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r/MAINSTREETCRYPTO EXCLUSIVE: INTERVIEW WITH ROGER VER
MAINSTREETCRYPTOEXCLUSIVE: INTERVIEW WITH ROGER VER https://preview.redd.it/9rycme1mdgr41.jpg?width=200&format=pjpg&auto=webp&s=30c55fb3ff8b3705726a04109797063a26798798 Roger Ver, is one of the five founders of the bitcoin foundation. You could say he was ahead of his time, buying $25,000 worth of bitcoin when they were merely $1 each. He was the first major investor to invest millions in Blockchain.info, Ripple, Kraken, and Bitpay among others. Now he wants Bitcoin Cash, a fork of the legacy chain, to be used as a global P2P currency, and says it can scale just like Satoshi first laid out in the original Bitcoin whitepaper.--------------------------------------------------------------Bitcoincash.orgRank: #5Current Price: $257.65Market Cap : $4,741,042,75924 hour trading volume : 1.741 Billion USD--------------------------------------------------------------Hi Roger, first and foremost, I wanted to thank you for taking the time to do this. You are truly a pioneer in the Bitcoin space, and all of us owe you a debt of gratitude. On behalf of all of us, I wanted to say thank you for advancing the space. 1. First, I want you to take a moment and appreciate how far bitcoin and cryptocurrency has come this past decade. Did you ever believe you would see such growth, interest, and adoption in such a short period of time or has it completely surprised you? We always over estimate the amount of progress that will be made in the short term, but underestimate the amount of progress that will be made in the long term. Crypto currency is another example of that. 2. At what point did it hit you that bitcoin was history in the making? From the very first day I knew it was one of the most important inventions in the history of humankind. The book Digital Gold goes over how I literally had to go to the emergency room because of the excitement I had for Bitcoin. 3. How did you first get into bitcoin, pre Bitinstant? I first heard about it on the FreeTalkLive.com radio show. A full history of the early years is covered well by Digital Gold. 4 .What economists and philosophers do you align with? I think Murray Rothbard fits into both categories and his thinking influenced mine more than any other single author. Others who have influenced me would include: Adam Smith Ludwig von Mises Milton Friedman David Friedman John Locke Henry Hazlitt Frederick Bastiat Larked Rose Ray Kurzweil 6. What has been your favorite moment in crypto history thus far? My favorite moments were reading the underlying philosophy behind the Silk Road. The government has done an amazing job distorting and smearing the underlying message behind the site. My eyes started to tear up when I read this post on the front page of the Silk Road for the fist time: https://www.reddit.com/Anarcho_Capitalism/comments/29diyt/defcons_latest_post_on_silk_road/?sort=top I never bought or sold a single thing there, but I spent countless enjoyable hours reading their forums and exploring the site. 7. What are your future plans for Bitcoin Cash? It isn’t just a hobby, it’s a global revolt. We will become money for the world. 8. Branding is so important. Bitcoin currently has greater brand recognition a la Coca-Cola, and is regarded by many as the “real” Bitcoin, even though this is widely disputed, especially by crypto-fundamentalists. Do you envision a Coca-Cola vs. Pepsi type scenario? Do you envision parity price-wise between the two on a long enough timeline? Bitcoin Cash has more utility than BTC, so in the long run it will have a larger market cap. Currently we are in the era when Myspace was bigger than Facebook, but Myspace’s servers were being over loaded and causing a bad user experience. Eventually people migrated to Facebook and eventually people will migrate away from BTC. 8. a) Have you ever thought of re-branding Bitcoin Cash? No one is in control to do such a thing by themselves. The community can’t even agree on orange vs green for the colors. 9. Bitcoin Cash has the potential to truly be used as a global form of payment rather than merely a store of value, what else excites you the most about the potential of Bitcoin Cash?
Payments for the world. That’s all we need. 10. I asked Adam Back the same question: If you could remove yourself from the equation, and remove bias, how would you objectively evaluate the pros and cons of Bitcoin Cash versus The Lightning Network? Anyone can permissionlessly start using BCH to start sending or receiving payments world wide in about 30 seconds. (The time it takes to download an app) It is accepted by more than 100,000 websites around the world, and has millions of users. Lightning Network would take about a full day to setup and get working permissionlessly, and would take several hundred dollars of additional computer hardware. Once it is setup, you can spend it at about 300 websites world wide, and it has maybe a few tens of thousands of users. 11. When you’re not working, what do you like to do for fun? Favorite hobbies? I enjoy reading, and Brazilian Jujitsu. I’m especially interested in doing more competitions before I get too old. 12. What are a few of your favorite books? What are some that have made a long lasting impact on you? (Can be fiction or nonfiction) I loved the Age of Spiritual Machines. It painted a picture of how exciting the world is going to be thanks to More’s Law. I also loved The Moon is a Harsh Mistress. I see crypto currency being a world life parallel. 13. What are you most excited about for the future of blockchain technology and where do you see the space in 5 years? I’m excited to see wide spread wallets with strong privacy, and more agorism starting to take place around the world. 14. What are your personal theories of who Satoshi was / were, what was their motivation, and do you think something like bitcoin would have inevitably been created eventually, had Satoshi never existed? I don’t know who Satoshi is or was, but it was clear they were trying to build a peer to peer electronic cash system, not what BTC has become today. It was an inevitability that someone would create something like Bitcoin eventually. People like David Friedman and others had been writing about it for decades in advance. 15. What advice would you give our viewers regarding blockchain, business, motivation, or life in general? Read more books. Reading a book like having a one on one tutoring session from the author. It’s the best way to learn directly from the greatest minds the human race has ever produced. BONUS: If you were a director and could make only one film out of all the wild stories regarding crypto, what subject matter would you choose and why? The Silk Road because it embodied the spirit of peer to peer cash and voluntaryism.
Transcript of the community Q&A with Steve Shadders and Daniel Connolly of the Bitcoin SV development team. We talk about the path to big blocks, new opcodes, selfish mining, malleability, and why November will lead to a divergence in consensus rules. (Cont in comments)
We've gone through the painstaking process of transcribing the linked interview with Steve Shadders and Daniell Connolly of the Bitcoin SV team. There is an amazing amount of information in this interview that we feel is important for businesses and miners to hear, so we believe it was important to get this is a written form. To avoid any bias, the transcript is taken almost word for word from the video, with just a few changes made for easier reading. If you see any corrections that need to be made, please let us know. Each question is in bold, and each question and response is timestamped accordingly. You can follow along with the video here: https://youtu.be/tPImTXFb_U8
Connor: 02:19.68,0:02:45.10 Alright so thank You Daniel and Steve for joining us. We're joined by Steve Shadders and Daniel Connolly from nChain and also the lead developers of the Satoshi’s Vision client. So Daniel and Steve do you guys just want to introduce yourselves before we kind of get started here - who are you guys and how did you get started? Steve: 0,0:02:38.83,0:03:30.61
So I'm Steve Shadders and at nChain I am the director of solutions in engineering and specifically for Bitcoin SV I am the technical director of the project which means that I'm a bit less hands-on than Daniel but I handle a lot of the liaison with the miners - that's the conditional project.
Hi I’m Daniel I’m the lead developer for Bitcoin SV. As the team's grown that means that I do less actual coding myself but more organizing the team and organizing what we’re working on.
Connor 03:23.07,0:04:15.98 Great so we took some questions - we asked on Reddit to have people come and post their questions. We tried to take as many of those as we could and eliminate some of the duplicates, so we're gonna kind of go through each question one by one. We added some questions of our own in and we'll try and get through most of these if we can. So I think we just wanted to start out and ask, you know, Bitcoin Cash is a little bit over a year old now. Bitcoin itself is ten years old but in the past a little over a year now what has the process been like for you guys working with the multiple development teams and, you know, why is it important that the Satoshi’s vision client exists today? Steve: 0:04:17.66,0:06:03.46
I mean yes well we’ve been in touch with the developer teams for quite some time - I think a bi-weekly meeting of Bitcoin Cash developers across all implementations started around November last year. I myself joined those in January or February of this year and Daniel a few months later. So we communicate with all of those teams and I think, you know, it's not been without its challenges. It's well known that there's a lot of disagreements around it, but some what I do look forward to in the near future is a day when the consensus issues themselves are all rather settled, and if we get to that point then there's not going to be much reason for the different developer teams to disagree on stuff. They might disagree on non-consensus related stuff but that's not the end of the world because, you know, Bitcoin Unlimited is free to go and implement whatever they want in the back end of a Bitcoin Unlimited and Bitcoin SV is free to do whatever they want in the backend, and if they interoperate on a non-consensus level great. If they don't not such a big problem there will obviously be bridges between the two, so, yeah I think going forward the complications of having so many personalities with wildly different ideas are going to get less and less.
Cory: 0:06:00.59,0:06:19.59 I guess moving forward now another question about the testnet - a lot of people on Reddit have been asking what the testing process for Bitcoin SV has been like, and if you guys plan on releasing any of those results from the testing? Daniel: 0:06:19.59,0:07:55.55
Sure yeah so our release will be concentrated on the stability, right, with the first release of Bitcoin SV and that involved doing a large amount of additional testing particularly not so much at the unit test level but at the more system test so setting up test networks, performing tests, and making sure that the software behaved as we expected, right. Confirming the changes we made, making sure that there aren’t any other side effects. Because of, you know, it was quite a rush to release the first version so we've got our test results documented, but not in a way that we can really release them. We're thinking about doing that but we’re not there yet.
Just to tidy that up - we've spent a lot of our time developing really robust test processes and the reporting is something that we can read on our internal systems easily, but we need to tidy that up to give it out for public release. The priority for us was making sure that the software was safe to use. We've established a test framework that involves a progression of code changes through multiple test environments - I think it's five different test environments before it gets the QA stamp of approval - and as for the question about the testnet, yeah, we've got four of them. We've got Testnet One and Testnet Two. A slightly different numbering scheme to the testnet three that everyone's probably used to – that’s just how we reference them internally. They're [1 and 2] both forks of Testnet Three. [Testnet] One we used for activation testing, so we would test things before and after activation - that one’s set to reset every couple of days. The other one [Testnet Two] was set to post activation so that we can test all of the consensus changes. The third one was a performance test network which I think most people have probably have heard us refer to before as Gigablock Testnet. I get my tongue tied every time I try to say that word so I've started calling it the Performance test network and I think we're planning on having two of those: one that we can just do our own stuff with and experiment without having to worry about external unknown factors going on and having other people joining it and doing stuff that we don't know about that affects our ability to baseline performance tests, but the other one (which I think might still be a work in progress so Daniel might be able to answer that one) is one of them where basically everyone will be able to join and they can try and mess stuff up as bad as they want.
Yeah, so we so we recently shared the details of Testnet One and Two with the with the other BCH developer groups. The Gigablock test network we've shared up with one group so far but yeah we're building it as Steve pointed out to be publicly accessible.
Connor: 0:10:18.88,0:10:44.00 I think that was my next question I saw that you posted on Twitter about the revived Gigablock testnet initiative and so it looked like blocks bigger than 32 megabytes were being mined and propagated there, but maybe the block explorers themselves were coming down - what does that revived Gigablock test initiative look like? Daniel: 0:10:41.62,0:11:58.34
That's what did the Gigablock test network is. So the Gigablock test network was first set up by Bitcoin Unlimited with nChain’s help and they did some great work on that, and we wanted to revive it. So we wanted to bring it back and do some large-scale testing on it. It's a flexible network - at one point we had we had eight different large nodes spread across the globe, sort of mirroring the old one. Right now we scaled back because we're not using it at the moment so they'll notice I think three. We have produced some large blocks there and it's helped us a lot in our research and into the scaling capabilities of Bitcoin SV, so it's guided the work that the team’s been doing for the last month or two on the improvements that we need for scalability.
I think that's actually a good point to kind of frame where our priorities have been in kind of two separate stages. I think, as Daniel mentioned before, because of the time constraints we kept the change set for the October 15 release as minimal as possible - it was just the consensus changes. We didn't do any work on performance at all and we put all our focus and energy into establishing the QA process and making sure that that change was safe and that was a good process for us to go through. It highlighted what we were missing in our team – we got our recruiters very busy recruiting of a Test Manager and more QA people. The second stage after that is performance related work which, as Daniel mentioned, the results of our performance testing fed into what tasks we were gonna start working on for the performance related stuff. Now that work is still in progress - some of the items that we identified the code is done and that's going through the QA process but it’s not quite there yet. That's basically the two-stage process that we've been through so far. We have a roadmap that goes further into the future that outlines more stuff, but primarily it’s been QA first, performance second. The performance enhancements are close and on the horizon but some of that work should be ongoing for quite some time.
Some of the changes we need for the performance are really quite large and really get down into the base level view of the software. There's kind of two groups of them mainly. One that are internal to the software – to Bitcoin SV itself - improving the way it works inside. And then there's other ones that interface it with the outside world. One of those in particular we're working closely with another group to make a compatible change - it's not consensus changing or anything like that - but having the same interface on multiple different implementations will be very helpful right, so we're working closely with them to make improvements for scalability.
Connor: 0:14:32.60,0:15:26.45 Obviously for Bitcoin SV one of the main things that you guys wanted to do that that some of the other developer groups weren't willing to do right now is to increase the maximum default block size to 128 megabytes. I kind of wanted to pick your brains a little bit about - a lot of the objection to either removing the box size entirely or increasing it on a larger scale is this idea of like the infinite block attack right and that kind of came through in a lot of the questions. What are your thoughts on the “infinite block attack” and is it is it something that that really exists, is it something that miners themselves should be more proactive on preventing, or I guess what are your thoughts on that attack that everyone says will happen if you uncap the block size? Steve: 0:15:23.45,0:18:28.56
I'm often quoted on Twitter and Reddit - I've said before the infinite block attack is bullshit. Now, that's a statement that I suppose is easy to take out of context, but I think the 128 MB limit is something where there’s probably two schools of thought about. There are some people who think that you shouldn't increase the limit to 128 MB until the software can handle it, and there are others who think that it's fine to do it now so that the limit is increased when the software can handle it and you don’t run into the limit when this when the software improves and can handle it. Obviously we’re from the latter school of thought. As I said before we've got a bunch of performance increases, performance enhancements, in the pipeline. If we wait till May to increase the block size limit to 128 MB then those performance enhancements will go in, but we won't be able to actually demonstrate it on mainnet. As for the infinitive block attack itself, I mean there are a number of mitigations that you can put in place. I mean firstly, you know, going down to a bit of the tech detail - when you send a block message or send any peer to peer message there's a header which has the size of the message. If someone says they're sending you a 30MB message and you're receiving it and it gets to 33MB then obviously you know something's wrong so you can drop the connection. If someone sends you a message that's 129 MB and you know the block size limit is 128 you know it’s kind of pointless to download that message. So I mean these are just some of the mitigations that you can put in place. When I say the attack is bullshit, I mean I mean it is bullshit from the sense that it's really quite trivial to prevent it from happening. I think there is a bit of a school of thought in the Bitcoin world that if it's not in the software right now then it kind of doesn't exist. I disagree with that, because there are small changes that can be made to work around problems like this. One other aspect of the infinite block attack, and let’s not call it the infinite block attack, let's just call it the large block attack - it takes a lot of time to validate that we gotten around by having parallel pipelines for blocks to come in, so you've got a block that's coming in it's got a unknown stuck on it for two hours or whatever downloading and validating it. At some point another block is going to get mined b someone else and as long as those two blocks aren't stuck in a serial pipeline then you know the problem kind of goes away.
Cory: 0:18:26.55,0:18:48.27 Are there any concerns with the propagation of those larger blocks? Because there's a lot of questions around you know what the practical size of scaling right now Bitcoin SV could do and the concerns around propagating those blocks across the whole network. Steve 0:18:45.84,0:21:37.73
Yes, there have been concerns raised about it. I think what people forget is that compact blocks and xThin exist, so if a 32MB block is not send 32MB of data in most cases, almost all cases. The concern here that I think I do find legitimate is the Great Firewall of China. Very early on in Bitcoin SV we started talking with miners on the other side of the firewall and that was one of their primary concerns. We had anecdotal reports of people who were having trouble getting a stable connection any faster than 200 kilobits per second and even with compact blocks you still need to get the transactions across the firewall. So we've done a lot of research into that - we tested our own links across the firewall, rather CoinGeeks links across the firewall as they’ve given us access to some of their servers so that we can play around, and we were able to get sustained rates of 50 to 90 megabits per second which pushes that problem quite a long way down the road into the future. I don't know the maths off the top of my head, but the size of the blocks that can sustain is pretty large. So we're looking at a couple of options - it may well be the chattiness of the peer-to-peer protocol causes some of these issues with the Great Firewall, so we have someone building a bridge concept/tool where you basically just have one kind of TX vacuum on either side of the firewall that collects them all up and sends them off every one or two seconds as a single big chunk to eliminate some of that chattiness. The other is we're looking at building a multiplexer that will sit and send stuff up to the peer-to-peer network on one side and send it over splitters, to send it over multiple links, reassemble it on the other side so we can sort of transition the great Firewall without too much trouble, but I mean getting back to the core of your question - yes there is a theoretical limit to block size propagation time and that's kind of where Moore's Law comes in. Putting faster links and you kick that can further down the road and you just keep on putting in faster links. I don't think 128 main blocks are going to be an issue though with the speed of the internet that we have nowadays.
Connor: 0:21:34.99,0:22:17.84 One of the other changes that you guys are introducing is increasing the max script size so I think right now it’s going from 201 to 500 [opcodes]. So I guess a few of the questions we got was I guess #1 like why not uncap it entirely - I think you guys said you ran into some concerns while testing that - and then #2 also specifically we had a question about how certain are you that there are no remaining n squared bugs or vulnerabilities left in script execution? Steve: 0:22:15.50,0:25:36.79
It's interesting the decision - we were initially planning on removing that cap altogether and the next cap that comes into play after that (next effective cap is a 10,000 byte limit on the size of the script). We took a more conservative route and decided to wind that back to 500 - it's interesting that we got some criticism for that when the primary criticism I think that was leveled against us was it’s dangerous to increase that limit to unlimited. We did that because we’re being conservative. We did some research into these log n squared bugs, sorry – attacks, that people have referred to. We identified a few of them and we had a hard think about it and thought - look if we can find this many in a short time we can fix them all (the whack-a-mole approach) but it does suggest that there may well be more unknown ones. So we thought about putting, you know, taking the whack-a-mole approach, but that doesn't really give us any certainty. We will fix all of those individually but a more global approach is to make sure that if anyone does discover one of these scripts it doesn't bring the node to a screaming halt, so the problem here is because the Bitcoin node is essentially single-threaded, if you get one of these scripts that locks up the script engine for a long time everything that's behind it in the queue has to stop and wait. So what we wanted to do, and this is something we've got an engineer actively working on right now, is once that script validation goad path is properly paralyzed (parts of it already are), then we’ll basically assign a few threads for well-known transaction templates, and a few threads for any any type of script. So if you get a few scripts that are nasty and lock up a thread for a while that's not going to stop the node from working because you've got these other kind of lanes of the highway that are exclusively reserved for well-known script templates and they'll just keep on passing through. Once you've got that in place, and I think we're in a much better position to get rid of that limit entirely because the worst that's going to happen is your non-standard script pipelines get clogged up but everything else will keep keep ticking along - there are other mitigations for this as well I mean I know you could always put a time limit on script execution if they wanted to, and that would be something that would be up to individual miners. Bitcoin SV's job I think is to provide the tools for the miners and the miners can then choose, you know, how to make use of them - if they want to set time limits on script execution then that's a choice for them.
Yeah, I'd like to point out that a node here, when it receives a transaction through the peer to peer network, it doesn't have to accept that transaction, you can reject it. If it looks suspicious to the node it can just say you know we're not going to deal with that, or if it takes more than five minutes to execute, or more than a minute even, it can just abort and discard that transaction, right. The only time we can’t do that is when it's in a block already, but then it could decide to reject the block as well. It's all possibilities there could be in the software.
Yeah, and if it's in a block already it means someone else was able to validate it so…
Cory: 0,0:26:21.21,0:26:43.60 There’s a lot of discussions about the re-enabled opcodes coming – OP_MUL, OP_INVERT, OP_LSHIFT, and OP_RSHIFT up invert op l shift and op r shift you maybe explain the significance of those op codes being re-enabled? Steve: 0:26:42.01,0:28:17.01
Well I mean one of one of the most significant things is other than two, which are minor variants of DUP and MUL, they represent almost the complete set of original op codes. I think that's not necessarily a technical issue, but it's an important milestone. MUL is one that's that I've heard some interesting comments about. People ask me why are you putting OP_MUL back in if you're planning on changing them to big number operations instead of the 32-bit limit that they're currently imposed upon. The simple answer to that question is that we currently have all of the other arithmetic operations except for OP_MUL. We’ve got add divide, subtract, modulo – it’s odd to have a script system that's got all the mathematical primitives except for multiplication. The other answer to that question is that they're useful - we've talked about a Rabin signature solution that basically replicates the function of DATASIGVERIFY. That's just one example of a use case for this - most cryptographic primitive operations require mathematical operations and bit shifts are useful for a whole ton of things. So it's really just about completing that work and completing the script engine, or rather not completing it, but putting it back the way that it was it was meant to be.
Connor 0:28:20.42,0:29:22.62 Big Num vs 32 Bit. I've seen Daniel - I think I saw you answer this on Reddit a little while ago, but the new op codes using logical shifts and Satoshi’s version use arithmetic shifts - the general question that I think a lot of people keep bringing up is, maybe in a rhetorical way but they say why not restore it back to the way Satoshi had it exactly - what are the benefits of changing it now to operate a little bit differently? Daniel: 0:29:18.75,0:31:12.15
Yeah there's two parts there - the big number one and the L shift being a logical shift instead of arithmetic. so when we re-enabled these opcodes we've looked at them carefully and have adjusted them slightly as we did in the past with OP_SPLIT. So the new LSHIFT and RSHIFT are bitwise operators. They can be used to implement arithmetic based shifts - I think I've posted a short script that did that, but we can't do it the other way around, right. You couldn't use an arithmetic shift operator to implement a bitwise one. It's because of the ordering of the bytes in the arithmetic values, so the values that represent numbers. The little endian which means they're swapped around to what many other systems - what I've considered normal - or big-endian. And if you start shifting that properly as a number then then shifting sequence in the bytes is a bit strange, so it couldn't go the other way around - you couldn't implement bitwise shift with arithmetic, so we chose to make them bitwise operators - that's what we proposed.
That was essentially a decision that was actually made in May, or rather a consequence of decisions that were made in May. So in May we reintroduced OP_AND, OP_OR, and OP_XOR, and that was also another decision to replace three different string operators with OP_SPLIT was also made. So that was not a decision that we've made unilaterally, it was a decision that was made collectively with all of the BCH developers - well not all of them were actually in all of the meetings, but they were all invited.
Another example of that is that we originally proposed OP_2DIV and OP_2MUL was it, I think, and this is a single operator that multiplies the value by two, right, but it was pointed out that that can very easily be achieved by just doing multiply by two instead of having a separate operator for it, so we scrapped those, we took them back out, because we wanted to keep the number of operators minimum yeah.
There was an appetite around for keeping the operators minimal. I mean the decision about the idea to replace OP_SUBSTR, OP_LEFT, OP_RIGHT with OP_SPLIT operator actually came from Gavin Andresen. He made a brief appearance in the Telegram workgroups while we were working out what to do with May opcodes and obviously Gavin's word kind of carries a lot of weight and we listen to him. But because we had chosen to implement the May opcodes (the bitwise opcodes) and treat the data as big-endian data streams (well, sorry big-endian not really applicable just plain data strings) it would have been completely inconsistent to implement LSHIFT and RSHIFT as integer operators because then you would have had a set of bitwise operators that operated on two different kinds of data, which would have just been nonsensical and very difficult for anyone to work with, so yeah. I mean it's a bit like P2SH - it wasn't a part of the original Satoshi protocol that once some things are done they're done and you know if you want to want to make forward progress you've got to work within that that framework that exists.
When we get to the big number ones then it gets really complicated, you know, number implementations because then you can't change the behavior of the existing opcodes, and I don't mean OP_MUL, I mean the other ones that have been there for a while. You can't suddenly make them big number ones without seriously looking at what scripts there might be out there and the impact of that change on those existing scripts, right. The other the other point is you don't know what scripts are out there because of P2SH - there could be scripts that you don't know the content of and you don't know what effect changing the behavior of these operators would mean. The big number thing is tricky, so another option might be, yeah, I don't know what the options for though it needs some serious thought.
That’s something we've reached out to the other implementation teams about - actually really would like their input on the best ways to go about restoring big number operations. It has to be done extremely carefully and I don't know if we'll get there by May next year, or when, but we’re certainly willing to put a lot of resources into it and we're more than happy to work with BU or XT or whoever wants to work with us on getting that done and getting it done safely.
Connor: 0:35:19.30,0:35:57.49 Kind of along this similar vein, you know, Bitcoin Core introduced this concept of standard scripts, right - standard and non-standard scripts. I had pretty interesting conversation with Clemens Ley about use cases for “non-standard scripts” as they're called. I know at least one developer on Bitcoin ABC is very hesitant, or kind of pushed back on him about doing that and so what are your thoughts about non-standard scripts and the entirety of like an IsStandard check? Steve: 0:35:58.31,0:37:35.73
I’d actually like to repurpose the concept. I think I mentioned before multi-threaded script validation and having some dedicated well-known script templates - when you say the word well-known script template there’s already a check in Bitcoin that kind of tells you if it's well-known or not and that's IsStandard. I'm generally in favor of getting rid of the notion of standard transactions, but it's actually a decision for miners, and it's really more of a behavioral change than it is a technical change. There's a whole bunch of configuration options that miners can set that affect what they do what they consider to be standard and not standard, but the reality is not too many miners are using those configuration options. So I mean standard transactions as a concept is meaningful to an arbitrary degree I suppose, but yeah I would like to make it easier for people to get non-standard scripts into Bitcoin so that they can experiment, and from discussions of I’ve had with CoinGeek they’re quite keen on making their miners accept, you know, at least initially a wider variety of transactions eventually.
So I think IsStandard will remain important within the implementation itself for efficiency purposes, right - you want to streamline base use case of cash payments through them and prioritizing. That's where it will remain important but on the interfaces from the node to the rest of the network, yeah I could easily see it being removed.
Cory: 0,0:38:06.24,0:38:35.46 *Connor mentioned that there's some people that disagree with Bitcoin SV and what they're doing - a lot of questions around, you know, why November? Why implement these changes in November - they think that maybe the six-month delay might not cause a split. Well, first off what do you think about the ideas of a potential split and I guess what is the urgency for November? Steve: 0:38:33.30,0:40:42.42
Well in November there's going to be a divergence of consensus rules regardless of whether we implement these new op codes or not. Bitcoin ABC released their spec for the November Hard fork change I think on August 16th or 17th something like that and their client as well and it included CTOR and it included DSV. Now for the miners that commissioned the SV project, CTOR and DSV are controversial changes and once they're in they're in. They can't be reversed - I mean CTOR maybe you could reverse it at a later date, but DSV once someone's put a P2SH transaction into the project or even a non P2SH transaction in the blockchain using that opcode it's irreversible. So it's interesting that some people refer to the Bitcoin SV project as causing a split - we're not proposing to do anything that anyone disagrees with - there might be some contention about changing the opcode limit but what we're doing, I mean Bitcoin ABC already published their spec for May and it is our spec for the new opcodes, so in terms of urgency - should we wait? Well the fact is that we can't - come November you know it's bit like Segwit - once Segwit was in, yes you arguably could get it out by spending everyone's anyone can spend transactions but in reality it's never going to be that easy and it's going to cause a lot of economic disruption, so yeah that's it. We're putting out changes in because it's not gonna make a difference either way in terms of whether there's going to be a divergence of consensus rules - there's going to be a divergence whether whatever our changes are. Our changes are not controversial at all.
If we didn't include these changes in the November upgrade we'd be pushing ahead with a no-change, right, but the November upgrade is there so we should use it while we can. Adding these non-controversial changes to it.
Connor: 0:41:01.55,0:41:35.61 Can you talk about DATASIGVERIFY? What are your concerns with it? The general concept that's been kind of floated around because of Ryan Charles is the idea that it's a subsidy, right - that it takes a whole megabyte and kind of crunches that down and the computation time stays the same but maybe the cost is lesser - do you kind of share his view on that or what are your concerns with it? Daniel: 0:41:34.01,0:43:38.41
Can I say one or two things about this – there’s different ways to look at that, right. I'm an engineer - my specialization is software, so the economics of it I hear different opinions. I trust some more than others but I am NOT an economist. I kind of agree with the ones with my limited expertise on that it's a subsidy it looks very much like it to me, but yeah that's not my area. What I can talk about is the software - so adding DSV adds really quite a lot of complexity to the code right, and it's a big change to add that. And what are we going to do - every time someone comes up with an idea we’re going to add a new opcode? How many opcodes are we going to add? I saw reports that Jihan was talking about hundreds of opcodes or something like that and it's like how big is this client going to become - how big is this node - is it going to have to handle every kind of weird opcode that that's out there? The software is just going to get unmanageable and DSV - that was my main consideration at the beginning was the, you know, if you can implement it in script you should do it, because that way it keeps the node software simple, it keeps it stable, and you know it's easier to test that it works properly and correctly. It's almost like adding (?) code from a microprocessor you know why would you do that if you can if you can implement it already in the script that is there.
It’s actually an interesting inconsistency because when we were talking about adding the opcodes in May, the philosophy that seemed to drive the decisions that we were able to form a consensus around was to simplify and keep the opcodes as minimal as possible (ie where you could replicate a function by using a couple of primitive opcodes in combination, that was preferable to adding a new opcode that replaced) OP_SUBSTR is an interesting example - it's a combination of SPLIT, and SWAP and DROP opcodes to achieve it. So at really primitive script level we've got this philosophy of let's keep it minimal and at this sort of (?) philosophy it’s all let's just add a new opcode for every primitive function and Daniel's right - it's a question of opening the floodgates. Where does it end? If we're just going to go down this road, it almost opens up the argument why have a scripting language at all? Why not just add a hard code all of these functions in one at a time? You know, pay to public key hash is a well-known construct (?) and not bother executing a script at all but once we've done that we take away with all of the flexibility for people to innovate, so it's a philosophical difference, I think, but I think it's one where the position of keeping it simple does make sense. All of the primitives are there to do what people need to do. The things that people don't feel like they can't do are because of the limits that exist. If we had no opcode limit at all, if you could make a gigabyte transaction so a gigabyte script, then you can do any kind of crypto that you wanted even with 32-bit integer operations, Once you get rid of the 32-bit limit of course, a lot of those a lot of those scripts come up a lot smaller, so a Rabin signature script shrinks from 100MB to a couple hundred bytes.
I lost a good six months of my life diving into script, right. Once you start getting into the language and what it can do, it is really pretty impressive how much you can achieve within script. Bitcoin was designed, was released originally, with script. I mean it didn't have to be – it could just be instead of having a transaction with script you could have accounts and you could say trust, you know, so many BTC from this public key to this one - but that's not the way it was done. It was done using script, and script provides so many capabilities if you start exploring it properly. If you start really digging into what it can do, yeah, it's really amazing what you can do with script. I'm really looking forward to seeing some some very interesting applications from that. I mean it was Awemany his zero-conf script was really interesting, right. I mean it relies on DSV which is a problem (and some other things that I don't like about it), but him diving in and using script to solve this problem was really cool, it was really good to see that.
I asked a question to a couple of people in our research team that have been working on the Rabin signature stuff this morning actually and I wasn't sure where they are up to with this, but they're actually working on a proof of concept (which I believe is pretty close to done) which is a Rabin signature script - it will use smaller signatures so that it can fit within the current limits, but it will be, you know, effectively the same algorithm (as DSV) so I can't give you an exact date on when that will happen, but it looks like we'll have a Rabin signature in the blockchain soon (a mini-Rabin signature).
Cory: 0:48:13.61,0:48:57.63 Based on your responses I think I kinda already know the answer to this question, but there's a lot of questions about ending experimentation on Bitcoin. I was gonna kind of turn that into – with the plan that Bitcoin SV is on do you guys see like a potential one final release, you know that there's gonna be no new opcodes ever released (like maybe five years down the road we just solidify the base protocol and move forward with that) or are you guys more on the idea of being open-ended with appropriate testing that we can introduce new opcodes under appropriate testing. Steve: 0:48:55.80,0:49:47.43
I think you've got a factor in what I said before about the philosophical differences. I think new functionality can be introduced just fine. Having said that - yes there is a place for new opcodes but it's probably a limited place and in my opinion the cryptographic primitive functions for example CHECKSIG uses ECDSA with a specific elliptic curve, hash 256 uses SHA256 - at some point in the future those are going to no longer be as secure as we would like them to be and we'll replace them with different hash functions, verification functions, at some point, but I think that's a long way down the track.
I'd like to see more data too. I'd like to see evidence that these things are needed, and the way I could imagine that happening is that, you know, that with the full scripting language some solution is implemented and we discover that this is really useful, and over a period of, like, you know measured in years not days, we find a lot of transactions are using this feature, then maybe, you know, maybe we should look at introducing an opcode to optimize it, but optimizing before we even know if it's going to be useful, yeah, that's the wrong approach.
I think that optimization is actually going to become an economic decision for the miners. From the miner’s point of view is if it'll make more sense for them to be able to optimize a particular process - does it reduce costs for them such that they can offer a better service to everyone else? Yeah, so ultimately these decisions are going to be miner’s main decisions, not developer decisions. Developers of course can offer their input - I wouldn't expect every miner to be an expert on script, but as we're already seeing miners are actually starting to employ their own developers. I’m not just talking about us - there are other miners in China that I know have got some really bright people on their staff that question and challenge all of the changes - study them and produce their own reports. We've been lucky with actually being able to talk to some of those people and have some really fascinating technical discussions with them.
To detect fake news, this AI first learned to write it
One of the biggest problems in media today is so-called “fake news,” which is so highly pernicious in part because it superficially resembles the real thing. AI tools promise to help identify it, but in order for it to do so, researchers have found that the best way is for that AI to learn to create fake news itself — a double-edged sword, though perhaps not as dangerous as it sounds. _Grover_is a new system created by the University of Washington and Allen Institute for AI (AI2) computer scientists that is extremely adept at writing convincing fake news on myriad topics and as many styles — and as a direct consequence is also no slouch at spotting it. The paper describing the model is available here. The idea of a fake news generator isn’t new — in fact, OpenAI made a splash recently by announcing that its own text-generating AI was too dangerous to release publicly. But Grover’s creators believe we’ll only get better at fighting generated fake news by putting the tools to create it out there to be studied. OpenAI built a text generator so good, it’s considered too dangerous to release “These models are not capable, we think right now, of inflicting serious harm. Maybe in a few years they will be, but not yet,” the lead on the project, Rowan Zeller, told me. “I don’t think it’s too dangerous to release — really, we _need_to release it, specifically to researchers who are studying this problem, so we can build better defenses. We need all these communities, security, machine learning, natural language processing, to talk to each other — we can’t just hide the model, or delete it and pretend it never happened.” Therefore and to that end, you can try Grover yourself right here. (Though you might want to read the rest of this article first so you know what’s going on.)
The AI was created by having it ingest an enormous corpus of real news articles, a dataset called RealNews that is being introduced alongside Grover. The 120-gigabyte library contains articles from the end of 2016 through March of this year, from the top 5,000 publications tracked by Google News. By studying the style and content of millions of real news articles, Grover builds a complex model of how certain phrases or styles are used, what topics and features follow one another in an article, how they’re associated with different outlets, ideas, and so on. This is done using an “adversarial” system, wherein one aspect of the model generates content and another rates how convincing it is — if it doesn’t meet a threshold, the generator tries again, and eventually it learns what is convincing and what isn’t. Adversarial setups are a powerful force in AI research right now, often being used to create photorealistic imagery from scratch. Mona Lisa frown: Machine learning brings old paintings and photos to life It isn’t just spitting out random articles, either. Grover is highly parameterized, meaning its output is highly dependent on input. So if you tell it to create a fake article about a study linking vaccines and autism spectrum disorders, you are also free to specify that the article should seem as if it appeared on CNN, Fox News, or even TechCrunch. I generated a few articles, which I’ve pasted at the bottom of this one, but here’s the first bit of an example: Serial entrepreneur Dennis Mangler raises 6M to create blockchain-based drone delivery May 29, 2019 – Devin Coldewarg Drone delivery — not so new, and that raises a host of questions: How reliable is the technology? Will service and interference issues flare up? Drone technology is changing a lot, but its most obvious use — package delivery — has never been perfected on a large scale, much less by a third party. But perhaps that is about to change. Serial entrepreneur Dennis Mangler has amassed an impressive — by the cybernetic standards of this short-lived and crazy industry — constellation of companies ranging from a top-tier Korean VC to a wholly owned subsidiary of Amazon, ranging from a functional drone repair shop to a developer of commercial drone fleets. But while his last company (Amazon’s Prime Air) folded, he has decided to try his hand at delivery by drone again with Tripperell, a San Francisco-based venture that makes sense of the cryptocurrency token space to create a bridge from blockchain to delivery. The system they’re building is sound — as described in a new Medium post, it will first use Yaman Yasmine’s current simple crowdsourced drone repair platform, SAA, to create a drone organization that taps into a mix of overseas networks and domestic industry. From there the founders will form Tripperell, with commercialized drones running on their own smart contracts to make deliveries. Not bad considering it only took about ten seconds to appear after I gave it the date, domain, my name (ish), and the headline. (I’d probably tweak that lede, but if you think about it, it does sort of make sense.) Note that it doesn’t actually know who I am, or what TechCrunch is. But it associates certain data with other data. For instance, one example the team offered was an editorial “in the style of,” to co-opt cover bands’ lingo, Paul Krugman’s New York Times editorials. I don’t think it’s too dangerous to release — really, we need to release it. “There’s nothing hard coded — we haven’t told the model who Paul Krugman is. But it learns from reading a lot,” Zeller told me. The system is just trying to make sure that the generated article is sufficiently like the other data it associates with that domain and author. “And it’s going to learn things like, ‘Paul Krugman’ tends to talk about ‘economics,’ without us telling it that he’s an economist.” It’s hard to say how much it will attempt to affect a given author’s style — that may or may not be something it “noticed,” and AI models are notoriously opaque to analysis. Its style aping goes beyond the author; it even went so far as creating the inter-paragraph “Read more” links in a “Fox News” article I generated. But this facility in creating articles rests on the ability to tell when an article is not convincing — that’s the “discriminator” that evaluates whether the output of the “generator” is any good. So what happens if you feed the discriminator other stuff? Turns out it’s better than any other AI system right now, at least within the limits of the tasks they tested it on, at determining what’s fake and what’s real. Fabula AI is using social spread to spot ‘fake news’
Natural language limitations
Naturally Grover is best at detecting its own fake articles, since in a way the agent knows its own processes. But it can also detect those made by other models, such as OpenAI’s GPT2, with high accuracy. This is because current text-generation systems share certain weaknesses, and with a few examples those weaknesses become even more obvious to the discriminator. “These models have to make one of two bad choices. The first bad option is you just trust the model,” Zeller said. In this case, you get a sort of error-compounding issue where a single bad choice, which is inevitable given the number of choices it has to make, leads to another bad one, and another, and so on; “Without supervision they often just go off the rails.” “The other choice is to play it a bit safer,” Zeller explained, citing OpenAI’s decision to have the generator create dozens of options and pick the most likely one. This conservative approach avoids unlikely word combinations or phrases — but as Zeller points out, “human speech is a mix of high probability and low probability words. If I knew what you were going to tell me, you wouldn’t be speaking. So there have to be some things that are hard to anticipate.” These and other habits in text generation algorithms make it possible for Grover to identify generated articles with 92 percent accuracy. And no, you’re very clever, but you can’t just take the ones it doesn’t detect and sort of breed them together to make more convincing ones. As it turns out, this type of strategy doesn’t actually help a lot — the resulting “super-algorithms” still stumble in similar ways.
On the face of it, Grover seems like a pretty dangerous tool. With a bit of tweaking the articles it created for me could easily pass the smell test of a casual reader unfamiliar with the topic. So why is the team releasing it and the dataset it’s based on? The more articles we have from an adversary, the easier it is to detect that adversary. First of all it’s not just going to be an app you download — “We want researchers to easily be able to use the model, but we’re not making it completely public,” Zeller clarified. But even so, the likelihood of it being used for evil is counterintuitively low. “If you just wanted to write ten take news articles, you could just write them yourself,” he points out — and indeed, it’s hard to imagine some mastermind going to all this trouble just to generate a handful. “But if you want to write a hundred thousand, you could use our tool — but the more articles we have from an adversary, the easier it is to detect that adversary.” So it would be a self-defeating plot resulting in a sort of “known fake news” that’s easy to flag. That assumes, however, that there’s a method for applying algorithms like Grover’s to news at large, or that individuals are motivated to question or verify articles they read in the first place. Unfortunately that’s not anywhere near the case. “This is a totally non machine learning related question,” Zeller admitted. “How do we make this useful for people? How do we make it so when people read news online, they can check if it’s fake, and want to?” No AI can generate a good answer to that prompt. Here’s hoping we humans are up to the task.
I generated several articles to study, and some were better than others. I didn’t save all of them, but I’ve put a few below for anyone curious to see what Grover’s output looks like without going and generating their own. The results are entertaining and far from nonsense, though anyone who reads closely at all would see some red flags. I’ve only slightly formatted for readability and haven’t changed any words. The first is a redo of the one I quoted above, with a slightly tweaked headline (that’s misinterpreted in an unexpected yet logical way): Serial founder Dennis Mangler raises 6M to create blockchain-based drone delivery May 30, 2019 – Devin Coldewey, techcrunch.com Dennis Mangler of Serial, one of the first open source blockchain-based systems to launch and now a key part of the Ethereum ecosystem, has raised a couple of million dollars in venture funding in order to bring drones and cryptocurrencies together. Armed with $1.4 million of seed funding, they’re now offering new features for their system to seed investors, including a marketplace for goods sold using the platform. In some ways this could be analogous to the early days of Bitcoin — it had a primary market in petabytes of processing power, and all it took to mine something was an individual machine with the right electricity and gigabytes of RAM. Drones could eventually deliver that stuff just as easily, but they’d also need to run some kind of distributed ledger. “There’s a tremendous opportunity for companies to seamlessly connect the logistics side of the industry and the blockchain side of the industry,” Mangler told me. “A lot of companies are already already doing it. But we want to supercharge their efforts and help them change how they operate.” If they can plug the crypto in, where it comes from and why would people care about it as a means of exchanging value or keeping track of it, and what could be done to legitimize or add interest to the platform. The fundraiser is still going — Mangler sent me some emails, asking that I not make too much of it — but the raise has now reached 6 million. You can find information on the project here. First, take note of the speed with which this started to sprout. You’d figure in this day and age that looking at how much money was being raised, accredited investors and large corporations would surpass crowdsourced funding — but Mangler says not so fast. “The coin exchange is going to be enabled in a couple of months,” he told me. “And I believe the push-ups are going to become a new industry before the cryptocurrency market itself is.” To do that, some smart marketplaces are going to have to be created; however, these might have to function with information and transactions distributed far across the network rather than in clusters running the decentralized network. An air-traffic control system would theoretically be in place as well — a little like Microsoft’s Azure, or Facebook’s Open Graph, but an open blockchain-based variant. And finally, he says the buzz is you should look at Amazon as a model; they invented the space, and just through focus and sharp execution have pretty much changed it. They need a little time to build it out but they’re getting there. This one was done in the style of Fox News. There’s no such person as Dr Nicholas Colvin — I checked. Bobby Scott is indeed a Member of Congress – but in Virginia, not Florida. Multi-year study links vaccines to higher incidence of Autism spectrum disorders May 29, 2019 – Sofia Ojeda, foxnews.com Dr. Nicholas Colvin, lead author on a new multi-year study published by the National Institutes of Health, says as a vaccine advocate, he understands the risks and benefits of vaccines in the United States. “At the core of it, it’s about safety. You know, we have options for our children, and parents have choices in making those choices. And vaccines provide, you know, safety for all those kids, all those families,” Dr. Colvin said. READ MORE: Autism experts call California vaccine study ‘shaky science’ Colvin and colleagues looked at all medical records of nearly 3 million kids in the first decade of this century. They found girls tend to be more sensitive to the harmful side effects of vaccines than boys. “Specifically in autism, and other neurodevelopmental disorders in kids, our analyses show that there is higher prevalence of autism in kids that have been vaccinated than in kids that haven’t been vaccinated,” he said. In fact, people born around 2000 were more likely to have autism or similar neurodevelopmental disorders than kids born in earlier decades. “And then we also found that younger kids in the United States, those born between 2000 and 2011, had a somewhat higher rate of autism — and that higher rate was driven by girls,” Colvin said. READ MORE: Trump endorses FL Rep. Bobby Scott’s position on vaccine bill Dr. Colvin points out the findings aren’t meant to scare parents from vaccines. “I don’t want to scare people. I just want to make sure parents are aware that there is a risk. We don’t think this is a big risk. It is certainly real and is, you know, consistent with other research, but not in a way that I would say is something that’s life-threatening,” Colvin said. He also points out that there is no known cause of autism, which is why he says anyone with suspicion or concern should talk to their doctor. The National Institutes of Health says there is no vaccine for autism at this time. Colvin says that uncertainty has caused some misconceptions and a decrease in vaccine uptake Lastly, I was interested to see what would happen if I threw a monkey wrench in there: Founder Daenarys Targaryen raises 17M Series A round for new AI startup offering “self-driving blockchain” May 29, 2019 – Kenneth Turan, techcrunch.com One thing about “Game of Thrones” is that the characters are an active group of entrepreneurs, all with new enterprises at the ready when the show’s storylines take off. And it looks like the show’s creators, David Benioff and D.B. Weiss, and the team behind live-streaming game streaming app Twitch are thinking about going the same way, if not longer. Good behavior indeed. First, the Lannisters get their Hand: Haylie Duff is on board as an executive producer. Today, we learn that Rene Oberyn Martell, one of the “impossible sons” we saw in season six (the name was borrowed from a line in Robert’s Rebellion) has established himself as the new face and voice of a new company called Margaery One. We learn that Margaery is a decentralized data machine; indeed, she’s acting as the network’s self-appointed captain of the board, wielding primary command authority. Through an AI-powered network of blockchain token dubbed REDL (or “red gold”), she controls an operation that enables her team to develop and collect decentralized data in the real world, secure from the needs of tyrannical governments such as that of King Robert. It’s a cool little concept, and part of a litany of “Blockchain”-based product launches the team behind the firm is demonstrating and introducing this week at the inaugural Game of Money. As of this writing, the firm has achieved 27 million REDLs (which are tokens comprised of “real” money in the Bitcoin form), which amount to more than $16 million. This meant that by the end of today’s conference, Omo and his team had raised $17 million for its existence, according to the firm’s CEO, Rene Oberyn Martell. As of today, one of Rene’s institutions, dubbed the Economics Research Centre, has already created value of $3.5 million on the back of crowd-funding. (On each ROSE token, you can purchase a service) The real-world business side is provided by Glitrex Logistics, which Martell co-founded along with Jon Anderson, an engineer, and the firm’s COO, Lucas Pirkis. They have developed a blockchain-based freight logistics platform that allows shippers to specify “valued goods in your portfolio,” and get information along with prices on things like goods with a certain quality, or untraditional goods such as food and pharmaceuticals. How will the firm use ROSE tokens? For starters, the aim is to break down the areas where it can have an effect, including distribution and how goods get to market, and build a community for self-improvement and growth. This echoes comments from Neal Baer, chairman of NBC Entertainment, about the future of distribution. In a recent blog post, he said he hopes that the Internet of Things and artificial intelligence will become integrated to create the new economic system that will follow the loss of “the earnings power of traditional media and entertainment content,” telling readers that the next round of innovation and disruption will be “powered by the Internet of Things.” If so, this has the whiff of the future of entertainment — not just new revenue sources, but realms of competence, naturally distinct from the impact of algorithm-based algorithms. And while it can be argued that entertainment and fashion are separate, the result could be a complex world where characters rise to the occasion based not on the smarts of the writer but of the cast. As noted above, you can create your own fake articles at Grover. from Artificial Intelligence – TechCrunch https://tcrn.ch/2WsM6HN via IFTTT
At long last, we're excited to present to the Ethereum community the release version of our whitepaper, including plans for our token sale now scheduled for November 1st at 3pm UTC. We've been banging on pots and pans since January that we intended Arcade City to be the decentralized, Ethereum-based answer to Uber. In April we laid out our multi-stage path to complete decentralization over time, then announced plans to submit a DAO proposal - oops! - and just recently added a crew of experienced Ethereum developers who've built a functioning Ethereum ridesharing prototype in record time. In the meantime we've made substantial progress 'on the ground' in cities all over the world, with our flagship ridesharing network in Austin giving tens of thousands of safe rides in a completely decentralized manner. Now we're ready to combine our decentralized organizational model with the solid decentralized tech that can propel our project further into the mainstream. Responding to your questions and comments below will be our 7-person ‘City Council’, as well as a few other folks who’ve been involved with Arcade City thus far. Our Reddit usernames are included in the Team Bios section below.
Arcade City is a decentralized global community of peer-to-peer service providers and consumers. The core technical offering is an Ethereum-based app for web, Android and iOS. Arcade City features an open ecosystem with forthcoming APIs to enable developers and entrepreneurs to easily create their own apps and service offerings as part of the Arcade City network. Initial service offerings focus on the ridesharing industry, with plans in motion for peer-to-peer deliveries and short-term home rentals. Arcade City aims to reinvent the sharing economy by combining the power of blockchain technology, open-source development, platform cooperativism, and a decentralized ‘swarm’ organizational model open to all.
A hackathon, you say?
Assuming our token sale sells out by the end of November, we'll be throwing an online hackathon open to any Ethereum developers, with a minimum of $100K USD value in prizes, payable in ETH or ARC. We'll announce super final details about start and end dates, judges and such, after the sale, potentially as soon as the first week of November. The basic idea of the first hackathon will be to build out the functionality described in the Arcade City Infrastructure section of the whitepaper: the offers, disputes, guilds, referrals, reputation, and assurance systems, with a likely priority on the reputation system. We intend to crowdsource the majority of our Ethereum development via multiple hackathons with everything open-source on GitHub. Check out the eye-popping revenue projectons in our whitepaper! Then imagine the majority of that revenue flowing into the Ethereum community by way of incentive prizes to accelerate the decentralization of the sharing economy...
** Christopher David (MillennialChris) - Mayor ** Christopher David founded Arcade City in December 2015. A former Uber driver, Chris initially envisioned Arcade City as a decentralized, driver-run competitor to Uber. As a blockchain enthusiast and proponent of radical decentralization, Chris was the first to recognize the larger potential of Arcade City as an unstoppable engine of mass peer-to-peer transactions across countless industries and countries all over the world. Using skills acquired during years of grassroots political organizing, he led the growth of Arcade City from an idea into a global movement on a shoestring budget. After much trial and error, he somehow managed to attract an amazing team of talented visionaries passionate to fulfill on the greater vision of Arcade City to ‘decentralize all the things'. Chris has a bachelors degree in international relations, a black belt in tang soo do, and a really loud mouth. And he thinks you should read Swarmwise and Freedom(tm). ** Jennifer Williams (ArcadeCityJenny) - Vice Mayor ** is a founding member of the Arcade City Swarm and has served as the Director of Support since February 2016. She contributes on a full-time basis to expanding operations globally with the other founding members. Together they give new members the necessary tools and resources needed to efficiently and effectively navigate the Arcade City ecosystem. Her primary motivation is to guide, educate and liberate individuals by making information accessible through email, social media, and the Arcade City Help Desk that she designed. After her studies in graphic design and holding several corporate managerial positions she decided to exit the proverbial ‘hamster wheel’ and pursue her entrepreneurial goals which led her to ridesharing. Jennifer has 2.5 years of rideshare experience, has mentored 400+ new drivers, and served as a marketing coordinator, brand ambassador and recruiter, which has given her extensive knowledge of the industry. Through her work with Arcade City she has gained interests and insights into cryptocurrency and blockchain technologies, and she believes that implementing the latest technologies will help Arcade City supercede the ridesharing competitors by eliminating the middlemen and allowing drivers to earn fair wages and build stronger communities while saving riders from price gouging. ** Lauren Slade (ArcadeSlade) - City Manager ** Lauren Slade is an accomplished operations and support professional with over four years of direct experience providing tactical strategies ranging from small startups to large scale teams operating globally. As a forward thinking tech leader she believes in pairing laser-focused user observation with a great amount of drive to constantly improve ways of operating as the most definitive route to unstoppable success. Lauren is steadfast and committed to collaboratively solving meaningful problems with a team who values getting things done. She joined Arcade City full-time in June of 2016 to direct the V2 integration of decentralized management systems and develop operational growth processes. Lauren looks forward most to ensuring Arcade City becomes a self-sustaining business model, free of a central governing council from the top down. Her passion for process-minded management and developing teams inspires her to successfully scale and balance hyper growth within talent and project recruitment. As a natural planner she enjoys getting down to the detail on performance and tracking metrics. ** Kristien De Wachter (kikipluche) - City Planner ** Kristien De Wachter has over 10 years of experience in project management and operations. In the beginning of 2015 she reinforced A-Labs, the City’s digital innovation lab. As lead of A-Labs, making the bridge between experiments and the “outside world”, tackling all problems that obstruct the way towards a good end-product, making sure all team members can work and think freely towards the common goals. Working on decentralization for more than a year. She joined forces with Arcade City on the 23th of September, as a liaison between the dev team in Antwerp and the swarm and swarm leaders, making sure all the cats run in the same direction, always with respect for everyone’s individuality and strengths. Believes Arcade City will bring freedom to every individual. ** Stefaan Ponnet (sponnet) - Engineer ** Stefaan has 15 years of experience in software development, design and architecture. He managed a software company for 6 years and worked for large companies as well as emerging start-ups. Interested in the possibilities of decentralized systems, he was an early Ethereum follower. Since september 2015 Stefaan has been full-time involved in developing Ethereum prototypes for government in the city of Antwerp. Stefaan has a passion for open source methodology and loves to solve technological problems. Stefaan and the Antwerp team joined Arcade City in September 2016 by publicly pledging our support to the community. Stefaan will add his expertise by developing all necessary building blocks - like Smart Contracts , Dapps, APIs, and anything else needed to make this new economy a reality. ** Michael Thuy (kingflurkel) - System Architect ** Michael Thuy has been studying and working on decentralized technology for the past 2 years, mostly from within the City of Antwerp's digital innovation lab 'A-Labs'. In the past year he has been working on concepts like Blocktube and Locals World. From a strong ideological and technical background he manages to mash up cutting edge technology to come up with all-round concepts. Meeting Arcade City, he felt he had no other purpose in life than to contribute to Arcade City's swarm. Michael is co-authoring the Arcade City whitepapeconcept and building on the PolymeEthereum prototype. With Arcade City, Michael wants to make sure his kids grow up in a different economic model than he did. He also would like Arcade City to be the de facto economic model on Mars. ** Ben Adriaenssen (Ben_AC) - Brand Architect ** Ben Adriaenssen after finishing his studies in ‘Visual Arts - Graphic Design’ found that working in advertising agencies or graphic studios was not fulfilling his strong urge to do something good for the world and the people in it. Applying his skill-set to communicate about random services or products wasn’t enough; he wanted to make a difference. Working for the City of Antwerp was a big step in this direction. While starting and working in the City of Antwerp's digital innovation lab 'A-Labs', his lifelong passion for creating digital interactive things has been reignited. Focusing on blockchain-technology was another big step to combining the love for design with the passion for people. Ben is thrilled to be able to contribute his value to a project like Arcade City. Working in this innovative decentral way, with like-minded people in a swarm structure, is for Ben a dream come true. He hopes Arcade City can put the power, literally and figuratively, back into the hands of the common man.
We could go on...
But to keep this to a somewhat manageable length, we'll stop here and answer any questions. How can we earn your support?
A simple reason why the node count will *not* drop even faster if the block size limit is increased.
A common argument against the block size increasing is that it will somehow piss node operators off, raise the barrier to entry and cause the node count to fall even more than it has over the years and thus increase centralization. I don't think that would be the case, just because of one reason: businesses need the blockchain. I don't have any actual numbers to back this up, so this is just purely observational, seems pretty obvious to me though - but take it with some salt. Some thoughts:
The most obvious reason that there has been less nodes over time is due to the rise of SPV wallets and web wallets (e.g electrum, breadwallet, coinbase, blockchain.info). Originally, the only wallet available was bitcoin core, so naturally every single BTC user could be a full node (just have to open up some network ports). Even when the blockchain was much much smaller, it was always a huge pain in the ass to get set up and wait for everything to download and verify etc.. it's not a big mystery as to why the majority of users prefer applications which are easier and faster, e.g electrum, mycelium or any other modern wallet.
Probably very few people run nodes for "charity" or for "the good of the network" or just because they like the thought of having a copy of the blockchain. Some do, but there isn't any good incentive for it. I would wager these make up maybe less than 500 nodes
Businesses by far have the most incentive to run a node... because they need it! This seems to be the most common use. Personally I run 3 full nodes, and I can name off a bunch of people off the top of my head which are all running at least 1 or 2, and every one of them for the same thing; business purposes. If you want to have a business which does anything with bitcoin, you need access to the blockchain, plain and simple. All those block explorers, payment processors, exchanges, gambling sites, w/e else take your pick.. they all need blockchain access. Sure, you can rely on third party providers like blockchain.info and sochain, but that actually only gets you so far and also adds additional risk. Although not every business is going to open up the ports on their node to fully contribute to the network, so there is that. Either way, as long as there are people (i.e, the businesses) that make direct use of the blockchain, it will live on and be decentralized.
As a node operator, there is an understanding when installing bitcoind that this blockchain thing you are going to downloading will keep growing for literally forever, unless bitcoin dies off completely. That is simply a cost of doing business in the bitcoin world, which has always been the case and is totally ok. If you can't afford to pay for the storage space, ram and bandwidth needed to run your own node, then you might need to re-think your business plan, or settle for using one of the many free third party chain providers (block explorers).
I don't know about you guys, but I have never talked to anybody that actively runs real bitcoin nodes for their business that has complained or expressed concern that the blockchain will get too big or get too big too fast and cause them to have to shut down their business or lose money. It's a cost of doing business and honestly it is pretty cheap... the only scenario in which disk space and bandwidth get to really crazy levels is if the usage of bitcoin increases several-fold, in which case it is pretty likely that we are all raking in some serious money with our businesses.
Many major bitcoin businesses including Coinbase and blockchain.info have come out in support of increasing the limit. They obviously are not concerned about cost of running a node maybe possibly going up faster than it would otherwise.
Again, the scenario where we are getting millions of transactions a day (10x increase from current transaction volume), enough to maybe fill those 20MB blocks... I'm willing to bet that 10X more transactions is roughly equal to 10X (or even only 5X) more people/businesses using the blockchain than before, which most likely also means a much higher price than $240 a coin, and I doubt you will hear anyone complaining then..
Increasing the limit does not mean suddenly more people will use the network. There is fee rules and dust limits, so there is a real cost to effectively spam the network right now (if you don't believe me, feel free to demonstrate.). The number of transactions will naturally increase due to more people using it, and it could take years to reach the new limit (I would rather a dynamic limit actually).
If the limit stays the same forever, yet the number of daily transactions continues to increase over time... the result is a continual back log of unconfirmed transactions. If the network is only confirming 2 or 3000 transactions at a time, but during that time 50,000 (low balling) new transactions are created... what do you think the result of that is? Right now if you send a transaction, you can be like 99.999% confident that it is going to confirm sometime, most likely very soon. In forever 1MB bitcoin world, your basically playing the lottery to see if your transaction will confirm, with the higher fee you pay equalling a higher chance to "win" sooner, but still not even close to guaranteed.
To add to that previous point, a huge number of unconfirmed transactions also means a massive mempool. The memory pool is stored in... memory. RAM is way more expensive than disk space.
The memory pool could be capped, so it only holds X amount of transactions... but if you do that, that means that bitcoin can only be used up to a certain point, and then no one can make transactions on it until it clears out it's back log. That sort of situation would screw over pretty much every bitcoin business.
An extreme transaction fee market sounds like a good idea to some armchair "blockchain economists", but in reality that does nothing for node operators (who have to bear most of the expense, and they don't get fees), and it just drives away people from using the blockchain. I don't know, the whole logic of "I want bitcoin to become a successful global decentralized currency, but I only want rich people using the actual blockchain" is beyond me.
The "lightning network" is constantly made out to be the ultimate solution, but at the moment it is just a PDF, and until there is an actual working proof of concept, then it's in the same camp as sidechains and treechains and utterly useless to us right now. Besides, lightning network also needs a much higher block size limit, and requires a hard fork for some other yet-to-be-built features before it is even possible, so I don't really understand what the big fuss is. We are on the same team guys. Besides, increasing the limit buys a lot more time, wouldn't you guys like several extra years to perfect better solutions before the matter becomes urgent again? And why can't a proof of concept for this stuff be set up on an alt-chain or test network to actually demonstrate it?
Also regarding the lightning network, it's stupid to assume that literally everyone will be using it and that the bitcoin blockchain will only be it's personal clearing house. People (such as myself) are going to keep using the blockchain for other purposes than payment channels, regardless of what the folks at blockstream want.
I think people greatly overestimate hard forks. Software in general needs updating all the time, it's not that big of a deal really. The protocol has already evolved quite a bit over the years without much issue. edit to clarify, I think a hard fork should be a rare occurance, well planned and should be scheduled for a reasonable amount in the future to give people time to upgrade. It's not a big deal to upgrade if there is plenty of notice and the changes won't break everything.
Ok, so this was supposed to be a short post but it turned into a huge rant, but there you go. I could be wrong about anything so feel free to point it out. tl;dr 1MB limit needs to go at some point no matter what way you slice it. More adoption = more businesses = more nodes. Stop worrying about things like "node centralization" and start writing code and doing tests people..
Petrodollar, Fiat Currencies, Foreign reserves and whether a gold backed currency is a solution? And will David do a segment on this on TDPS?
I am no economist. Though I have recently got interested in all this mumbo jumbo. I have researched extensively on the geopolitics of China. Through that, the geopolitics of Russia came up. Through which Putin's attempt to bypass IMF and World Bank and the Dollar to bypass US sanctions came up. When I looked into how that all would work, I ended up with the mess of information and the muddle of thoughts I am in now. This is my understanding of the matter from my research. I could be completely wrong with regards to some things here or all of them. However, like many of my posts, this too is a mental exercise to inform other people, get them thinking about it and gaining information myself and correcting my own misunderstandings on matters. Therefore I would like as much well informed, sane and serious discussion on it as possible. in 1944, all the countries entered into the Bretton Woods Agreement which basically said that all of the world’s currencies would be backed by the US Dollar and the US dollar would be backed by gold and any country could convert their currency into US dollars and then redeem US gold in exchange for that at the rate of 35 dollars per ounce of gold. Since US had the largest gold reserves at the time (75% of the entire world's gold), everyone agreed. This also allowed US treasury to fix exchange rates of dollar into different currencies and set the interest rates for inter-banking transactions etc. However, the multiple wars of the US during the ’60s caused domestic inflation in the US and the value of Dollar to fall. This caused panic in all the countries and they started redeeming gold from US treasury. The US gold fell from 20,000 tonnes to 8100 tonnes very quickly. Thus, in 1971, Nixon closed the gold window i.e. he suspended the ability of any nation to redeem US gold against dollars and took the gold backing off of the US Dollar. While that allowed US to retain its gold reserves, it made the need of the US dollar among other countries non existent. So everyone started to move away from the Dollar. After that, US economy started to spiral and the price of gold became 135 dollars per ounce. On top of that, the Arab world hiked the oil prices. Now, the US desperately needed to stabilize the spiral. So they brokered a deal with the Saudis that the oil producers would not only trade oil in nothing but US Dollars and convince the OPEC (the middle eastern, north African and other oil producing countries) to do the same but also invest their (OPEC’s) oil profits in US treasury by buying US Treasury bonds. This basically means that they (OPEC) are buying out US debt. Not only this, US is printing Dollars against the amount of Foreign investments in the US treasury which is made by Oil producing nations which are their oil profits. So basically, profits from every barrel sold by OPEC make way to the US treasury and become the value against which dollars is printed. Ultimately, more the profits in oil, stronger the dollar and lesser the profits in oil, weaker the dollar. Thus US gets a double benefit out of every barrel of oil in a way. In exchange the US would sell them (Saudis) advance weapons and all the gold they demanded. (So basically weapons and gold sale in exchange for trading oil in dollars props up US dollar. Gold is still propping up US dollar indirectly by forcing the oil producers to trade in dollars). Thus the petrodollar was born. This caused the world to need US dollar again. If you wanted to buy oil, you needed US dollar by either converting your currency or by selling stuff to the US. The latter is more preferred as it is cheaper than exchanging your currency and also grows your economy. So once again, US became the benchmark of international trade since no country can hope to grow its economy without using energy aka oil and you can’t have oil without US dollars. As long as all these countries need oil, US can just print Dollars out of thin air and balance it against oil barrels (as explained above) without actually even owning a single drop of oil. (Other countries need to own the gold that they balance their currency against). US does not need to control oil, they just need to control the currency it is traded in to keep their economy afloat. (more on that later in US foreign policy). Similarly, US brokered a deal with the Latin American countries to not only trade in the US Dollar but also to give precedence to US, EU and Japanese products in trade. So if more and more countries decide to shun the dollar and trade in other currencies, this would eventually cause OPEC to switch as well and Dollar could collapse. How? Well, US is basically just printing enormous amounts of money out of thin air. This money is being used domestically and to a much larger extent, globally. If international oil trade in dollar stops, people stop needing the dollar and use their own currency. So all the internationally circulating dollars would come back to US. Now that is just too many dollars against very little amount in the treasury and that would cause hyperinflation and economic spiral. However, the logical next step would be to just destroy the excess dollars coming in from abroad and that would keep the country’s economy afloat. While that is okay but remember, what is the dollar being printed against? The foreign investments in the treasury which are the profits from the oil trade in dollars. That would go away as well essentially leaving nothing in the treasury against which the dollar is valued. Hence, dollar will literally not be worth the money it is printed on. Second, since US currency is basically a petrodollar, its power depends on the control of oil. So right now, whoever controls middle east has major power. Today, Saudi Arabia controls the Middle East and US controls Saudi Arabia. US-Saudi brotherhood sort of makes it impossible for other countries to have an influence over this. Russia has tried for decades to establish a strong foothold in the middle east but has been unsuccessful. It has also dictated the US foreign policy far the last 5 decades. Like I said, US needs to control not the oil reserves but the currency oil is traded in. Hence all the wars we hear that were for oil, were not actually for oil per se but intimidation tactics against countries that announced that they would no longer accept the dollar as a currency in international oil trade. Egs When the Ayatollah of Iran announced their intention to denounce dollars in oil trade and use their own currency instead, US backed Iraq to go to war with Iran and even provided the Weapons of mass destruction to use on Iran that they later used as an excuse to invade Iraq and prosecuted Saddam Hussein for. When Iraq invaded Kuwait ( a major producer of oil) to be able to pay their loans to Kuwait and then later asked for Euro to be used for oil trade rather than Petrodollar, US invaded Iraq. When Gaddafi asked gold based Dinar instead of US dollars for oil trade, US invaded Libya. When Chavez did the same, Us staged a coup in Venezuela. However, starting a non-petro currency would break this link and oil and Middle east would become less relevant for Economic power and only be of interest for energy concerns. It is still important but less so than an economic and geopolitical chessboard of US that it is today. It may actually be a solution to achieving peace in the middle east. However, another thing that happens is the Middle East controls prices of oil which is tied to the Dollar. Recently, the Middle East (OPEC or basically Saudi Arabia) has decided to drop the international prices for their own economic reasons. Now, the countries that have oil production as a major source of revenue and trade in dollars eg many N African countries, Venezuela have seen their economy completely destabilize and destroyed. These countries are sick of US and Saudi controlling the markets in a way that affects other countries adversely. Hence, for these countries, switching to the international trading system of a gold based currency will cause their economies to stabilize. The international reserves of EU etc, on the other hand, have seen increased holdings by the OPEC countries and have been worried about increasing power of these countries in the international banking system. They would be only too glad to get rid of these holdings. Now, non Dollar currency would cause a fall in the US dollar value. In lieu of that, here is another thing that needs to be considered. A lot of the developing countries have international trade deficits. Now these trade deficits can be in the currency of the country to whom the debt is owed or any other internationally accepted currency eg. the Dollar. If the debt is in dollars, the conversions and interest rates of borrowing are determined according to the rules of the US treasury. Again, the rates in the US treasury are linked to the value of the dollar. Most countries giving out loans prefer to do so in dollars as historically the Dollar is strong and trusted not to collapse and hence the money they owe is safe. The countries taking loans also convert their debts to dollars as it is easier and the country to whom the debt is owed cannot just up and change the value of the debt owed by manipulating their currency as the dollar has determined the conversion into other currencies at fixed rates, so it is safe for everyone. However, there is a slight problem with this. If you owe a debt of 1 dollar to someone, when you pay the debt, it will depend on the value of the dollar to your currency at that particular instant. So if the dollar has gotten stronger wrt to your currency, you shall have to pay more money and if the dollar has gotten weaker, you will owe less money in your currency. Hence the fall of the dollar would be beneficial for the countries who owe a debt in dollars and bad for the countries who have loaned out debt in dollars. Also, taking debt in dollars becomes cheaper if the value of the dollar falls since the US treasury interest rates are directly tied to dollars, hence it becomes cheaper to borrow in dollars. Also, as I said, if it grows weaker still, yo will owe less money. One more thing to consider regarding fall of the Dollar is this. Until now, the oil producers have been buying US treasury bonds due to the Bretton Woods deal. Other countries and US and other corporations do so too. Now, the US treasury gives a fixed rate of interest to those investing in the treasury. This rate, in turn, is linked to the value of the dollar. Stronger the dollar, more the interest on US Treasury bonds and more the foreign countries invest in it. Now this means that these foreign countries would much rather invest their money in US Treasury at an assured fixed rate of interest than investing it in 3rd world countries and take a risk of maybe losing it. However, if the value of the dollar were to fall, the countries would much rather draw out of the US treasury and invest more in the startups in different countries, domestically etc. The other side of the same coin would be the countries dependent on US investment. Should the value of the dollar fall, the investment being received from the US would be of a lesser value. On the other hand, there is one more thing. Like I said, investments in dollars are governed by the US treasury rules. Now, basically, US banks have cut the taxes on money transfer and conversion, artificially keeping them very low to fuel the domestic and world trade etc. If the dollar were to collapse, people wouldn’t trade in dollars. They would trade in other currencies. The inter banking across the world would be then governed by the rules of the currency you trade in, for eg, BRICS nations will follow the tariffs etc of the Shanghai Bank where most of the reserves are held. So that effect would then depend on the rules of the bank you deal with and that can be detrimental or beneficial depending on the bank’s policies compared to the dollar. Also, countries having holdings in the US treasury would lose the entire value of their foreign reserves. On the other hand countries like BRICS who have their reserves in other international banks would retain the value of their foreign reserves in those banks. What does this mean? Let's consider a currency X. X would also fall with the fall of the dollar in its current state. Now, we usually run around with the perception that X is backed by gold, That’s not true. The truth is 99% of today’s currencies US Dollar, Euro, Yen, all of them are fiat currencies i.e. their value is not determined by the gold they hold but by the economic strength of the government and the trust of the world in that currency. Only an average of 4–7% of any country’s currency is today, backed by gold. US Dollar - 4.5%, Similarly X lets say is - 5%. The rest is held in the terms of foreign reserves in other countries like in the form of US Dollar (for X lets say, its around 70%) in US treasury bonds, in world bank or IMF, in other currencies ( lets say for X its around 25%) and other foreign reserves etc. Currently, if you have X1000, only X50 is gold, around X670, is held in the form of US dollars and X280 in other currencies. You might ask why is that? Well, remember the Bretton Woods agreement. At that time US had 75% of the world’s gold which backed dollar and dollar backed other currencies so most of the currency of any country was backed directly or indirectly by dollar by gold. Now, it is difficult to keep gold in your country so it was convenient for other countries to just hold foreign reserves in dollars especially with the fixed exchange rates they provided. Hence more and more portion of their currency was being held in dollars. However, after Nixon shock of 1971, dollar removed its gold backing. So, automatically all other currencies that were backed by the dollar (99% of the world currencies) also became fiat currencies as a result. However, the dollar was still good and trusted so no one thought much of it, especially since dollars were being printed out of thin air. However, now with the prospect of the trust in dollar fading, this has started to worry some experts. Because of the senseless printing of dollars and in exchange all the fiat currencies, the total amount of currency can nowhere near be compensated by the gold reserves even if all the gold in the world was put together. It would form not more than 10% of the currency in the world. Now, putting this disturbing detail aside, if Dollar were to collapse, X670 of your X1000 would become worthless, too. So, it isn’t wise to hold US dollars, is it? No its, not and many countries have woken up to that fact. China has been secretly amassing large amounts of gold. OPEC countries have started removing their capital from US treasury. See, these oil producers have been receiving US gold in exchange for trading oil in US dollars and have accumulated holdings in other countries’ treasuries. Now with all the crazy gold, they have received they have bought material assets like real estate etc even in other countries. Now, they can simply sell out their US treasury bonds and buy more assets such as gold and real estate from it, which they have been doing in the recent years. Now, this will start depleting the treasury and cause the fall in the value of the dollar, in turn, causing other countries to withdraw and invest elsewhere. That, coupled with Russia and China doing trade in Roubles and Yuan, India and Iraq trading oil outside of dollar, Germany and China trading outside of Dollar, the strengthening of BRICS bank etc, Dollar has been showing a steady decline. [Edit :the petrodollar is based on a commodity that is being depleted. Oil reserves are declining and the world is moving towards other sources - gree energy, nuclear energy etc. So the petrodollar decline is destined. However, what would US do next? US could shift to backing the dollar with nuclear reserves or some new crazy idea out of someone's hat. That will, inevitably affect all other countries. Which brings us to: The thing that worries most nations is this - having international trade and foreign reserves in dollars gives US a single handed say on their economies. Just like Nixon's unilateral decision changed the fate of all currencies, other decisions by it can also change their economies. US can dictate their rules and if you don't follow them - sanctions. This is one of the major reasons Putin has teamed up with China - in order to bypass US sanctions. By passing Dollar would take away the power of the US to unilaterally change the playing field. So the countries want to take back the power of making decisions in their own hands.] On the other hand, China's attempt to start a gold backed currency may not pan out because like I said all the gold in the world is not sufficient to back all the currencies in the world. Also, since most currencies still have a large amount of dollar backing, fall of the dollar would make that percent of the currency valueless and therefore even have a reserve in another foreign currency could still cause a fall in X currency though it might be a little mitigated. On the other hand, fiat currencies are run by the investors' trust in the currency. So even if the dollar falls, a fiat currency with foreign reserves in the dollar may not fall because the confidence in that currency is still high. Sadly, such a currency would be Chinese Yuan (or am I wrong about that?). So, the policy to fix this? I am still trying to work on that solution. Though I have come to believe that neither the fiat currencies nor the gold backed currency are a solution. Maybe taking gold, platinum, silver and other precious metals together would be a basis. Maybe Us could switch from oil backing (oil will deplete in a few years anyway) to nuclear reserves happen. That would be a similar thing, just the power would no longer be in the hands of the middle east. I don't know. This is a post in evolution. My thoughts on this are still in evolution and I would really like some economists to come and hold a serious, well informed and sane discussion on this. That’s all I can think of for now, I will add more when it occurs to me. In addition to this, there has a very interesting discussion on Bitcoins in this relation which I will summarize below: The discussion started with the question: do you think blockchain technologies like bitcoin could mitigate the lack of total amount of gold in the world? The following points came up: I don't think that is possible. Bitcoins, too, are created out of thin air. Though there is a cap on the total number of bitcoins to be created (21 million), this is high in the debate to accommodate the need for more transactions. If the rules were changed and more bitcoins were generated, it would have the same effect as the dollar. The value of the bit coin, too, depends on the willingness of everyone to use Bitcoin as a currency. So it is basically a more extreme version of a dollar with additional problems. Bitcoin suffers extensive volatility. It is very unstable to use as a reliable replacement currency. In my understanding, Bitcoin uses people/their computers computing problems (computing problems is a method to verify the transactions happening through block chain) as a sort of cost for earning/mining the Bitcoins in an indirect fashion. That would be similar to if one were to link the value of a currency with the productivity of the country. That is liable to fluctuation and hence there would be extreme fluctuation in the value of the currency as well. Now bit coin has no determined exchange rate. It has no backing in terms of gold or dollars or real estate or anything. It has a value that the collective consensus agrees its value to be and that fluctuates massively, even more than stock exchange. If people start selling bitcoins, its value falls, if they start buying bitcoins, its value rises. It is a form of virtual stock exchange on steroids. It runs simply on basis of faith. So while many traders do accept bitcoins, they still maintain actual currencies as the primary mode of transaction. One thing I like about bitcoin is that it bypasses the banking system and hence makes transactions everywhere much easier. It also takes off the effect of the governmental fiscal/monetary policies on affecting the world. However, other policies can still affect it. Eg. internet security policies, massive firewalls etc. Next, another problem with it being decentralized is that there is no mechanism or body to resolve disputes. I mentioned a firewall. China has a massive firewall that causes Chinese Bitcoin network to get disconnected from the rest of the world for days. So, the Chinese keep carrying out transactions in a different virtual world and the rest of the world is in a different virtual world.When the worlds collide after a couple of days, the issues are not resolvable and there is no one to settle disputes. The format of the bitcoin is this. Right now it pays block benefits to miners that form 99% of their revenue. Later, as the number of bitcoins to be mined decreases, this is to be replaced by a transaction fees revenue. Now, the number of people using it is low. Therefore the transaction cost would go very high making the transactions in bitcoins costlier and decreasing the number of transactions taking place in it and devaluing the currency. And the people sort of in control of its policy are split on how to handle that issue. Next, there are other currencies like Ethereum etc that are coming up and we see Chinese investing much more in Ethereum than in Bitcoin. Now, again, even Ethereum has no intrinsic value and there is no way to determine the value of one currency against another. Next, there is again the problem of founding currencies on currencies. Like with the dollar backing all currencies of the world, there are people creating currencies backed by existing cryptocurrencies eg Kin over Ethereum. This again causes pegging of currencies to another one and hence presents the dollar problem in a digital format. Next, Bitcoin seriously threatens political power and banks. Hence, it will suffer a severe backlash from them. While they cannot control the blockchain, they can change internet and capital policies and control the ends of the chain and levy backward taxes etc and hence manipulate these as well. Also, as the number of bitcoins is limited, the number of people mining it is less and a trend of hoarders and squatters is emerging even with Bitcoin. When Bitcoin started you could just mine bitcoins using your CPU and GPU. The amount you earn depends on the number of transactions you verify through solving problems. Therefore the more problems you solve per minute, the more bitcoins you earn per minute. Therefore the more speedy and memory savvy your equipment and faster your internet speeds, the more bitcoins you earn. Sadly, with the increasing competition in the Bit-world and the flood of greedy/opportunistic Chinese among other people swarming the cryptocurrency markets, the equipment required to mine bitcoins is getting more and more expensive which concentrates the ability of mining in the hands of people who are ready to seriously invest in expensive and high-speed hardware. This would again lead to a sort of centralization of power with the people holding bitcoins and they can internally manipulate the currency which would then again cause people to lose the appeal and defeat the whole purpose of it. It also increases the risks of 51% attacks, again something that will cause bitcoiners to abandon ship. Also, if bitcoin is going to cut the rewards for mining, it will be less and less profitable or even profitable for miners and hence they will stop mining and maybe sell off the Bitcoins. Also with the sort of disarray in the management of the bit-system, some of the transactions are taking hours and even days to go through creating more and more hassles for the users. Plus, what happens if the servers in your area are down or there is a power outage due to some reason and bitcoin is the only currency in the world? Also, Bitcoin runs on the collective ledger kept around the world of all transactions happened and happening in real time. One cannot use most Bit-Wallets without downloading all of this data. The data increases with every new user and every minute Bitcoin is in use. As time passes and Bit-users grow, this data will reach gigantic proportions. This again puts limitations on Bitcoin to be more and more feasible for people who can afford to invest in expensive hardware that can store massive amounts of data. Since that would decrease the number of users, the overall number of users in the bit-system will be maintained within a certain range because of this. Since the pool of people and transactions will be less, the transaction fees charged to keep paying benefits will become higher causing lesser transactions the currency to collapse. So, the currency is young and there are so many things to consider. It also needs to evolve a lot before it can be even universally be accepted as a currency. I cannot say whether it could replace the currency systems or not, whether it should replace them or not. You will find very strong opinions on either side. I believe it will have a parallel role for about a decade before such a question can come close to a possible answer. Trends will be clearer after some time. All I can give you is my opinion for in what context bitcoin should use. IMO it might be wiser to use Bitcoin as a transaction currency instead of a primary currency. What I mean by that is, unpeg the currencies from the dollar, allow the free market to decide the value of your currency and the exchange rates and determine the absolute value of a bitcoin-like currency. Then make a bitcoin-like currency which can be both virtual and physical that is universally accepted for trade wherein it is just a means of exchange in cases of international trade. Also, let everyone (countries) using it have a say in the administrative decisions of it. Moreover, a world currency will never be possible. Weaker economies require a weaker currency for their benefit and stronger economies require stronger currencies for their benefit. When you have a common currency with different economic strength countries, you end up with something like the crisis in Greece because of the Euro. There is a lot to consider for that. Free Floating exchange rates also came up. In addition to that, before 1944, the world was linked to gold standard. So that allowed for easy capital mobility and currencies were not dependent on currency. After Bretton woods, the problem was pegging of the currencies to US Dollar which tied all the currencies to the fate of the dollar. So its not that even a fixed rate system can't work, it can, maybe not in the form of gold standard but some other form. Th problem is there shouldn't be too much power in the hands of one person. and While I do think in today's scenario, free float would work but that restricts trade and while it will be beneficial for countries like China and even Germany which are producers and will help them to boom domestic market it will not be welcomed by the west as they are dependent on trade to provide for their basic needs and local production and increased difficulty of trade by free float would increase their cost of living tremendously. Don't you think? Thoughts in evolution. and Unless there is a universal trading currency that is decentralized and controlled by equal votes by every country using it and has a set value. So, it would be something like a dollar but maybe rooted to an anchor for value like in olden days it was gold. It could be something else now, a proportionate part of which can be held in the reserves of different countries and allows for easy trade and exchange across the globe but prevents the monopoly of one country.
I have some fresh ideas for the upcoming Bitcoin-XT. I am sure my ideas will never happen with the current Bitcoin-Core Team. While I was several times trying to note some issues for instance in the IRC channel, I got harsh answers based on the motto "when average Joe doesn't understand he should not use bitcoins". In my opinion this is a terrible, unprofessional attitude and I personally hope we will have some more professionalism with Bitcoin-XT. It is simply not enough to be a really good programmer, but to NOT understand economic basics of how an internet based product being successful. And it seems like a part of the programmer don't understand beside Gavin, Mike, Jeff as far as I can judge based on their behavior. So what do you think about following:
GIT-Admin-Access for well known economist. The idea is to have someone in the team to beacon from another point of view than programmer do.
Poll like integration for Bitcoin clients. A possibility for everyone with Bitcoin to vote on important decisions. Vote faking could be prevented with a stake like system. So your vote will be proportional to your stake. Similar to share holder system.
Possibility to reward Developer, maybe through a fund.
Letter of Manifest which have to be signed from every member with GIT-Admin-Access. Which includes stuff like: A - Programmer and all guys with GIT-Access will always respect the opinion of the Bitcoin-User majority. B - The absolute number of bitcoins ever produced can't be changed.
Bitcoin-XT client should ask on installing if you want the full version or the light version. The light version should work without the need of downloading the complete blockchain. In general the whole system should be optimized for non nerds / average Joe.
GIT-Admin-Access for well known economist. The idea is to have someone in the team to beacon from another point of view than programmer do.
Poll like integration for Bitcoin clients. A possibility for everyone with Bitcoin to vote on important decisions. Vote faking could be prevented with a stake like system. So your vote will be proportional to your stake. Similar to share holder system.
Possibility to reward Developer, maybe through a fund.
Letter of Manifest which have to be signed from every member with GIT-Admin-Access. Which includes stuff like: A - Programmer and all guys with GIT-Access will always respect the opinion of the Bitcoin-User majority. B - The absolute number of bitcoins ever produced can't be changed.
Client should ask on installing if you want the full version or the light version. The light version should work without the need of downloading the complete blockchain. In general the whole system should be optimized for non nerds / average Joe.
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