Coming to Consensus: Governance is just as important as Blocksize

One of the heated debates that has raged over the years in Bitcoin space is whether the idea of a developer team lead by a benevolent dictator is the appropriate model to employ for a network worth more than 15 billion dollars in market capitalization.  Many have cited examples of how Satoshi, and then Gavin himself were benevolent dictators, and also how some well known projects have been successfully managed under the watchful eye of a wise and benevolent (though sometimes abrasive) dictator such as the Linux project.  It is also true that most civilizations evolve from dictatorships, starting with the tribal chiefs, to feudal warrior kings, to aristocratic monarchs, to emperors.  The transition to a democracy is not always a smooth one, and is mired by both slippages into oligarchies, totalitarian fascism to misguided experiments into socialism.  It is important then, to keep in mind that while most organized groups start as dictatorships, they eventually evolve into a system that is more inclusive of the common people’s will.

Oh, Glorious Leader, shepherd for the weak, show us the way!

Firstly, let’s get the obvious out of the way.  Dictatorships are vastly more efficient than a republic or democracy.  635984715851776795-AFP-551724097This is due to the fact there is little bounds on the leaders power, and his followers will carry out his instructions in the most expedient fashion.  Contrast this to a democracy where leaders are continually second guessed by their opposition, and their political opponents who are all vying for their own chance to run the show.  In a dictatorship, the only way a change of regime is possible is through open and widespread revolution.  This is why despotic Chinese emperors of old made it illegal to congregate in groups of 3 or more, restrict what can be discussed in public and on occasion just committed mass murders of all the academics and scholars for fear that they may spread seeds of dissent and dissatisfaction among the peasants with their pesky logic, philosophy, and ideals of morality. Continue reading

Why Trump Won — If you are reading this, you probably voted Hillary, THAT’s WHY.

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If he can win a rigged election as an outsider, maybe we should give him a fair chance at running the country?

So now that it is all over, all the posturing, all the fake allegations and all the pretentiousness can be dropped.  I can finally say that I am relieved that Hillary did not win the election, and that all the social justice leftists have been shown some humility.  I was one of the few people who was not surprised that Trump won.  I mean, folks in the underground have been warning of poll rigging for a while already and even went as far as predict his win as of Nov 3rd.  I was silently hopeful that all the whispers of poll rigging were true and that most of America was not delusional, and only mainstream media, and the establishment were.  The morning after, everyone around me was asking me, “How the hell did he win?”, “How come nobody saw this coming?”.

My answer to them was basically, that there were those of us who did, but we did not want to speak out about it because to go against the Hillary campaign was to label oneself a racist/sexist/misogynist/hater.  And really, once you (the media) poison the dialog to be about these kinds of politically incorrect topics, there really is no sense in discussing things anymore.  The irony is that those of the extreme left who exonerate free speech and civil liberties, don’t seem to care so much about those causes when someone is saying something that they don’t like.

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Emergent Consensus: Guide to Forking Safely

Early this year, when the debate on how to manage the meta-consensus issue of hard fork management arose I wrote an article about emergent consensus.  This basically outlined the idea behind Bitcoin Unlimited‘s proposal of letting the network decide when it is collectively ready to move the block limit higher, and by what amount.  At the time, I wrote that the issue was lack of good UX tools which would be able to track network participants (whether mining node, or regular full-node) votes and show them in real time.  After all, emergent consensus can only work if there is a sufficient feedback loop so that the collective group decision making process can be facilitated, and overestimates and underestimates can be corrected.  Safe Forking!This is much like how a liquid market of bid/asks facilitates price discovery in every financial market since the beginning of human commerce.  It is only by repeated and constant dogmatization of the block size limit as a ‘sacrosanct’ part of the protocol, has the proponents of a smaller block restricted Bitcoin been able to convince everyone that the limit cannot be changed, lest the network be subject to catastrophic attacks or instability.

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Mining Centralization: The war on Bitcoin’s mining industry

We have all heard about the big problem of mining centralization in Bitcoin.  The deep set fears that somehow, if left unchecked, the miners will collude to defraud the network, and sabotage the whole system, all in order to satiate their own lust for profit.

This is often used as a reason to employ [central planned policy here] or to change the protocol to incentivize some other (more acceptable) form of behaviour.  Of all the ‘decentralization myths’ this one is the toughest to dispel; not because it is any more true than the other myths but because people have an inbuilt selection bias in that they often believe that a system not serving them directly must mean that system is broken, instead of realizing that they way they are interacting with the system may be at fault.  Mining has always been a very liquid market in Bitcoin, and has gone through several phases or generations, and as each new era came to an end there were very loud proponents in the industry that wailed and warned that this new change would mark the end of the network and everything would break.  Detractors said the same thing when mining moved from single CPUs to GPUs and experienced a 1000x increase in efficiency, then again when mining moved to FPGAs, and finally to custom ASICs.  The industry has seen hashrates go from MH/s, to GH/s, to TH/s.  That is a million times increase in just 7 years.  Every time, the complainers were the ones that had some entrenched interest in the current model and stood to lose money or competitiveness.  Maybe they had just bought 10 new Intel Xeon servers just to mine Bitcoins when some genius had the idea to move mining to GPUs.  Or maybe they had just bought $200,000 of GPUs when the first ASICs were released, and were caught holding the bag.  Needless to say, you can always identify the people who stand to lose something given a change by how loud they complain about it.  (Hint: take note on which miners complain about mining centralization the most)

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Ethereum: A Hard Fork Lesson for Bitcoin

imgresEthereum made crypto-history this week by being the first PoW blockchain to execute a hard fork. They claimed it was done after getting unanimous consensus from the community through stake voting which many have criticised as being nothing more than a farce, as less that a total of 13% of the coin population bothered to turn up to vote, and some sources say it was even possibly less than 2%. Nevertheless, the hard fork was devised and coded, hastily tested, and released, and when the fateful day arrived when it was pre-programmed to activate, July 21st 2016, the network indeed split into two. Quietly, smoothly, without much fanfare.

A week before a group of developers and supporters who opposed the hard fork on ethical principles formed a movement called Ethereum Classic, and pledged to reject the new fork which would see the seizure and confiscation of the ETH that the DAO attacker had acquired during his raid. This movement also saw the defection of about 5% of the mining power in the ethereum network.

What happened after the fork block made history. Contrary to what the ETH developers said, the fork did not remerge and the minority chain persisted. At first the block rate was a fraction of the majority chain. But now after 2 days the block rate has stabilized and the minor chain is mining blocks at about the same rate as before the fork. In addition, the difficulty of the mining is only 1% of the majority chain, which adds an economic incentive for miners to mine on the minor chain in order to make more rewards. This second chain represents the split-fork scenario that many Bitcoin core devs have been warning the community that would cause chaos and destroy both systems. Only, it didn’t. At least not yet.

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Bitcoin: Getting to the Moon 101

Easter weekend.  Family reunions, liturgical services, fasting for some, feasting for others, a time for renewal, time to dispel some crypto myths!

Everyone talks about “going to the moon” in crypto but few if any really knows what that means.  Cypherpunks care about privacy and censorship resistance, libertarians care about political ideology and businesses care about making money. But how many of them actually think through how to get there?

I don’t mean in a metaphoric sense, I mean pragmatically. What is the adoption roadmap? What do we mean by ‘moon’? Price?  Resistance to government usurpation? Censorship resistance? Self sustaining system without any oversight?

True, most people who say “To the moon!” are just pumpers or speculators trying to incite a windfall profit from the penny stock altcoin that they purchased for the express purpose of dumping it for a profit on unsuspecting suckers.  But let’s consider a moment the goal of Bitcoin –becoming a widely accepted alternate money to fiat currencies– how does Bitcoin get to there from where it is today?  What challenges and obstacles must it overcome?  What different stages of development and growth must it evolve through?

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Roundtables vs. Honey Badger (0-2)

As the ongoing debate in Bitcoin between the Core and the Classic camp rages on, early signs of tentative order emerging spontaneously from the un-orchestrated chaos can be seen.  For one, most of the intelligent proponents on either side finally seem to have recognized the fundamental irreconcilable differences of opinion on either side of the divide, having spent the last 3 months weeding through the army of trolls and sycophants which always seem to amass around idealogical movements.

escudo-shatoshi

The industry has started to look upon itself in a satirical way, from high profile jokers like Samson Mow, to the absurd display at the Miami Satoshi RoundTable, organized by Bitcoin Foundation Bruce Fenton, which sported such medieval artifacts as an actual suit of armour and a Bitcoin Magna Carta which would make 45 year old AD&D live roleplaying nerds giddy.  The industry has certainly reached its apogee of insanity, absurdity and self flagellation, and it can’t possibly get any worse, and thus, we should expect to see things starting to come back to reality very soon.

Several promising things have been happening recently that give me cause to be hopeful that we may yet see the end of this “Rite of Passage” in the life of Bitcoin:

  1. Core has started to consider a hard fork proposal themselves.
  2. Interest in Bitcoin has been re-kindled in the form of 2000+ (as of writing) new nodes added to the network.
  3. Mining pools have started to implement miner voting systems within their constituents.
  4. New consensus tools have emerged which help bring visibility to and encourage people get involved in, the decentralized crypto-governance process.
  5. A total of 4 past attempts at securing industry participants into binding agreements have all failed to produce consensus.

Let’s examine each in turn.

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How do YOU measure Decentralization?

The disagreements between the ‘big blockers’ and the ‘small blockers’ in Bitcoin are heating up.  Bitcoin Classic is poised to release its first client to compete with Bitcoin Core, and Bitcoin Unlimited has had its first vote on its new feature set.  It is a time of peril in the galaxy…

Now as the credits fade into the star field background picture a big wedge shaped Star Destroyer with the banner reading “Decentralization” filling the screen.  This word is really the Battle Cry of most crypto-currencies, and as I have written in the past, it is so poorly understood.

decentralisation

Everyone wants it, but few know what it is

It is a repurposed term, that simply describes a quality of network topology, transformed into a rallying call of rebellion.  The problem is that almost everyone that I read or encounter in the industry uses this term as a panacea for all the problems that they see in the world today, without actually knowing what it truly means. They believe it because of faith from authority, and through basic reasoning, that it is good and thus must be fought for without actually knowing why.  This is dangerous, as this is how cults start.  The Cult of Decentralization.

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Begun, this Bitcoin Clone War has!

I ask you, dear reader, please forgive me.  I am going to break from my normal “impartial observer” commentary on the Bitcoin space and speak personally about a project that I am involved in, because I believe it matters.  election-ahead-sign-375x250

There is an election going on in Bitcoin space.  At least this is what the media is going to call it very shortly (perhaps in a months time, after it is all settled, as mainstream media is apt to do… always late to the party).  This election, like any, is political.  It is a battle of wills, of differing philosophies, of ways of thinking.  But like all elections, I believe that the will of the people, the majority, will determine the results.

Bitcoin Classic, is an implementation headed by Gavin Andreson, Jeff Garzik, Jonathan Toomim and others, which aims to deliver an alternative implementation of Bitcoin, aimed at addressing the demands of the users and businesses in Bitcoin.

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Greece Crisis (again) -How can you help?

Given the turmoil that Greece has been in the last little while and in light of the July 5th referendum, I felt it necessary to explain a couple of things as it turns out that many international onlookers may not understand the situation fully.  What’s clear is that a large part of the population in the country which invented democracy is ready to take it back, by force, if necessary.

Tsipras made a brilliant strategic move of calling for a referendum to see if Greeks want to give in to the ECB and EU demands. Or to choose NO and leave the monetary union.  In this way he has, as Pontius Pilate did, washed his hands of the responsibilty, and allayed any suspicions that he (unlike his predecessors) may be under the influence of the international bankers.  He is no longer in the picture. He has removed himself from the equation.  He is no longer a target for bribes. He has truly given the power to the people and for that he was brave.

Still, many misconceptions float around the international community about the situation. Some see Greece as freeloading homeless people begging for handouts.  Others see them as unfortunate victims of international banks and the Statists.  I think it best to format this as a FAQ info session. So here it goes.

How did we get here?

Answers will vary depending who you ask but generally a lot of false promises were made and some numbers massaged so that Greece could make it into the Eurozone back in 2001.  My former employer ran the deal and was paid handsomely for it. I’m sure the Greek officials at the time took home their share of the finish-line prize as well. There were champagne parties, and libations.  Everyone celebrated the triumph of capitalism and European Statism. Those parties and politicians have long since gone and perhaps most of the money along with it.

The potential productivity of the Greek economy was exaggerated.  Now they are a net liability to the rest of Europe (mostly Germany).  And the Greek people are worse off as they are now working harder and for less just to pay back the loans that were given the country but “disappeared” through the cracks of bureaucracy and corruption.

Who does Greece owe?

Greece ended up borrowing a lot of money. The creditors are other euro countries (notably Germany, Italy, Spain, UK, Portugal) and international banks, and the IMF. A total of about 352 billion Euros to various parties.  Their debt to GDP ratio is 180%.

What do the Greek people want?

To stop the endless cycle of paying off present debts with more future loans and more austerity measures.  The average Greek has a yearly salary of only 7000 euros.  A pool boy it Canada makes more than that.  The tax burden on the poor has risen 337% and their incomes cut by over 87%.  Incomes on the rich has only been cut by 9%. Of course it’s tough to tax the rich too much as they have the means to just leave the country. But this is the result of the austerity measures.  The rich run away with the loan cash and the poor are stuck with the bill because they can’t afford to run away.

Young people want out of the EU.  They have nothing to lose and have lost most of their income and hope due to austerity.

Old people want to stay in. They depend on pensions and cannot afford to leave.  They are retirees mostly and probably feel that kicking the can down the road won’t matter too much to them because they won’t live enough to see the Keynesian “long run eventuality” anyhow.

What are the demographics?

Most of Greece is reduced to service industry and tourism, some exports in cheese and olive oil.  Most of these industries would benefit from a depreciation of currency that would come with the introduction of drachma.  They have a lot of state assets like ports and islands that almost got sold to China.  But violent public backlash against selling off its ‘mother Gaia’ to foreigners has made capitalizing on these assets difficult.

How can you show Global support?

Normally I end my posts with a request for donations. This time I’m asking you to donate to Greece instead. Show the geek people that the global community supports their stance against the banks and for the rights of the people to decide their own future.  Checkout the Indiegogo campaign started below:

Greece Bailout No strings attached!

It is an attempt to show solidarity with the Greek people. It is a chance to show Greeks that the world is behind them if they want to say “enough is enough” and take back their country for themselves.  You don’t pay if the target is not reached. If it is the money will be donated to the Greek government to do with it what it will, no strings attached.

Do I think that the target will be reached? Probably not, but it’s a social experiment on how many people really care about helping their fellow man, versus those who just want to talk a lot about it.  It also says something about how many people really want to do something about injustice, vs those who are happy to just their elected officials make all the big decisions for them.  We live in the internet age now, there really isn’t a need to delegate a lot of these traditional things to ‘smarter’ people in governments anymore.  Besides, most of the time, they aren’t much smarter than that pool boy in Canada anyhow.

Do I think that 1.6billion will make a difference in repaying their debts? NO.  Of course not!  But I think it would convince some Greeks to feel a bit better about voting NO to Euro and roughing it out on their own, they have a lot of pensions to pay, civil servants like garbage men and judges to payroll, and they have to back the new drachma with something, why not use that donation to buy 1.6 billion euro worth of gold ? (Or Bitcoin?)

Vote with your money. Vote to support Greece in their fight for independence from the international bankers.  The people of Germany don’t want them here,  Greek people don’t want to be here, you have to ask yourself, who really needs Greece in Euro anyway?

Your support may just help more Greeks believe in themselves enough to vote a resounding NO this July 6th.  And that will be a vote that will be heard around the world. One that Leonidas and the Spartans at Thermopylae would be proud of.

[edit: corrected the total debt numbers, 180 was the debt to GDP ratio, not the total outstanding debt which is a lot more]