of strange and wrong ideas about economics and, not surprisingly, those bad ideas are typically well aligned with their preferred world views.
The other comment had it right though - taxes would kill this scheme.
...with no more veracity than your hypothetical. You don't understand what GDP measures. You've allowed yourself to believe that the economists involved are naive. You are correct, however, that this sort of bad thinking is common. Very common.
When you pay for entertainment it's 100% included in GDP the same way as when you pay for somebody to inspect your car.
But I think the real barrier to adoption is that most people don't mind using centralized systems. If their Visa card works when they swipe it, they don't think beyond that. If it's easier for the end user when systems are centralized, breaking people out of this mindset will be very difficult.
I certainly don't see the benefit of burning the amount of energy the average bitcoin transaction is now responsible for, when (as you say) I have Visa.
And with Visa I can charge-back if I get ripped off. Bitcoin is, AFAICT an actively worse proposition for me.
It is not governance-free.
Regardless of relative size of this group, governance is opaque, political and chaotic, not either absent or purely mathematical.
Bitcoin has opaque governance; it does not have a lack of governance.
> It's resilience is a virture because it becomes difficult to corrupt
It is not at all difficult to corrupt. (Arguably, since it's fundamentally based on “them what have they gold, make the rules”, it's foundationally corrupt and takes nothing additional to corrupt. But, in any case, all it takes to corrupt it is will and money.)
While crypto technologies are improving, they have some glaring drawbacks:
- The recent BTC confirmation time (transaction processing duration) was in days[1].
- The consumer loses significant protections because transactions are final.
- On a broader note, no centralized controls or responsible entities means no one to point fingers at when something goes wrong.
- There are very steep learning curves for all participating parties.
These are all being worked on through technology improvements and new blockchains, but they're still issues that prevent blockchains from displacing existing systems. I think they could one day change everything in an Innovator's Dilemma fashion, but not anytime soon (5-20 years). There is already staunch opposition to using clearly superior technologies due to cultural factors, for example:
- Americans won't use chip readers partly because the magnetic strip was already widespread[2].
- Developed nations don't use mobile chat operating systems such as WeChat partly because they already had laptops[3].
So in the case of blockchains, not only is there an overwhelming opposing cultural force, but also they happen to make inroads in sensitive industries such as finance/contracts, and the technology is not superior on many levels. This would make adoption very difficult.
Where it will work
However, some people don't have such great institutions. Look at how successful BTC has been in turmoil-ridden South American nations such as Venezuela and Argentina[3]. The inflation is out of control, and consumers don't trust any of the banks or institutions. In this environment, the blockchain is leaps and bounds better than anything else that these consumers have access to, so it's immensely valuable. You'd be willing to wait several days for transaction clearance. You wouldn't care that the transfer is final. You'll do whatever awkward dance it takes to operate and secure a Bitcoin wallet. There's no better alternative, and financial asset security is important.
I think characteristics of an ideal market for blockchain technology today could be:
- Very low trust among participants.
- No trusted central authority.
- Expensive, long, or nonexistent arbitration cycles.
- High transaction costs.
Its most compelling value is the provision of trust where there is none. An example where this might work well is in the specification and mediation of international contracts for small businesses. There is currently little accountability after getting burned in an international transaction with a small entity, as a small entity. If there were a standard trusted registry of company reputation, transaction histories, and contracts, then it could go a long way to building systems of trust that enable more fluid trade afar.
[1] https://blockchain.info/charts/avg-confirmation-time?timespa...
[2] http://www.digitalcheck.com/emv-will-usa-be-ready/
[3] https://techcrunch.com/2016/06/01/it-might-be-time-to-stop-l...
[4] DiNovi ↗ and a distributed system of trust means a lot of well paid jobs (accountants, lawyers)will... not be necessary root_axis ↗ Please give a single example of how blockchains will make lawyers or accountants necessary. DiNovi ↗ I said it make then not necessary. davidgerard ↗ The "Look at the popularity of Bitcoin in [country]" argument always turns out to be made-up rubbish. wyc ↗ Thank you for your research into this! I found it difficult to locate good sources too, and that fact is worthy of more disclaimer than I gave. I think you're right in giving any claimed causality in new territory a good hard knock. davidgerard ↗ > It could indeed be just a blip, but would you agree that there exist reasonable incentives for usage of DLTs in unstable economies? davidgerard ↗ Further on this: I'll just have a little rant.
I did actually try tracking the Venezuela hype to its source. You have linked the Reason article as a reference, but if you actually read the thing, its title is "The Secret, Dangerous World of Venezuelan Bitcoin Mining: How cryptocurrency is turning socialism against itself" and the article itself is an unhinged libertarian polemic fiercely advocating Bitcoin as a way to avert the SPECTRE of SOCIALISM and REGULATION. One of their interviewees had been arrested for stealing electricity to mine bitcoins, which the author describes as a "government crackdown" on "freedom" because "bitcoin mining is arguably the best possible use of electricity in Venezuela".
A story in The Guardian in the wake of the Reason story appears to be where the rest of the press picked it up. It spoke of some Venezuelans relying on Bitcoin for "basic necessities" - and was based on interviews with a Bitcoin exchange owner, one of his employees and two of his customers. The author had previously written similar stories of Argentina and bitcoin. https://www.theguardian.com/technology/2016/dec/16/venezuela...
These two questionably-founded stories were echoed and elaborated upon by the rest of the press, including - amongst many others - the Washington Post claiming that Bitcoin mining is "big business" in Venezuela (which it in no way is), the New York Times claiming that Bitcoin has "gained prominence" because of Venezuela, and BBC News repeating claims from a Bitcoin boosterism blog - all of this being factoids repeated in a media game of telephone.
The Venezuelan volume on LocalBitcoins at the time was on the order of 300-400 BTC/week, which isn't nothing, but is negligible in the context of a whole country, and tracked fairly closely with LocalBitcoins usage in other countries.
tl;dr no, Venezuela isn't a thing either.
The rate of usage growth could give more insights than just current volumes:
https://coin.dance/volume/localbitcoins/VEF
It could indeed be just a blip, but would you agree that there exist reasonable incentives for usage of DLTs in unstable economies?
tl;dr no. Cryptocurrencies (we're not talking about the general euphemism "DLT", your question is about cryptocurrencies and specifically Bitcoin) don't solve any of the problems people have in that situation. When every story about "Bitcoin in [troubled country]" has turned out to be made-up rubbish, this leads me to consider all such claims wishful thinking on the part of holders.
I'm writing a book on Bitcoin/blockchain https://davidgerard.co.uk/blockchain/ and have taken to researching Bitcoin/blockchain stories that make it to mainstream media - because this is what ordinary people hear about it - and tracing them to their sources, because far too much of what I'm trying to use as sources just doesn't check out.
In almost all cases they're complete BS started by Bitcoin/blockchain promoters. Every "Bitcoin adoption in xxx" story is rubbish. Most corporate blockchain adoption stories are rehashed press releases, usually from IBM.
Blockchain marketers consistently claim some prominent company "is using" a blockchain when there’s just been a press release that they are "investigating" running a future trial. This is because an "investigation" is cheap, and telling Beleaguered Bob in the office to look into this "blockchain" stuff is worth the PR value in showing you're fully up to date with current buzzwords. "Researching the opportunities" could mean anything, but pretty much always does mean nothing.
If you see a use case that catches your attention, a web search on the company names and the word "blockchain" will often track down the original press release. Check very carefully which details are clearly substantiated in the present tense, and which are (what's a good word) aspirational.
Journalists who bother actually picking up the phone and talking to people, e.g. Izabella Kaminska at FT, get a barrage of personal abuse from Bitcoin advocates, whose social skills really haven't gotten any better in the past several years.
The Bitcoin press is possibly even worse - it pretends to be news coverage, but it's actually advocacy blogs posting any boosterism that crosses their path, because what their readers want is reassurance that this is the future and their holding will go TO THE MOON. The best of them is probably CoinDesk, and even they've never seen an unreleased hype they didn't like and run an enthusiastic article on. The mainstream press keep assuming all this is specialist coverage that's done with journalistic intent (rather than advocacy from holders) and copy'n'pasting it.
Even when the Bitcoin blogs are trying to do real news, they're inexcusably sloppy, and you really do have to check every factual claim individually.
tl;dr Bitcoin journalism is bloody terrible.
1. Less costs to switch to a competitor comparing to banks and states which leads to 2. The governance body and all influential members are really in need of public approval of their actions since that is exactly what makes a coin worthy. If they change protocol in a drastic way, the price will immediately plummet leaving them in tatters 3. Same mechanism prevents conflicts within the community
In general I would like to see more about the role of law in economics and possible tech implementations of it (meta-protocols?)
Point #1 is exactly not what you want. It means your currency can lose value almost instantly. Fiat currencies can do this, but only rarely actually do.
And ironically, most Bitcoiners believe this is exactly what gives Bitcoin its worth.
Sidenote: I also find it ironic that the author, a Faculty Fellow of the Alan Turing Institute, is enamored with governance when it was governance that forced Alan Turing to be chemically castrated.
Anyone who doesn't see this and argues "we should just go back to the way we were doing things before" is missing the point.
The network effects are great, because otherwise everything would explode into a million different currencies.
This might be a better state of affairs if currencies are backed by something exchangeable (e.g., joules of carbon neutral energy, etc...). We don't have many currencies like that in the world, as I understand it. Most are essentially contracts between governments that may or may not end in violence.
Even if it weren't so, I still don't get why total decentralization is an absolute good thing.
Nature seems to be a symbiosis between centralized and decentralized systems - at every level; extremes (too much or too little centralization) will lead to isolation/extinction or explosion/implosion - think biological systems or stars in galaxies.
I disagree with my crypto anarchist friends who believe that changing the money system will change society (eg. society is a function of money) and I tend to think that the relationship is more symbiotic - society has to change in order for the money to take other roles.
Even so, given human nature, it is not clear if a totally decentralized monetary system is a good thing for society as a whole.
People trust 'authorities' more than they trust math written by a bunch of 'core' devs and that's because the former can easily apply brute force and coerce the latter. Yes, we're still primates and the bigger/stronger argument is still valid.
So I don't think Bitcoin will dramatically change society, but some form of symbiosis between the current banking system and the crypto currencies will emerge eventually - and then we can talk about centralization at a whole different level. Either way, there's no escaping it.
Source: http://digiconomist.net/bitcoin-energy-consumption
VISA Network Statistics
VISA's estimated annual electricity consumption (TWh) 0.54
Number of U.S. households that could be powered by VISA 50,000
Electricity consumed per transaction (KWh) 0.00651
Number of seconds the electricity consumed by 1 VISA transaction could power 1 U.S. household 19
Number of VISA transactions that could be powered with the electricity consumed by 1 Bitcoin transaction 20,983 `
The solution, of course, is to store a private key on a hardware device, not have the private key be 16+3 decimal digits and an expiration date.
the very first fusion reactors arent all that efficient, either.
I've written about the similarity between gold and Bitcoin here: https://runeksvendsen.github.io/blog/posts/2017-06-14-bitcoi...
However, it only goes so far, since other consensus mechanisms could have lower energy requirements. Proof of stake, e.g., (if it ever gets off the ground) could change the game. Similarly, if the economics of proof of work were re-jigged, it isn't impossible that the energy required for mining could be dramatically lowered.
But, as it stands, Bitcoin, in particular, has a shamefully large environmental footprint.
Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database.
For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the system will work, and how the data will flow.
For example I've seen people on here mention applications such as a decentralized stock exchange, and a decentralized hotel rooms marketplace.
For either of these, it's necessary to get all the users of the system in a room and agree what is in scope and what is not, and in general what can be done with the system and how. At this point they already have a consensus, they trust each other, they might as well just set up a centralized database run by a 3rd party that manages the system, keeps it up to date and adds upgrades, instead of building it on the blockchain and hoping there are no major bugs in the cloud code and that it will live off gas.
For the stock exchange, that's exactly what we already have. We have institutions that are dedicated to running exchanges, which act as neutral arbiters. They use regular old centralised databases. When they have bugs in their code or the system makes a mistake they can even roll back trades, which they couldn't do on the blockchain.
Essentially this is the same argument as OP. The 3rd party's act of ironing out issues, deciding what the rules are and how they interact is synonymous with OP's term "governance". We agree that using/running the system is different than defining/implementing the system and the latter can't be done trustlessly.
And also governance gets a lot easier when you also run the system centralized ;)
Secondly, the consensus as to the schema isn't trustless even in blockchains. Deciding what to do and how to do it is and always will be trustful. What is trustless is the execution of that decision once its been made. That is the important contribution of blockchains.
The problem with blockchains is that they still fundamentally fail to solve the problem of mob rule, though, I suppose you could argue that's one thing you'll never fully get rid while the human element is still involved. Robot overlords or bust?
Ethereum Classic is a fork of Ethereum that held blockchain is immutable paradigm and let DAO continue to be drained.
Ethereum Classic did a hardfork last October which removed null accounts created in the DAO attack. Now, while this didn't change account balances, these were legally created accounts and the historical ledger was changed. The hardfork was controversial at the time for this reason.
You can't say that in Classic the blockchain is an immutable paradigm - it changed history just as Ethereum did.
https://github.com/neyer/dewdrop
With a much simpler version of the same concept here
https://github.com/neyer/respect
I think it's doable.
In fact, make a complete subgraph of order 9 or more of people who respect each other. That subgraph has order-N respect that goes to infinity for anyone who has any respect for any of its members, even transitively.
My goal is to gradually expand filter bubbles, rather than try to pop them.
It's definitely a cool concept. The main problem being I think is incentive to adopt. Without the weight of reputation having meaning behind it, no one will care and thus the intended effect disappears.
So a bunch of fake accounts aren't going to influence a's perception of b,unless a has trusted someone who'se created those fake accounts. IN that case, the mistake a made was trusting someone (directly or indirectly) who'se created a bunch of fake accounts.
Because the input weight of a person decreases with their distance on the graph from a, the only sybil attacks that would screw you up would be ones conducted by people who you've said you trust.
I'm currently having fun experimenting with homomorphic encryption, to see if I can't add another layer of "trustlessness"
However, I don't think that this completely rules out their usefulness. Blockchains are more like "consensus abstractions" - if you have the underlying consensus (achieved through a governance model that can engender it), then it allows for uses like smart contracts that can efficiently work on top of it. The "trustless" property is also maintained - for example, even if a cryptocurrency is designed, issued and governed by a central bank, the fact that the network is decentralized and its integrity can be independently verified (even if it is centrally secured) still has some social benefit.
https://dfinity.network/
https://tezos.com/
Not endorsing, just pointing out.
I suggest listening to this Tim Ferris podcast with Nick Szabo: http://tim.blog/2017/06/04/nick-szabo/
The entire idea is that no arbiter is truly neutral, no third party is truly trustworthy. Block chain is the onset of FAT protocols and trustful computing.
If the poor of the world can understand the social mobility that crypto currency affords them, there will be no stopping it, in my opinion.
Im not buying that. If there is a way, someone will do it. This actually seems like a huge vulnerability to me. Especially when we are talking about specialized blockchains where the participation isnt every internet connected person in the world. How do you prevent that from happening?
At times the leading BTC mining pool has controlled greater than 50% of the nodes. Would this not be enough to alter the ledger?
https://news.ycombinator.com/item?id=14485430
But you can't alter the core protocol or fundamental network rules. If you do, the other nodes will ignore you.
Somehow "the other nodes" have reached consensus about what protocols or rules to follow, and this is where we end up back at human governance.
Can you expand on how crypto currencies relate to positive social mobility?
Off-handedly it seems to me it would be the opposite, although I'm admittedly fuzzy on this..
In theory crypto currencies reduce rent-seeking from intermediaries; since much financial rent seeking is established as percentages of an exchange (like a credit card transfer), removing those rents will give bigger net advantages to those transferring large amounts than those transferring small ones.
Not saying removing rent seeking is bad (it's awesome!), but I don't see how that does anything but increase the difficulty for someone with low capital to catch up; rather it should be doing the opposite.
Bringing those who are unbanked into the global financial system is a powerful way to help lift people out of poverty. In many cases, banks are unwilling or unable to serve the poor, so cryptocurrencies could potentially fill the gap. I don't think any current cryptocurrencies will achieve this, but there is some research being done on "stablecoins" which could fit the bill.
Tether?
I think it's typically used when there's agreement on the list of nodes participating in the network. (The nodes can agree to change the list of participants, Lamport wrote about it in "Reconfiguring a State Machine".)*
With "blockchain" / proof of work, computing power substitutes for voting power: you pass state transitions by controlling a majority of the compute power rather than a majority of the voting power.
Have you seen "byzantine consensus" used in the second context (with proof of work) also?
(*) When I think of the Byzantine consensus problem, it's when:
- not every node has to vote in each round (so that the system can make progress even if some nodes fail);
- you can authenticate (e.g. with cryptography) that messages come from the appropriate sender (but not whether that sender is acting "honestly");
- the goal is to reach consensus, i.e., if any node concludes that some proposition (i.e. state transition) has passed, no nodes will ever agree on contradictory proposition.
The reason I believe in our model for consensus is that it more closely resembles trust in the real world. We're more explicit than meatspace, which could be a drawback, but I think it's a better model than trustless.
Disclosure: I work for stellar.org
I'm not sure the specific formulation needed to be successful, but there is clearly value in something that helps people better manage digital trust. It's a shit show right now.
In short each node would have its own risk management profile. Entering a transaction using any settlement path or asset type (even multi-hop transactions involving multiple paths or assets) is the explicit decision of the actor in question, against that risk profile, available information, and its own priorities (eg. must complete by X date, prefer to avoid Y actor/system/asset, etc.)
Because the properties of each settlement network, asset type or actor are able to be formally defined, cross-system automation is possible and new systems with interesting properties are able to present themselves on a fair and equal footing.
Of course, with such lofty goals, it was never finished (I was keen but asked to direct attentions to urgent areas elsewhere), but recently I have begun to revisit it owing to my study of physical logistics networks and scheduling algorithms for my current startup http://8-food.com/
I'm still on the horse for now... sorry to hear you got burnt out at kraken.
Concretely, this argument conflates agreeing on a set of rules with agreeing on an arbiter to determine the application of those rules. Those aren't the same thing, because only one of them centralizes power.
> At this point they already have a consensus, they trust each other, they might as well just set up a centralized database run by a 3rd party that manages the system
This is the critical point where I don't think the argument works. Firstly: they don't necessarily trust each other. They trust the system to work within the rules they have established. It simply doesn't follow from that that they should therefore be willing to trust a 3rd party.
For what it's worth, this is why I'm interested to see how the block size situation in Bitcoin resolves itself. If it happens relatively smoothly, it's a strong point for the ability of consensus to respond to pressing needs. If it doesn't... well, I might have to reconsider my position.
Well, the properly decentralized ones let you assume that the rules aren't going to change. Many blockchains though will implement whatever changes their developers desire.
>Perhaps blockchain technologies can still deliver better technical performance, like better availability and data integrity
The supporting argument is so tight that it never even invokes the repeated failures of Bitcoin at the exchange/storage level: Mt Gox, wallets et al.
"This rule-making is what we refer to as governance."
This conception of governance is the premise for the conclusion, what Lehdonvirta calls a "paradox":
"And this leads me to my final point, a provocation: once you address the problem of governance, you no longer need blockchain; you can just as well use conventional technology that assumes a trusted central party to enforce the rules, because you’re already trusting somebody (or some organization/process) to make the rules. I call this blockchain’s ‘governance paradox’: once you master it, you no longer need it."
My own analysis draws on a more expansive definition (from Introna; Saurwein et al.): http://iqdupont.com/assets/documents/DUPONT-2017-Preprint-Al...
This expansiveness is necessary, as Lehdonvirta recognizes. Contracts are not just enforcement, they also encapsulate the processes of making ("rule-making"), or better, negotiating contracts.
So, are we authorized to go from a rule-making notion of governance to the conclusion that once this is addressed blockchain technologies will be redundant? Lehdonvirta doesn't give us any analysis of this move, but I don't think so. Rather, we need to recognize the contested forms, which are the essence of governance, and then create a socio-technical structure around them. Consider: double-entry bookkeeping is just as much a technology for governance as blockchain technology (and, of course, they share a historical lineage). Does double-entry bookkeeping go away because we "address the problem"? Hardly. Rather, we need to recognize the ways that it has developed, and by whom, and for what use. Just like blockchain technologies.