What Made Bitcoin Work and the History of Digital Currency | Study Session | TruStory (2018)


Was to be with us to moderate this session but he’s not
here so I’m just gonna get started I know I don’t know if all of you had a
chance to read it it’s quite dense I had to read it like two or three times to
fully understand and there’s like a bunch of links it goes into but as you
probably read the premise of the whole article is just like one thing it just
says that the the argument the author is trying to make is like Bitcoin is
actually not a very elegant solution if you think about it from a computer
science point of view but for some reason it just took off and why is it
ugly and it talked he goes into the article but why’ it’s ugly and why it’s
not elegant and if you think about how typically computer scientists things
like they like to build in very beautiful systems especially in
cryptography so cryptography is all about like symmetric similar symmetrical
math and everything just like works perfect perfectly and it either works or
doesn’t work with Bitcoin it’s this kind of thing where like there’s no really
it’s very probabilistic and so it’s not actually deterministic and like it’s not
very pretty for a computer scientist who looks at this and they’re like this is
actually very ugly because I can’t I can’t deterministically determine the
properties of this protocol and so but it still works and so like the whole
article goes into like a lot why does this for if you talked about why it’s
ugly etc etc and I will share my screen because I kind of want to quickly go
through the different sections that were in here and then we’ll jump into each
one specifically after that so one sec one thing I want to mention guys is uh
Preethi is going to discuss this article but if you guys have any questions feel free
to ask them in our zoom chat I posted something in there and I also posted the
Google Doc link and also feel free to interrupt with questions like we don’t
want to make this a boring lecture like feel free to interrupt um I think I made
your mics so if you post it in the chat I can ask Preethi those questions later
but yeah no I don’t think you need to mute them they can ask
directly ok sweet yeah can you see my screen yeah really I can only see myself in the in the in the chat
dialogue you mean you don’t see the video of yourself I see myself I don’t
see the shared screen oh we see it it says like I guess one quick thing before
we start it seems like there’s two questions right is Bitcoin actually
worse and then if is worse is better yeah that’s a good question and I think
it’s it’s it’s subjective we’re never gonna get to the question of is Bitcoin
worse because worse is very subjective how do you define worse than what but I
think we can come to a conclusion of like why the author thinks it’s it is worse
and if it is worse like why did it work and so if you start here the
prerequisite just talks about what are all the actual components that Bitcoin
requires it requires public key cryptography which is what you use to
sign transactions cryptographic signatures hash functions hash chain
based proof of work cryptographic time stamps result resilient peer-to-peer
networks and all these things basically existed before Bitcoin was even founded
and he goes into talking about like different dates of the different
technologies and when they actually existed and you can see that like a lot
of these existed like eight nine or even sometimes twenty years before Bitcoin
was actually founded so like things like hash trees have existed for thirty years
public key cryptography was around a long long time all these things existed
we had peer to peer networks in then in the late 90s things like Usenet have
already stored it’s a peer-to-peer was not even a new thing like this idea of
decentralization was never new and so again like this is not new and and in
this section he kind of goes into talking about like why does this delay
exist he’s like we ought to figure it out like let’s and and then the next
section talks about like okay maybe it didn’t exist because it was Impractical
and he’s like and then he goes into arguing like actually no it’s not that
can’t be the reason because he says let’s say let’s say we assume that
Bitcoin was Impractical because it takes up too much disk space so it takes too
much and he says that could have been easily
solved in in various ways and he bullets out different ways that that could have
actually been solved for example one way to solve it is instead of having
transactions every 10 minutes you have transactions every 20 minutes
so you’re basically cut the number of transactions that you’re storing in half
if you do that so there’s basically or you can do garbage collection or you can
you don’t need to maintain a hash tree of every single transaction you can just
maintain the block headers and so he basically in these bullets argues of
different ways that that could have actually taken less memory than it did
and so he thinks like disk usage is not the reason it didn’t take off sooner
yeah go ahead yeah but in let’s say if we talk like
1995 disk space the memory was costing like I think like 10,000 more than today
if I’m correct around that let’s see like how much it costs to a gigabyte
today of storage how much it costs like 0.01 cent right yeah if I’m correct it
was a almost like $295 for one gigabyte of storage if I’m correct I have
to go check my things but yeah that’s fair but like again like it’s a Moore’s
law it’s every what how happened is Moore’s Law it doubles every like year
and a half yeah and so like if you take all like all these bullets into
consideration like there’s definitely a way that Bitcoin could have existed
maybe not 30 years ago perhaps but like at least 10 years before it was founded
what do you think about that argument maybe I’m nuts it and it could not be
existed I just say will be like it will be more costly to exist it would
definitely be more costly for sure and but like but like I don’t think it’s too
costly yeah I guess this is how efficient could
you actually be with disk usage right the more efficient that’s like you’re
saying garbage collection or you use simple algorithm or something I mean
first of all this the block time is Moore’s law right if you double it you
get you need half less disk usage yeah yeah like so he said
okay so in this I highlighted the sentence can you see this would memory
be a problem in the 1990s it doesn’t have to be so he’s saying it could
actually been started about eight to ten years before it actually did get started
and he says like in the 1990s we had we could have done all these things to make
Bitcoin basically possible like what he’s trying to argue here is like a lot
of the things in Bitcoin that make it take up a lot of this space are actually
not like necessary features for it to exist like maybe that’s a better way to
think about it absolutely it could exist but for sure it will like just that they
the cost to start it and everything we’re sure will be ours know about that
absolutely so then and then this is an interesting argument that I highlighted
he says in a counterfactual universe or Bitcoin was actually began in the early
1990s the changeover would simply have occurred sooner and the changeover he is
talking about is the use of light clients so as you probably know in
Bitcoin there is this concept of a full node and there’s a concept of a light
client a full node stores all the transactions ever since the beginning of
time since the Genesis block and so obviously a full node is gonna have
gigabytes and gigabytes and gigabytes of storage that you have to that you have
the store and you need like a large computer computers that can actually
store that much information to be able to run that kind of node like clients
only store the headers the headers just have the the merkle tree hash of
the transactions and so headers are much much lighter in weight and so an average
computer can actually store the light client chain and what
he’s saying is if if bitcoin was founded in the 1990s then we could have started
to use light clients much sooner if in fact it was gonna take up too much space
yeah is this good isn’t a criticism of like light clients is that they make the
network not secure because only the full nodes are doing on a full verification
how do you think about the light client is that like as a light client you’re
typically not a miner you can’t be a miner using a light client node at least
at least not today but if you want to be a miner you definitely have to have
dedicated hardware that can store the full node and that can mine but if you
exist it client meaning like you just want to send transactions and receive
and confirm transaction sign transactions a light node is just is
enough because that’s all you need to to to basically be a participant of the
network would not be a miner okay yeah okay because I’ve never quite understood
this with things like meta mask qualify as like clients for ethereum
know so that’s like meta mask is not a like client for a ethereum so a light client
actually okay so the better way to think about this let me see if I can explain a
different way a light client still stores every every single
transaction since the beginning of time it just stores it in a much more
efficient way because all it stores is the Merkel tree hash of each block and
so that’s all that’s included in the block header whereas like a full notice
towards every single transaction so like but like an application like meta mask
all it’s doing is signing transactions for you and sending it to the ethereum
blockchain and so that’s like basically you can think of it as like a UI on top
of a full node client that makes sense and then what is what
do you think is the purpose at all of light clients that
all of my clients like what why is there like what is the purpose why would I
ever want to run a light client like why would what use case would I garner from
it versus you know just not using a light client just using something like
Meta Mask which is obviously just pending transactions and then we’re running a
full node to access the full set of data so I can go back and analyze whatever
transactions or verify the tree or whatever I to do sure um I think the
best way to answer this question is to give you an example so one of the things
okay so for example even at trustory we are building a mobile app right and for
us like we have a blockchain that we we need to transact with we have our own
set application specific blockchain and every time you use the app let’s say you
create a new story you have to sign that transaction with your key and I get sent
to the blockchain and it’s stored right now the way we do that is we sign it on
the mobile client mobile app and then we send it off to the blockchain and then
using an API and then it it gets its logged on the blockchain but imagine a
world where we can actually store the blockchain directly on the mobile phone
and like literally like just like basically everything is in on the mobile phone so
like the application sits on the mobile phone a light client blockchain sits on
the mobile phone so that that way you don’t even need that like gateway layer
in between so like the purpose of a light climb is basically to make
interacting with the blockchain much easier and much more efficient the like
lion now it’s been a time I did not check but what is the space the disk
space that it use yeah it’s been a while since I checked the last one I checked
was ethereum I know when I was downloading anything blockchain like six
months ago it was like it was definitely over a hundred gigabytes I think but
that might be no that might be the full note the full note was at the light
client was probably last time I downloaded where I wasn’t on like eight
to ten gigs I think okay because like at 100 gigabyte like if we take like the
the assumptions then we could done that like
20 years ago that would be really expensive definitely to run a full nah
that would be really really expensive like impractical right? probably
impractical yeah right we’ve switched from Bitcoin ethereum all those
efficiency hacks were for Bitcoin yeah true
no I guess but like ethereum also uses the same a lot of the same
primitives it’s very similar like how the block headers work it’s slightly
different but I think you can kind of generalize for this purpose um okay so
then he goes on to this like really fascinating section about like all the
objections that cryptographers had when Satoshi proposed this Bitcoin thing in
the mailing list obviously the number one thing was like disk and bandwidth
won’t scale and that is basically what we’re talking about right now and this
was like the obvious contention that everyone had and the Satoshi response
was that like hey local I have this whole light client idea or he calls it
think client and that’s that’s a way to kind of mitigate this this this risk
that you keep talking about then the next kind of criticism was like the
proposal is actually incredibly under specified and if you look at the Bitcoin
white paper which we went through in the last study session it’s only like what
eight pages long I think and it’s like it has no math it has no end to them and
actually ask this question they’re like why is why is there no like how do you
how did they define that a block should be one megabyte or like how do they
define all these and that’s kind of what this argument is saying is like there’s
there was a it was just a white paper with very little details of like how
things actually work in code in the real world and they talked about how
everything is kind of ad hoc and you have to just like make assumptions about
how something will work and so things like race conditions or like time
synchronization attacks like all these are just like not even addressed in the
white papers that was another another criticism and why people thought it was
like ugly and underspecified the next one was like conflating transactions
with Bitcoin creation they this is like a very novel thing about Bitcoin there
was never a system I did this there was never a system where every time you
actually validate a transaction you have to create new Bitcoin like this concept
is very new to people and they’re like why why do we have to do that A and like
B doesn’t just mean that we have to have inflation basically for every
transaction it just like it just didn’t fit in people’s minds how did how did
why does this have to happen and then like the other very classical
cryptography argument is like so distributed systems and I wrote a post
about this a couple of weeks ago distributed systems and consensus and
distributed systems has existed for like decades and decades and people have
spent like so much time researching this thing and there’s basically been like no
way to solve the Byzantine generals problem at least in an academic sense
and so one guy named James actually comes in and he’s like you know it’s
actually really difficult to solve the consensus problem like who are
you to think that you can just come in and create the solution without thinking
about all the prior research that kind of went into this field and we kind of
came out saying like this is a really hard problem and the other criticism
person here is domination of the hash tree by fast nodes and starvation of
transactions what this is basically saying is like someone was basically arguing that with Bitcoin because of the the fact that like the more power
compute power you have the more ability you have to the more likelihood you have
to win block rewards and validate new blocks like it’s gonna be obvious that
there’s gonna be a few players who dominate and this is a very good point
because that they want for what’s happening today right um and then the
last thing is like the whole sort of Pseudo-nominee thing like it’s
not even anonymous and pseudonymous everything can be trackable because
Bitcoin transactions very traceable if you just go back in
history and this is actually one of the reasons governments love it because they
can trace the transaction graph easily and so that’s another criticism and all
those are reasons why people felt it was really ugly and then Nick Szabo kind of
goes in and says like it quite is like an incredibly complex system and it
basically combines it combines a bunch of things together in a
very elegant way and it tries to solve a very unpopular goal so he’s he his
argument it’s like it’s not even about the technology it’s about like the why
the why of this thing needs to exist was like the biggest kind of hurdle for a
lot of people um and he goes into arguing that like everyone actually
thought it was a really bad idea except for like four or five people which is
fascinating because that’s all it took to make this a reality I kinda want to
pause there and have people jump in with any kind of comments on what this meant
for them I mean you just random input did you ever notice then like
the Bitcoin start to took off at the same time then we just came out from the
Ice Age in artificial intelligence like around 2011 what do you mean ice age? I say like
in artificial intelligence we have the Ice Age earlier then we don’t have like
much development you know and that this is what we called our ice age period and
it’s between line let’s say like buttons for a long long time cause we have like
all those academics like you’re writing papers and everything but doing nothing
with them because like we talked about continent or whatever it is because we
don’t have like the functional capability to do something and and we
get out from this Ice Age period in 2011 and at the same time Bitcoin took off in
2011 you’re saying like it’s interesting that
we like that I’ve been at the same time you know yeah yeah and honestly there’s
really not answers to this like sometimes it’s like it’s really hard to
know why timing why certain things happen at a certain time and this is why
if you look at like any technology there’s like there’s like so many
examples they public hundreds and hundreds of examples of technology like
really good technology they just never took off because of the wrong timing and
like basically like something happens where like all ends me and then like
even of imperfect technology like Bitcoin just like takes off because of
timing and this is actually one of the things that you as an investor like I
used to work it andreessen horowitz and like one of the biggest things we have
to think about was like is this the right time it’s about time for this
company or this technology to exist because later things like things things
things it’s all about timing and whether the markets actually ready ready for
this thing and you you need like the infrastructure to support you know super
important yeah the whole argument right if you look at some of the the original
worse is better guy he was running like a lisp company which is AI and he was
talking about how you know they they thought correctness was the most
important thing but really if you look at worse is better I mean the guy even
talks about how he goes back and forth and people that but like um it’s not
correctness it’s simplicity option but I don’t even think
it’s that simple because it’s like you you know it’s possible you know he talks
about you know you need fifty percent and then you can become viral but it’s
possible you know forty-five percent you need to scale to or you need to solve
the problems at some point so it’s not just going viral you have to be able to
write your your product can’t hit a dead end
there’s exactly thanks I don’t know how many links people were following but it
took me a long time yeah this is a brilliant article like whoever
did like the guy the author like he did a really good job of putting together
all the necessary pieces because if you actually follow through on all the links
you just like learn a lot about the history of kind of how I got started all
the objections and like the fact that like even despite these like objections
from really smart computer scientists and like really well-known computer
scientists like it still worked so then the next section talks about like
aesthetics and he says like here’s why it’s ugly and we kind of talked about
like all the reasons above but like one of the few things that he mentions is
that one thing that I found was interesting was like it’s clever to have
a peer-to-peer network distributing updated block switching cheaply and
independently which can be cheaply an independent checked but there’s a ton of
it ugly edge cases which is oh she has not proven to be safe and he himself
says that what happens will be a coin flip at some points like that statement
like what happens when we have coin flip that just something that computer
scientists are used to accepting as okay like you don’t want a like a system like
Bitcion to be a coin flip you don’t want it to just like maybe not work in some
cases but that is that is kind of just how it started and people had to just
let go of the fact that like this thing can it can beautifully work or you can
beautifully not work as well and then he kind of goes into different things and
there’s a really really famous cryptographer like his name is last name
was Chaum and he had already come up with this like really really elegant way to
do anonymous transactions like he was a cryptographer and he had come up with
this technology to do anonymous transactions etc and it was like really
elegant but like no one used it despite the fact that it was elegant and one of
the reasons no one used it probably because it was like it was really
complicated it apart a lot of different parties to play and like
uh it was just probably something that people a lot a lot of
people cared about at the time to be honest like it was it was a time when
the America America was doing really well the world was doing really well
like no one really knew how much privacy is important and then then he talks
about like the whole 21 million bitcoins limit part so as you know there’s only
21 there’s like only a finite I’m on a Bitcoin that can never be produced and
he’s like you know like why did he choose 21 million why why wasn’t it
a rounder number or at least a power of two because like math computer
scientists like like to think your power of two and they don’t like the fact like
something like 21 million which is like just looks like a random
number that was chosen and this is one of my favorite sentence he says the
hash chain does not aspire to record the true reality or figure out who is a
scammer or not but like Wikipedia the hash chain simply mirrors one somewhat
arbitrarily chosen groups consensus and the basically he’s making a comparison a
Bitcoin to Wikipedia like how Wikipedia works is it’s very community driven so
even though we think of Bitcoin as I’m sorry even though we think of Wikipedia
as truth at this day and age because of how accurate it actually is for most
things we could be is highly community driven right it’s all community driven
and so he compares Bitcoin to Wikipedia because bitcoin is in that same ballpark
where Bitcoin works because a majority of the people says this is the truth and
it’s been a very similar trustory as well in that analogy blah blah blah and
then this is he talks about how worse is better I’ll go into all these things um
and then he goes into again like ranting on about like all the different ways
that it’s it’s bad he’s like it’s not is it incentive compatible so what this
means is incentive compatible means so there’s a way to analyze consensus
protocols so that like how could sit how could
protocols work for example in bitcoins cases there’s miners who are
incentivized to do this this action and in certain subject compatibility is just
measuring whether those incentives to do the right thing are higher than the
incentives to do the wrong thing does that make sense like basically you want
you always want people to do the right thing and like incentive compatibility
means that is that is you can prove in probability or math that they’re doing
the right thing is more likely than doing the wrong thing for the
participants in the network and he says in Bitcoin that’s not even we can’t even
prove it like it’s a maybe it’s a toss up you don’t even know if it’s in
putting incentive compatible because Bitcoin was not designed to be
deterministic it’s very probabilistic and then he goes
into an anomaly that doesn’t exist guarantees of transactions being
finalized so again bitcoin is probabilistic and so it’s
never that like a transaction is deterministically final instead you’re
just going based on what everyone says is final we’re not saying like once the
transaction is locked in it’s not like there’s a hundred percent probability
that that transaction can never be reversed because if there is a double
spend attack that can totally be and he goes into talking about like moon
math no he’s saying like nothing about Bitcoin requires like crazy math it’s
very simple math it’s not efficient I didn’t have fast transactions and then
he goes into comparing it to UNIX and this is a very amazing comparison
because unix unix is one of those another one of those things in
technology which was super ugly but it it it won over many many elegant
solutions that existed prior to it some something like Lisp is an example and he
goes on to kind of talk about that comparison and he compares it to like
proverbial cockroaches just like cockroaches UNIX just like never
it spread it grew and then it just got better over time
another example that this when I was reading the scenario in this comparison
to Unix I was also thinking about this is also
very true for JavaScript so if anyone is a web developer so JavaScript is like
was incredibly ugly like everyone hated JavaScript and a lot of people still
hate JavaScript actually they think it’s like the ugliest programming language
ever it was invented in eight days so Brendan Eich basically wrote JavaScript in
eight days under pressure while he was at um I think I was at Mozilla and as I
result it’s so ugly and um but like JavaScript basically dominates web like
you can’t build a web application without using javascript in the modern
day it just that’s that’s what took over and so it’s interesting to hear that
like it’s interesting to see how like some of the ugliest solutions always win
and they barely work in the early days like they barely work but they win
because like the and maybe maybe one of the reasons they win is because like
they they solve the problem at the right time even though it’s ugly and so an
example I can think of is like there’s some applications I’ve used in the past
that are like not really they have they’re like the shittiest UI
reddit in the early days for example like the shittiest UI but like for some
reason it solved a problem that I or like it met a need that I that I wanted
or they had and like I was willing to sacrifice the more elegant solution
because I think this is what worked at the right time so I think like this is a
thing where like people and users are just willing to overcome the ugliness of
technology if it solves a problem for them maybe that’s that’s one reason it
kind of like works in that case if you look at the original worse is better UI
is lowest on the hierarchy so you could trade in everything like you don’t
really care about UI which is kind of funny because Google is kind of like
that right they have the simplest UI you would think oh why don’t you have a
really fancy and they really got penetration of that
yeah that’s another example in Twitter too like Twitter was super ugly for a long time I hated
Twitter right there like this is the worst thing ever and then like the Arab
Spring because I think he talks about that yeah and then I wait maybe it’s
like revolution is revolutionary yeah yeah could I jump in I I think the the
comparisons javascript is is quite interesting when I saw that I was like
oh yeah because javascript is a programming language that it seems like
the developers are figuring out as them as it’s being built so it’s more like
way to add more things and make it better over time so it’s it maps well
with with Bitcoin I think well don’t you think that it’s it basically carries
over some of the the disadvantages of the early framework so that are still
some things that are in the language JavaScript are still being worked on or
patched on because the fundamental the foundation is is quite compromised yeah
good point you’re saying like don’t you think a better system would remove the
headaches and I think this is one of the things of like this is interesting
because I also think I think like once it once a lot of people have put in time
and effort into this like brand or and technology which is JavaScript it’s
really hard for you to create like JavaScript new and like people just
don’t people just don’t want to move over like people get complacent into the
thing that they’re used to and if you just like and they’re willing to kind of
just like go with the flow of what they’re used to I think like it’s not
that easy to just like rewrite a application in a new language that’s
like actually really hard and it goes beyond that right because like
javascript is so embedded into the web and there’s so many APIs it exists on
the javascript has that like you just it’s just a monumental effort to like
try to switch over I think I think because like something like JavaScript like grew like a weed in the early days it just had penetration and
once something has penetration it’s really hard to switch over to a new
thing and this is like actually the same thing I’m seeing and I wondered I’m
curious to see what happens in the next like three to five years with solidity
so solidity is a is a programming language to build a Ethereum smart
contracts and it is by far the ugliest programming language you can ever use it
is slow so inefficient so insecure and just like this like a hodgepodge of of
just shit like it’s so easy to just like really bad right really bad smart
contracts in solidity and like and like there’s so much developer interest
though like a lot of people when they first get started into actually like
programming on the blockchain a lot of people start with the ethereum because
solidity is like the best thing that they can get their hands on that’s like
closest to a real programming language that they can actually like use and
write real contracts with and so now it has like so much penetration and
developer mindshare that even if you come up with like solidity killer 2.0 like I don’t know if people will switch over because they
just have their time and everything interests invested in this like solidity
thing so it might be that like solidity also follows a JavaScript track of just
being incrementally improved and that’s what we stick to I don’t know I could or
I don’t know what will happen it’ll be interesting to see to be honest yeah the
the to point out okay so so for instance I think Ethereum came after Bitcoin as
sort of like an improvement in certain areas so my my rationale is you’d have
various improvements oh I know a few things that aren’t perfect with
ethereum itself so you might have a situation where you have successive
block chains that are progressively improved in that kind of way yeah okay
going back to this and this is what I was saying earlier one of the things I
highlighted here is a cryptographers taste is for
cryptosystems optimized for efficiency and theorems it’s not for systems
optimized for roland for social for their social appeal and so again like
cryptographers in computer scientists want systems that are efficient and that
they’re beautiful and they have they can prove the correctness using their
theorems they’re not about like solving social problems and so like typically an
engineer doesn’t really think from a people or social perspective they like
to think from a math and theorem perspective and so that there’s like
this disconnect here between a technology that might be ugly but it can
solve a really really big social problem and he goes into also comparing it to
digicash so digicash was like another was like an attempt at digital currency
even before Bitcoin existed and even though it’s more efficient it died and no one knows why that died that I I wish
I knew why I died actually I don’t know why I didn’t does anyone have theories you know when digicash
if I remember correctly I think it was not like the close because they have a
lack of funding and visa doesn’t wanna I think the visa tried to buy it and maybe
I have the wrong story but visa tried to buy it or found like try to fund the the
project and I who was behind digicash? I think he refused the offer and after he tried to
self funding doesn’t work out and they’d be in bankruptcy if I’m not like
mistaking there was David Shum so that popular and I think is fairly a lack of
support well I think the biggest thing about Bitcoin right it was a response to
the 2008 crisis just like you have this existential threat oh yeah that’s for
like if you talk to any liberal right they’re like oh my god central points of
failure why because of the 2008 crash yeah 1990 or whatever saying holy shit
the entire system’s gonna come down it’s not even a real thing right yeah again
timing and and I think like as as consumers as as consumers we we never
have to question centralized systems until 2008 like at least not the common
people a lot of people just felt like this is it this is okay everything’s
going well when things are going well people don’t question things as soon as
something goes wrong that’s when people like holy…what what what well let’s
actually understand about the state was is like back then in 2008 student that’s
it I was studying finance it doesn’t even know what does a cds is and
that’s the market at you know it’s that bad I was there and like oh my god ya
know and like one of the beautiful things I think about Bitcoin and
cryptocurrency in general is like it’s our whole generation that gets to enjoy
this technology and potentially use it in the future we are so much more
educated on finance and how current systems work then I would agree that
then the baby boomers are and and so I think that’s a good thing because now we
can actually use all this knowledge that we’ve accumulated and like we pop
because of the Bitcoin and other technologies we went back in history and
we’re like okay like let’s figure out how these systems have worked in the
past it’s figured out like how they work today and let’s figure out a better way
to build them for the future and if did it if this thing doesn’t
exist like we wouldn’t be educated on it which i think is really cool actually
differently and I think like as the financial crisis and everything if we
talk about about this subject is one problem then the the blockchain solve is
actually bottom-up it starts with the application of the loan and after you
can keep a track of the loan along like all the portfolio there then
before you were not allowed to do that it’s all paper-based it and two of the
track you could like if I’m remember correctly I around like six months you
know but in six months then you already resell your portfolio many many many
time you know and it’s crazy and that’s one of the big problems and blockchain
solve actually yeah that’s funny and then this is probably one like this
probably one favorite sentences in the whole blog he says it may be that
bitcoin’s greatest virtue is not as deflation nor its microtransactions but
it’s viral distributed nature it can wait for its opportunity if you sit by
the bank of a river long and if you can wash the bodies of your enemies float by
I love this thing because I think what he’s trying to argue is that like and
and we’re trying to see this also in the markets right like bitcoin is this thing
okay like it took off no it got started in 2009 it took off in 2011 then
there was a cold down cycle where like went out of favor and like no one talked
about it for like three or four years then last year it took off again and
then now is going to another correction people like oh like because gonna die
it’s like if it’s like if dead and so and you just see that like it’s continue to
like survive all these market crashes and just keeps living and it’s like this
like cockroach that you can never get rid of and the reason it’s like that is
because it’s distributed like even if only 10 or 20 or 100 people believe in
it it’s still gonna exist and like that’s really the beauty of something
like Bitcoin you don’t really need some central party to believe in it to to
keep building it to keep it funded for this thing to exist you just need a
handful of people and then it’s impossible to kill it can never die
basically as long as there’s like a few people to believe in it well I guess one
question I have is you know Bitcoin gets the adoption the reason I so I do quite
a bit of speculation but the reason that I don’t have a bunch of Bitcoin is I
think anybody can take over there’s nothing
uniquely I mean this is kind of the point right but there’s nothing unique a
Bitcoin does I think if you saw the consensus and all these kind of bubble
spend problems anybody gets to take bitcoins market share so I guess that’s
both a good thing and are you saying in terms of like a new currency like a new
I don’t know who they might have talked about it at the end of the article or
maybe Nick Szabo talks about in one of the links but it’s like Bitcoin is other
sorry was Edward Snowden there’s a there’s a interview like two days ago or
something yeah and you’re talking about how it has all the right principles but
there’s literally no reason why Bitcoin Bitcoin say that you saying crypto will
do well so I don’t know I think yeah I don’t I just want those yeah and I think
this is this is also something that we were slightly talking about in slack
last week where we talked about how like because these things are distributed and
decentralized in nature you can go fork off and start on own version of the same
thing and like personally I believe in a future where there’s gonna like I
believe like it’s not gonna be one chain dominates all I think there’s gonna be
many many chains and people just kind of subscribe to one or more depending on
like what they believe and what they want to what they want to get out of
that system and so yeah and like for each of those systems like some of them
will might die off really easily because they don’t take off with it’s not much
interest others might live for a long time because it’s like a small group of
people who really believe in that blockchain so it’s like it’ll be
interesting to see how this works like we’ve never like we’re basically going
from a world where we’ve kind of consolidated and centralized everything
and now we’re trying to like break that apart and decentralized everything again
and I just think I really wonder how it plays out
personally I share the same tall viewed and it will be a multi chain
architecture with chain for different like flavor like music
or videos or banking or because each chain each chain is specific in
languages which is SDK you know so you start from there and after that you’re
gonna build your community I don’t believe that’s gonna be like one chain
to rule them all and III saw this like quite in it it will be ineffective in
no way because if you break the chains let’s say what you’re gonna do next yeah
and plus like the reality is every chain okay every chain thank you every like
one chain can’t do everything like Bitcoin for example it’s very slow in
nature so you can’t really it was never really designed I’d argue for an
application scale type of use case it was designed to be sound trustless money
like that’s that’s basically the purpose and Satoshi says it’s like a probably
seventeen times where you think it’s it’s it’s money without a trusted party
like that’s all he says it is and but like obviously Ethereum serves a
very different use case from that it tries to enable this like decentralized
application type of type I use case and so just based on that the fact that like
a single blockchain can’t do everything my it was like that’s a reason why I
think many many block chains will exist and you’ll probably use different ones
that are optimized for different things because in computer science and in
decubitus systems you can’t really get everything like the concept if there’s
one thing you know about distributed systems it’s all about trade-offs you can’t ever
have a perfect system so you have to figure out what you want to optimize and
then what you want to do de-optimize and so every blockchain will optimize for
something but then they’ll make a trade-off somewhere else I think a good
analogy is like programming languages there’s no perfect or best programming
language it’s just some of them are suited for certain applications and the
similar thing can be said for block chains is like certain coins or certain
blockchains are well-suited for certain situations because the way they were
designed fundamentally it has nothing yeah so you can try to like squeeze in
for another use case but it’s just like running uphill you there’s just
something there or lend itself better to being utilized yeah and like and this is
very true in technology as well like I find that the best applications always
solve a single use case and the applications that try to do everything
at once are the one never really work or take off and they’re too complicated
because like they just like it’s they don’t have focus they don’t know what
they want to build they just try to shove a bunch of different features into one
thing and nothing is ever like really really good whereas a system that
really just tries to do one thing really really well well this is kind of once
again the better is worse argument right the reason it’s complicated is they
wanted correctness and his whole point is correct this is not best you want
right in the original scheme it’s like oh if you have a proof you know it’s
like they didn’t have a security proof for Bitcoin until 2015 which is like
insane I think the analogy was like it’s like hitting a hole-in-one twice with
your eyes closed or something like Satoshi to like do this and it for to be like
completely secure and like you didn’t have a proof or anything yeah now that’s
it’s it’s very interesting I’m like eh even today I think there’s like I’m
fascinated that people are not doing more security analysis on Bitcoin yeah
but they have another point maybe we’re not aware of about everything – you know
what do you mean but I say that maybe things happens and we just don’t know
and they patch up before we know and you have maybe the security issue and we
have no way to know because like I’m not a core Bitcoin contributor so how I could know yeah no I think like I mean if it’s big enough
usually like there’s like at least enough people in the in the community
that they’ll go on Twitter and like be like you know this happened
I know then lately they have the bugs here about like I think was the number
of bitcoins and you could issue and it was a white hack then the get in
touch with a Bitcoin core and a depart a patch the issue yeah one question I have
no to hijack but uh it do we think bitcoin is worse I think it’s both I
think there are a lot of things that are kind of dominated and this features but
then I kind of agree with the things that those cryptographers were saying in
that I mean what I understand new thing about Bitcoin in the fault tolerance is
you couldn’t have an unknown number of generals before right yes yeah so like
maybe there is breakthroughs right I mean I feel like if guys that are saying
they’ve been trying to do this for twenty years and well like no no no no
there is a breakthrough no like it looks aesthetically bad
I kind of believe one side I obviously look into it but yes no you’re
absolutely right there’s I don’t think I don’t think Bitcoin was trivial like
Bitcoin is not like it’s not like oh yeah anyone could have put this together
it was it was a very genius way of putting this together and when I when I
think about Bitcoin is gonna sound ridiculous but the analogy that I like
to make to it is like Kanye so Kanye is like he’d never created anything
original he just like he just like does an incredible genius job of putting
together different pieces of music into like this new art and like so Bitcoin in
my eyes is like an art like it’s like this like he went through history you
looked at all these things and then put them together in just the right way for
it to work just good enough this is what open source is awesome right because you
get to take all those pieces together and and put otherwise just you know a
digicasj and all these were like locked in a vault somewhere maybe you
know yeah exactly and the novel thing I think Bitcoin did was like we had the
concept of digital cash before we had the car but we never had and we
never had the concept of a cash being decentralized so that was like
this those combination of those two things really clicked for people as well
like did you cash wasn’t was centralized and then there was like this whole idea
of proof of work but that proof of work was being used for email spam and not
for money so as soon as we connected like digital cash and proof of work it
just like created this like new phenomena where people like oh my god
this makes so much sense no but they start with the libertarian
at the same time there was dreaming about that so you need a community that
dream about what you proposed you know yes that’s fair
that’s really important yeah and actually um we’re gonna kind of close a
clock call off in a couple minutes but talking about libertarian so I’m not
sure if you guys have read Milton Friedman or David Friedman to work our
Thursday AMA is actually with Milton Friedman’s grandson Patrie Friedman
well he’s obviously a libertarian he went off and he started this like
libertarian movement so I agreed and I’m I think this is a good thing to ask
someone with him because he comes from this ethos of like wanting
decentralization he actually believes the way we think you might be
centralization today is very wrong I’m excited to get into that conversation on
Thursday Richard Stallman to just post something about that like lately like
then see like no this is not what I want I want this you know that you’re a bit
wrong so it’s quite interesting because the father of the open-source community
so yeah that’s interesting any more questions or comments oh one more thing
is like I feel like the Bitcoin is worse thing is the reason every time I talk to
someone super technical they don’t know look at my family or whatever I always
get buried right in these conversations because like I can’t hang because some
of these things are right right and maybe the reasons that Bitcoin like I
wish I had this article before we had it but I didn’t read it before Thanksgiving
sort of help right where they’re like no no no no like X Y & Z it’s like oh well
maybe though a feature actually right not about other
question for you yeah like let’s see if we think about layer you know cuz every
like architecture of different layer Bitcoin what is the best layer than it
fit what is the best layer then Bitcoin could fit let’s say you have the base
layer the business logic layer the token layer and after you got like the
settlement layer so where Bitcoin fit in those layer hmm can you like give me
like when you say layer I think like I guess I’m not sure I understand it yeah
okay let’s say a layer of applications okay so what is the best fit for Bitcoin
four layers of applications and each layer of different function with you
what I think he’s trying to say is is people have been talking about the Web3
stack and he’s asking where does Bitcoin fit in the web3 stack
people have been talking about it application layer is that the is it the
execution layer and stuff so where it fit Bitcoin I don’t know it doesn’t really
fit into the web 3 stack analogy I think bitcoin is Bitcoin as a currency
combined with the underlying Bitcoin blockchain that’s like what is a whole
application stack in and of itself like I Bitcoin as an application like I did
like I view the money that the cryptocurrency Bitcoin like currency as
an application because it’s built on top of an a blockchain so to me I don’t
really know if I’m a like A I think the web 3 stack is a theory B I’m not sure
that’s like even the right way to think about it be I think Bitcoin doesn’t
really fit into that web 3 analogy it’s it’s that it was not meant for that to
be honest answer but yeah one way to maybe if we talk
about the financial market when we say that to is like gold
where’s gold fit in the stack you know where does it fit doesn’t fit anywhere
Gold is a hedge against the stack

Comments 1

  • there are all necessary ingredients for life in the Petrie dish of the miller experiment and still, it will not yield life. Evolution of any system is based on many entities brute-forcing against improbability, nothing is really likely (time perspective) and still by the law of large numbers it happens. So, from the ensemble perspective, it's non-ergodic (Peters and Gell-Mann 2014). We socialize some wins this is why it took off. Sry but looking for causalities in non-ergodic processes is BS. It's like asking: "Why did the Bitcoin bubble burst?" implying that such phenomena are externally driven. Those systems mature internally towards a state of high instability (e.g. growth-rate becomes a time finite singularity) so that any external event can trigger the phase transition (burst of Bitcoin or the epiphany of Nakamoto) (see Sornette et al.) … why did the universe took off?, Why did life took off? Why…the answer lies >>within the dynamics<< of the chaotic system and NEVER in the constellation of any external properties.

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