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⭐ Merited by hv_ (5)
Happy new year
2023
Crypto- the end
Build on BSV, there is use & real value also all is set in stone like TCP/IP was many years ago and internet started to CAN grow - on stability needed
Bitcoin was set in stone 10+ years ago. But the implementation got some passing offs
BSV is the only fix and works as a champ
2023
Crypto- the end
Build on BSV, there is use & real value also all is set in stone like TCP/IP was many years ago and internet started to CAN grow - on stability needed
Bitcoin was set in stone 10+ years ago. But the implementation got some passing offs
BSV is the only fix and works as a champ
Happy New Year HV and Happy New Year to all !!!
Bit = data
Coin = money
BSV is Bitcoin !!!
Quote
Asset seizure was possible in original Bitcoin
On July 28, 2010, users discovered that they could “steal” another’s Bitcoin by simply prepending any locked script with OP_TRUE OP_RETURN. Since the opcode OP_RETURN halts execution of script (like a return function in any programming language), it would return the previous value on the stack, OP_TRUE, which returns a true condition allowing spending of anyone’s coins, regardless of their spending conditions.
This “bug” was quickly patched by Satoshi Nakamoto, changing the functionality of OP_RETURN to immediately return false instead. However, with the understanding that Bitcoin does not operate outside of the law and miners would not process transactions with this script realistically, even if it was technically possible, we can now question if this was simply a technical oversight.
Source: https://bitcointalk.org/index.php?topic=532.msg6306#msg6306
Satoshi infamously stated he believed “few nodes will be big server farms.” Thinking this through, this implies large corporations who would not allow crime to occur with impunity on their watch. Furthermore, these large corporate nodes would comply if instructed with freezing orders or asset seizure by government. That communication capability was implemented in Bitcoin early as well via the Alert system. BTC Core developers removed this functionality in 2016.
Today, many in the digital currency space believe asset seizure and freezing to be technically impossible, as the system is “decentralized” and it cannot be done due to being “simple math.” The reality is that the creator had implemented puzzle pieces for this to be possible from the early stages of the network, but due to its immaturity, the subsequent removal of those features have allowed newcomers to control the narrative on why they were removed. For example, regardless of Nakamoto’s intent, BTC Core gave their own subjective, interpretive reasons on why the Alert System should be removed:
Source: Bitcoin Wiki
Source: Bitcoin.org
The original features did not scale due to nodes being possible to run on home computers with little to no capital investment. Unlike large corporations who generate millions in revenue and must be registered legal entities, these home users cannot be trusted to follow judicial instruction, or to not steal another’s assets.
Craig Wright explains this in March 2020:
Source: MetaNet ICU Slack
Even if the OP_TRUE OP_RETURN bug was technically possible on Bitcoin today, nodes would likely reject these scripts as they would essentially be guilty of facilitating crime. Therefore, a simple re-implementation of this “bug” from the original version of Bitcoin would implement the technology possible for miners to be able to freeze and return assets despite the “experts” claiming it is impossible.
If the solution implemented is not making OP_TRUE OP_RETURN scripts possible, then another is an agreement by nodes via a notarized contract. Nodes can now receive instructions from court orders to freeze assets or re-assign coins. This implementation by the Bitcoin Association echoes Wright’s sentiments in February 2022, doubling-down on the concept that network consensus should be achieved outside the technical capabilities of the blockchain:
Source: MetaNet ICU Slack
This concept is a reminder that we live in the real world. Just because something is technically possible to achieve, does not mean it is morally right or legal. Bitcoin cannot scale to be money for the world if loss of possession results in loss of ownership, unlike any other asset in the world. It’s also worth noting that the original Bitcoin white paper states that nodes protect “ownership” and not “possessions.”
After all, Joseph Vaughn-Perling stated that this was crucial to Bitcoin’s mass adoption in May 2016:
Source: Bitcoin Magazine
Watch: Digital Asset Recovery on Bitcoin Explained
https://youtu.be/xLRp7zxeTfM
Source thank you to Joshua Henslee https://coingeek.com/asset-seizure-was-possible-in-original-bitcoin/
On July 28, 2010, users discovered that they could “steal” another’s Bitcoin by simply prepending any locked script with OP_TRUE OP_RETURN. Since the opcode OP_RETURN halts execution of script (like a return function in any programming language), it would return the previous value on the stack, OP_TRUE, which returns a true condition allowing spending of anyone’s coins, regardless of their spending conditions.
This “bug” was quickly patched by Satoshi Nakamoto, changing the functionality of OP_RETURN to immediately return false instead. However, with the understanding that Bitcoin does not operate outside of the law and miners would not process transactions with this script realistically, even if it was technically possible, we can now question if this was simply a technical oversight.
Source: https://bitcointalk.org/index.php?topic=532.msg6306#msg6306
Satoshi infamously stated he believed “few nodes will be big server farms.” Thinking this through, this implies large corporations who would not allow crime to occur with impunity on their watch. Furthermore, these large corporate nodes would comply if instructed with freezing orders or asset seizure by government. That communication capability was implemented in Bitcoin early as well via the Alert system. BTC Core developers removed this functionality in 2016.
Today, many in the digital currency space believe asset seizure and freezing to be technically impossible, as the system is “decentralized” and it cannot be done due to being “simple math.” The reality is that the creator had implemented puzzle pieces for this to be possible from the early stages of the network, but due to its immaturity, the subsequent removal of those features have allowed newcomers to control the narrative on why they were removed. For example, regardless of Nakamoto’s intent, BTC Core gave their own subjective, interpretive reasons on why the Alert System should be removed:
Source: Bitcoin Wiki
Source: Bitcoin.org
The original features did not scale due to nodes being possible to run on home computers with little to no capital investment. Unlike large corporations who generate millions in revenue and must be registered legal entities, these home users cannot be trusted to follow judicial instruction, or to not steal another’s assets.
Craig Wright explains this in March 2020:
Source: MetaNet ICU Slack
Even if the OP_TRUE OP_RETURN bug was technically possible on Bitcoin today, nodes would likely reject these scripts as they would essentially be guilty of facilitating crime. Therefore, a simple re-implementation of this “bug” from the original version of Bitcoin would implement the technology possible for miners to be able to freeze and return assets despite the “experts” claiming it is impossible.
If the solution implemented is not making OP_TRUE OP_RETURN scripts possible, then another is an agreement by nodes via a notarized contract. Nodes can now receive instructions from court orders to freeze assets or re-assign coins. This implementation by the Bitcoin Association echoes Wright’s sentiments in February 2022, doubling-down on the concept that network consensus should be achieved outside the technical capabilities of the blockchain:
Source: MetaNet ICU Slack
This concept is a reminder that we live in the real world. Just because something is technically possible to achieve, does not mean it is morally right or legal. Bitcoin cannot scale to be money for the world if loss of possession results in loss of ownership, unlike any other asset in the world. It’s also worth noting that the original Bitcoin white paper states that nodes protect “ownership” and not “possessions.”
After all, Joseph Vaughn-Perling stated that this was crucial to Bitcoin’s mass adoption in May 2016:
Source: Bitcoin Magazine
Watch: Digital Asset Recovery on Bitcoin Explained
https://youtu.be/xLRp7zxeTfM
Source thank you to Joshua Henslee https://coingeek.com/asset-seizure-was-possible-in-original-bitcoin/
~
Hello BitcoinPsycho, glad to see that you have risen in rank and become a legendary member in the time you have been in this Bitcointalk forum, in view of the colossal time spent here in your studies and sociological sharing. it may be deserved.
That said, I'm sorry that all this time you can't tell the difference between broken software aka BTC that doesn't comply with the white paper (which defines what Bitcoin is) authored by Satoshi Nakamoto, who uses LN a third of trust and fully functional software aka BSV, compliant with the white paper (which defines what Bitcoin is) written by Satoshi Nakamoto, which does not use a trusted third party and which is natively scaled. In all this time you haven't even noticed that the SEGWIT implementation broke what was considered Bitcoin at the time.
I'm sorry to read that you quote Lopp (unless it's you?) a social engineering specialist, blogger, manipulator at will and who doesn't even know the difference between honour, respect and humility. If this is your model, so be it.
In any event. You describe that Bitcoin Satoshi Vision is growing, and that's a good thing. You still don't realize that Bitcoin (BSV) can be the basis of "everything" that digitally exists. The electronic money function was "decided" by its users who had the choice of the technology's direction in 2009. As it happened. Understand that this function is only a very small part of what Bitcoin can accomplish in the service of humanity and the machine it is a convergence enabling the emergence of truth, described in the data that is stored in it. As the basis of everything, this database will only grow stronger and stronger.
For the moment people are adding what they want to it, including many things that are totally useless, like what three quarters of people do when they use a machine as a hobby, which has become totally addictive, losing (too) often the notion of reasonability.
It is very unfortunate that Bitcoin has been infiltrated from the inside for many years, as it was considered unstoppable by governments (who sometimes were not even told about Bitcoin). Over the years Bitcoin XBT (as the original ticker was given to it from its "trade" on the MtGox exchange). The same code on which it was programmed to be made limited and obsolete, not scalable. For example why do you think there is no SPV deployment in the broken version? Do you even understand the function, have you even read the white paper twice?
Going back to your concern that BSV is a fork of BCH which itself is a fork of BTC which itself is a fork of XBT. So be aware that the Bitcoin protocol resides in each of these versions. Only these versions are broken except on BSV, I'll explain why without going into too much detail; the code when BTC was created was intended to increment SEGWIT, other OP_CODE (Bitcoin's harmonious function to put it simply) were outright removed year after year. making BTC dependent on trusted third parties to scale up. In the BCH implementation these same (complete) OP_CODEs are still missing, and other conformities I won't describe here. Then there was BSV, whose full functions were "cleaned up" and put back into use to restore Bitcoin's harmony. And the exploitation of SPVs as described by the white paper written by Satoshi Nakamoto.
About "Satoshi Nakamoto", note that year after year an individual named Dr. Craig Steven Wright was found by two magazines and then doxxed (his identity was revealed against his will. Threats, journalists in colossal waves, the tax department, the secret service, the police, the curious, the fans. A lot to handle for one man, don't you think?
So this "individual" doctoral student, afflicted since birth with a syndrome that does not allow him to function socially as sociological codes establish their norms; he has a very different way of looking at things, it's called perspective, he becomes passionate as he experiences life, acquires specific knowledge that he puts to good use to one day create Bitcoin and continue to enhance it year after year.
About the creation of Bitcoin, haven't you noticed that it allows for many new business models? Haven't you noticed that it is a game changer, especially in industries where Google, Amazon, Facebook, Meta, Microsoft, Apple and all the BigData players feel threatened instead of embracing and carrying the technology.
As an aside my dear BitcoinPsycho, haven't you noticed that year after year the perversion of the internet has led to the generalisation and trivialisation of violence (psychological, psychic, verbal, physical ...) but above all the emergence and irradiation of capital sins such as pride, gluttony (or addiction), laziness (or acedia, spiritual neglect), lust, greed, anger and envy. They are "capital" in the sense that they are the cause, and therefore the head, of other sins; they are the motives for committing all crimes. All of this on the hegemony of money. So Bitcoin is a very deep digital finger to this whole circus because it makes the perpetrators take responsibility for the extreme human experience, but few people know that.
Finally I would very much like to share this quote which says that "When a clown moves into a palace, he does not become a king. It is the palace that becomes a circus." I think some readers will recognize themselves in this quote, which is not necessarily negative. BTC is not Bitcoin as described in the white paper, a fact that can be verified very easily by auditing the source code which is public.
I hope that these few lines will resonate with you somewhere. May they bring you knowledge, harmony and inner peace.
Best wishes to you !
Romain.
PS: 🔎 https://craigwright.net/bitcoin-white-paper.pdf
Sad old git section
20 nodes lol
20 nodes lol
Yes BSV is decentralised as you have just pointed out.
⭐ Merited by Bitcoin SV (BSV) (4)
Quote
Zero-Knowledge private machine learning on Bitcoin
This post was first published on Medium.
Previously, we have demonstrated running a fully fledged deep neural network on Bitcoin, where both the input and the model of the machine learning (ML) algorithm are public. In practice, it is often desirable to keep the input or model off chain and thus private, while still ensuring the ML algorithm is run faithfully. We achieve this by applying Zero-Knowledge Proof (ZKP) to ML.
Zero-knowledge on-chain machine learning
There are two categories of private information when it comes to ML.
Private input
The input to the model is hidden, but the model itself is public. This is particularly useful for applications involving sensitive and private data such as financial records, biometric data (e.g., fingerprint, face), medical records, and location information. For example, one can prove he is over 21 years old without disclosing his age. Or an insurance company uses a credit score model for loan approvement. The model is made public for transparency, but the inputs, such as an applicant’s salary and bank statements, should be kept confidential.
Private model
The input to the model is public, but the model itself is private, often because it is intellectual property. For instance, we use a tumor classification model owned by a private company to detect tumors from images. The model is certified to have 99% accuracy when classifying a public dataset. The company can just publish the cryptographic commitment of its model, i.e., hash of all model parameters. We can be sure the model is legitimate, while not seeing it. The cryptographic commitment also ensures the same model is applied to everyone, for fairness. This is desired in, e.g., an admission model which ranks candidates based on their public information.
ZKP is a natural fit for retaining privacy when using on-chain ML, because it can hide information off-chain, while proving ML inference is correct.
Classifying Handwritten Digits
As a demonstration, we have implemented a simple model for the classification of handwritten digits. The model was trained using labeled examples from the MNIST dataset. The architecture of the model is very similar to the one we used for our fully on-chain model.
We use ZoKrates to build ZK circuits, which can make any inputs private trivially, by simply declaring it using keyword private.
Private input
From the above code, we can see that the inputs of the model, model_inputs, are passed as a private parameter, meanwhile the model parameters (weights and biases) are public. Once we pass the input to the model, the circuit performs all the model operations on the data and outputs the models prediction/ class.
Private model
The following is the code for making the model private.
Here instead of passing the models input data, we pass the models parameters themselves as private. Using these secret parameters, the circuit performs all the necessary operations of the model and compares the results against a batch of test examples. If the model reaches a certain classification accuracy (CA) threshold, the execution succeeds.
The full code of both the first scenario and the second scenario can be found on GitHub.
Summary
We have demonstrated how we can leverage the ZK property of zk-SNARKS for machine learning on chain. This allows us to hide specific parts of the ML computation.
References
https://0xparc.org/blog/zk-mnist
https://youtu.be/dcw1hGg4iMM
Watch: The BSV Global Blockchain Convention panel, Blockchain for Digital Transformation of Nations
https://youtu.be/PJWPfb-8Ebc
Big Thanks to Xiaohui Liu. Source: https://coingeek.com/zero-knowledge-private-machine-learning-on-bitcoin/
This post was first published on Medium.
Previously, we have demonstrated running a fully fledged deep neural network on Bitcoin, where both the input and the model of the machine learning (ML) algorithm are public. In practice, it is often desirable to keep the input or model off chain and thus private, while still ensuring the ML algorithm is run faithfully. We achieve this by applying Zero-Knowledge Proof (ZKP) to ML.
Zero-knowledge on-chain machine learning
There are two categories of private information when it comes to ML.
Private input
The input to the model is hidden, but the model itself is public. This is particularly useful for applications involving sensitive and private data such as financial records, biometric data (e.g., fingerprint, face), medical records, and location information. For example, one can prove he is over 21 years old without disclosing his age. Or an insurance company uses a credit score model for loan approvement. The model is made public for transparency, but the inputs, such as an applicant’s salary and bank statements, should be kept confidential.
Private model
The input to the model is public, but the model itself is private, often because it is intellectual property. For instance, we use a tumor classification model owned by a private company to detect tumors from images. The model is certified to have 99% accuracy when classifying a public dataset. The company can just publish the cryptographic commitment of its model, i.e., hash of all model parameters. We can be sure the model is legitimate, while not seeing it. The cryptographic commitment also ensures the same model is applied to everyone, for fairness. This is desired in, e.g., an admission model which ranks candidates based on their public information.
ZKP is a natural fit for retaining privacy when using on-chain ML, because it can hide information off-chain, while proving ML inference is correct.
Classifying Handwritten Digits
As a demonstration, we have implemented a simple model for the classification of handwritten digits. The model was trained using labeled examples from the MNIST dataset. The architecture of the model is very similar to the one we used for our fully on-chain model.
We use ZoKrates to build ZK circuits, which can make any inputs private trivially, by simply declaring it using keyword private.
Private input
Code:
def main(private u64[N_NODES_IN] model_inputs
u64[N_NODES_HL][N_NODES_IN] weights0, \
u64[N_NODES_OUT][N_NODES_HL] weights1, \
u64[N_NODES_HL] biases0, \
u64[N_NODES_OUT] biases1, \) {
u64[N_NODES_HL] step0 = apply_weights0(model_inputs, weights0);
u64[N_NODES_HL] step1 = add_biases0(step0, biases0);
u64[N_NODES_HL] step2 = apply_relu(step1);
u64[N_NODES_OUT] step3 = apply_weights1(step2, weights1);
u64[N_NODES_OUT] step4 = add_biases1(step3, biases1);
u64 res = argmax(step4);
assert(res == TARGET_CLASS);
return;
}
u64[N_NODES_HL][N_NODES_IN] weights0, \
u64[N_NODES_OUT][N_NODES_HL] weights1, \
u64[N_NODES_HL] biases0, \
u64[N_NODES_OUT] biases1, \) {
u64[N_NODES_HL] step0 = apply_weights0(model_inputs, weights0);
u64[N_NODES_HL] step1 = add_biases0(step0, biases0);
u64[N_NODES_HL] step2 = apply_relu(step1);
u64[N_NODES_OUT] step3 = apply_weights1(step2, weights1);
u64[N_NODES_OUT] step4 = add_biases1(step3, biases1);
u64 res = argmax(step4);
assert(res == TARGET_CLASS);
return;
}
From the above code, we can see that the inputs of the model, model_inputs, are passed as a private parameter, meanwhile the model parameters (weights and biases) are public. Once we pass the input to the model, the circuit performs all the model operations on the data and outputs the models prediction/ class.
Private model
The following is the code for making the model private.
Code:
def main(private u64[N_NODES_HL][N_NODES_IN] weights0, \
private u64[N_NODES_OUT][N_NODES_HL] weights1, \
private u64[N_NODES_HL] biases0, \
private u64[N_NODES_OUT] biases1, \
u64[N_TEST_EXAMPLES][N_NODES_IN] test_examples, \
u64[N_TEST_EXAMPLES] test_labels) {
u32 mut correct = 0;
for u32 idx_test_example in 0..N_TEST_EXAMPLES {
u64[N_NODES_HL] step0 = apply_weights0(test_examples[idx_test_example], weights0);
u64[N_NODES_HL] step1 = add_biases0(step0, biases0);
u64[N_NODES_HL] step2 = apply_relu(step1);
u64[N_NODES_OUT] step3 = apply_weights1(step2, weights1);
u64[N_NODES_OUT] step4 = add_biases1(step3, biases1);
u64 res = argmax(step4);
u32 to_add = if res == test_labels[idx_test_example] { 1 } else { 0 };
correct = correct + to_add;
}
assert((correct * 100) / (N_TEST_EXAMPLES * 100) >= TARGET_CA);
return;
}
private u64[N_NODES_OUT][N_NODES_HL] weights1, \
private u64[N_NODES_HL] biases0, \
private u64[N_NODES_OUT] biases1, \
u64[N_TEST_EXAMPLES][N_NODES_IN] test_examples, \
u64[N_TEST_EXAMPLES] test_labels) {
u32 mut correct = 0;
for u32 idx_test_example in 0..N_TEST_EXAMPLES {
u64[N_NODES_HL] step0 = apply_weights0(test_examples[idx_test_example], weights0);
u64[N_NODES_HL] step1 = add_biases0(step0, biases0);
u64[N_NODES_HL] step2 = apply_relu(step1);
u64[N_NODES_OUT] step3 = apply_weights1(step2, weights1);
u64[N_NODES_OUT] step4 = add_biases1(step3, biases1);
u64 res = argmax(step4);
u32 to_add = if res == test_labels[idx_test_example] { 1 } else { 0 };
correct = correct + to_add;
}
assert((correct * 100) / (N_TEST_EXAMPLES * 100) >= TARGET_CA);
return;
}
Here instead of passing the models input data, we pass the models parameters themselves as private. Using these secret parameters, the circuit performs all the necessary operations of the model and compares the results against a batch of test examples. If the model reaches a certain classification accuracy (CA) threshold, the execution succeeds.
The full code of both the first scenario and the second scenario can be found on GitHub.
Summary
We have demonstrated how we can leverage the ZK property of zk-SNARKS for machine learning on chain. This allows us to hide specific parts of the ML computation.
References
https://0xparc.org/blog/zk-mnist
https://youtu.be/dcw1hGg4iMM
Watch: The BSV Global Blockchain Convention panel, Blockchain for Digital Transformation of Nations
https://youtu.be/PJWPfb-8Ebc
Big Thanks to Xiaohui Liu. Source: https://coingeek.com/zero-knowledge-private-machine-learning-on-bitcoin/
Dear friends & #GPU #AMD #NVIDIA owners this is for you !
#ETH is becoming obsolete for POW operation but #RADIANT #RXD is not.
The hashing power of your video card seems to be useful to help secure the launch of the RADIANT RXD network !
🚀 https://radiantblockchain.org/
Dear Ethereum cryptophile friends, again THANK YOUfor your big hashrate support 🙏 on the RADIANT RXD network, thanks to you and all the crypto community, the RXD blockchain could reach a high level of startup !
Re: [ANN] Radiant [RXD] - Layer1 blockchain 🔵 SHA512-256 - PoW - GPU/ASIC mining
⭐ Merited by Do_zzze (7)
Re: [ANN] Radiant [RXD] - Layer1 blockchain 🔵 SHA512-256 - PoW - GPU/ASIC mining
Wow!!! Glad and surprised to see you here $Romain so you follow RADIANT!?
Yes, I would like to see how this project develops and what it can achieve technically. This proof of native induction is very interesting and different from anything else out there.
Although in normal circumstances built indexing services can be like microservices built on the protocol. Part of the mining revenue stream to provide computation. RADIANT uses a new opcode that forces the miner to sort for free, it is a very different model as there is really no middleman. On a large scale, this is a new approach that I am curious to discover. Especially for tx indexers. Who knows who will be the Google of blockchain...
Re: [ANN] Radiant [RXD] - Layer1 blockchain 🔵 SHA512-256 - PoW - GPU/ASIC mining
don't quite understand how new or old the idea of this blockchain is, only know the twitter account goes back to 2019. first gut feeling is this is a Bitcoin with large block size. and store extra data the chain cannot hold else where.
~
~
Very good question. I read one of the presentations of RADIANT on Tweeter here more precisely,
https://twitter.com/RadiantLayerOne/status/1572057331772592128/
"What is remarkable about Radiant's system of proof by induction is that there are no additional clues. However, it works as if there were nevertheless a single global clue.
This is important for contract calls, unique NFTs, unforgeable L1 tokens. Zero overhead."
~
seems the Eth merge help the harsh rate spike.
seems the Eth merge help the harsh rate spike.
Yes, 🙏 thankfully the ETHEREUM Merge event that occurred as this frees up power for other scalable and unlimited networks like RADIANT RXD. Unlike ETH which has moved to POS, RADIANT continues to operate POW. This is a good thing for RADIANT blockchain.
Me & many users are looking forward to seeing the first applications developed on RADIANT to see the ecosystem develop 🚀
Why Craig Wright is still wants to show that he is Satoshi? Maybe it’s better to start developing a Bitcoin SV?
IDK but if you want to know Craig Wright's story under oath it is available here:
https://coingeek.com/?s=Granath+v+Wright
https://twitter.com/kurtwuckertjr/status/1570033106282844161/
That said, Bitcoin SV is being developed. See the nomenclature of the for more technical information here [url]https://bitcoinsv.com/]https://unboundedcapital.com/bsv-ecosystem/url] for more technical information here [url]https://bitcoinsv.com/
Here's the direct coverage thread regarding the ongoing Craig Wright aka Satoshi Nakamoto (the defendant) Vs Magnus Granath aka Hodlonaut (the attacker) trial.
As a reminder Granath has already changed his case from "Craig is a fraud" claiming to be Satoshi to "Craig uses fraudulent methods" to prove he is Satoshi. This is a major change.
However the reading of the depositions is 🤯 overwhelming.
https://twitter.com/kurtwuckertjr/status/1569940547875266560/
Dear friends & #GPU #AMD #NVIDIA owners this is for you !
#ETH is becoming obsolete for POW operation but #RADIANT #RXD is not.
The hashing power of your video card seems to be useful to help secure the launch of the RADIANT RXD network !
🚀 https://radiantblockchain.org/
Quote
Kurt Wuckert Jr. talks history of Bitcoin, Web3 and BSV on No BS Crypto podcast
https://www.youtube.com/watch?v=B_Rq2ZyFvDE
CoinGeek’s Chief Bitcoin Historian Kurt Wuckert Jr. joined the No BS Crypto podcast to talk about the current industry, including Web 3.0, the history and future of Bitcoin, and much more. Watch it via the link or read a full written summary below.
Getting a job in web 3.0
No BS Crypto host Kyren begins by asking Wuckert what his advice is for someone looking for a job in Web 3.0. He replies that the computer science problems have largely been solved, so the best thing to do is start a business that solves real problems, using blockchain to solve a problem that can’t be solved another way.
The current climate in the industry
Wuckert gives his thoughts on the current digital currency industry. He says it’s not maturing; it’s gotten worse in the past few years. In fact, he still trusts the banks more than “crypto” people, explaining that criminals, grifters, and vipers are all the way down.
Considering who these people may be, Wuckert has a theory that many of them work on Wall Street and moonlight in the digital currency industry. He believes we’re in a bear market for at least the next year, and the dominos haven’t even begun to fall yet. Before we’re done, Wuckert believes we might see someone go to jail or face huge fines.
Will there be one blockchain to rule them all?
Wuckert acknowledges there will be one blockchain. He says the history of technology shows there are competing standards early on. For example, he asks us to look at the internet; there were many intranets early on, but ultimately, they came up with protocols and standardized them.
“Bitcoin was designed to remove friction,” Wuckert tells us, and only Bitcoin SV (BSV) still has these capabilities. There will still be other blockchains in the future, as there are still intranets, but they’ll be niche, whereas BSV will be like the internet.
Wuckert believes that BSV will win because companies will start doing their due diligence. For example, when they need to do a billion transactions a week on a public blockchain, they’ll find BSV. There’s no real competition.
Any advice for speculators?
Wuckert tells us to remember that everybody in the industry has a conflict of interest. Everyone has a strong opinion and is financially motivated to get you to agree with them in this industry.
Going further, he reminds us that the key to success in investing is being early and buying things when people think it’s crazy to do so. He says to invest your beer money, not your rent money, and make sure your financial life is taken care of. Likewise, he advises us to pay little attention to influencers out to line their pockets.
On Bitcoin as outlined in the white paper
Wuckert outlines Bitcoin as it was supposed to be per the 2008 white paper. First, he explains that Satoshi solved the double spending problem. He reminds us that the white paper opens by talking about commerce on the internet and deals with the problem of the cost of doing business on it.
Looking back, Wuckert reflects that when the white paper was released, the payment options were PayPal and credit cards. Satoshi stated that he thought a $5 minimum transaction was unacceptable and that small casual payments matter, and Bitcoin was his solution to this problem.
Wuckert reminds us that this isn’t a huge problem if you live in the ‘Anglosphere,’ or the richest half of the world. However, people who live on a lot less need to be able to spend $0.50 or less per transaction, and if they can spend that online between each other, that’s a huge deal. This is what Satoshi wanted to unlock, he tells us.
The popular narrative today is that all of this is false and that Bitcoin can’t solve the problem Satoshi outlined. BTC maximalists and influencers prefer to paint Bitcoin as a store-of-value and savings technology, but there’s no denying what Satoshi wrote. Sadly, most people don’t read what he wrote and simply see Bitcoin as a tool for speculation.
How has Bitcoin changed?
Wuckert points directly to governance in general. He says that not too many people talk about this. He explains how in modern nation-states, the intelligentsia makes decisions, and working people don’t have the time, energy, or sometimes knowledge to fight back. He outlines how it’s the same in Bitcoin; a small group of elite core developers has taken over the project. You’re made to feel that geniuses are in control and to leave it to them, but this isn’t how it was supposed to be.
Bitcoin is not supposed to be governed from above like this. It’s supposed to be governed by proof-of-work. Being in the mining business himself, Wuckert says that most miners lose money for years and make it back in bull markets, and that’s how it’s supposed to be because it ensures that people who really care about it have the most hash power on the network.
Proof-of-stake versus proof-of-work
Giving his thoughts on the proof-of-stake consensus mechanism, Wuckert says it’s both an overt and a subversive scam. While people like this because they think it’s efficient, in reality, it’s not because the incentives are misaligned.
In a proof-of-stake system, the rich get richer by holding the most tokens, and eventually, nobody can compete with them. “You will never catch up with whoever bought the most Ethereum first,” Wuckert reminds us. They’ll get exponentially richer and will be able to buy the value of everyone else, completely controlling the network for all time.
By contrast, with proof-of-work, whoever provides the most value wins. When they stop being the best, their blocks stop being built. This competitive system allows new entrants to challenge big players and gain an edge by innovating and competing.
Will an increase in hash rate lead to centralization?
Wuckert believes that hash power is going to go down over time. The block subsidy is reduced as time goes on, which disincentivizes raw hashing. Eventually, the subsidy will be replaced by transaction fees, he reminds us. Having a network with great connectivity and the maximum number of transactions is hugely important in this scenario. Clearly, BSV is built to win in this phase.
What incentivizes full nodes?
Wuckert states that data is money. “There is nothing more valuable than data,” he continues, noting that it’s the most undervalued commodity right now. There’s lots of value to be unlocked, and if you’re the person who controls the data, that’s where the money is in the long run. The ability to process it is a huge business opportunity.
Wuckert’s GorillaPool has mined blocks at 4GB. However, in his mind, that’s still small. He says that in 15 years, he believes they’ll be competing with AT&T and Verizon.
“They’ll swoop in suddenly,” he predicts.
The differences between BTC and BSV
Wuckert opens by explaining the Bitcoin civil war about how to scale Bitcoin. He recalls how the BTC Core developers made a fundamental change by removing the chain of digital signatures and replacing it with a hash of them outside the block—=https://coingeek.com/the-risks-of-segregated-witness-problems-under-evidence-laws/SegWit. This was controversial and caused the BCH split in August 2017. After some time, BCH developers wanted to make similar fundamental protocol changes, so BSV and BCH split. It’s important to note that this happened because BSV wanted to stay with the original design, whereas others didn’t.
With BSV, there’s no protocol to set block size limits, Wuckert reminds us. It’s up to the node operator to set the limits. Restoring the Bitcoin script stack also allows for smart contracts, general computation, and more, turning Bitcoin into a distributed computer. BTC and BCH developers have turned off many of these features, limiting what Bitcoin can do and giving rise to endless unnecessary blockchains.
BTC & BSV white papers and forks
Wuckert explains that the word fork is used in different ways in Bitcoin. It commonly means a copy and paste of the code with some tweaks. He explains that Bitcoin has an MIT license that allows such changes, but those who make such changes have to change their name. It’s open and flexible, just as Satoshi wanted, but you can’t just use the Bitcoin name.
Speaking about the various ‘soft forks,’ Wuckert explains that legacy Bitcoin nodes can’t validate almost any transactions that happen on them today.
“If Bitcoin isn’t a rules enforcement network, what is it?” he asks.
He says Litecoin is a true Bitcoin fork (note how it changed the name), and Bitcoin Cash is just a protocol scam. Drilling down on the difference between a protocol and an implementation, Wuckert gives the example of automobiles. The automobile is a protocol, whereas Ford and other brands are implementations.
These days, people want to define BTC as Bitcoin because it has the most hash power. Wuckert asks, “does nothing else matter?” For example, removing signatures literally breaks what Satoshi defined as a Bitcoin, yet people overlook that when dealing with BTC. If anyone brings this up, BTC advocates resort to tribalism and attacks. “They are afraid of people digging into the process,” Wuckert explains. By contrast, he is open and transparent because his ideas are thought out, and he doesn’t mind free discussion about them.
Why is BSV disliked so much?
Wuckert gives several reasons why BSV is delisted by most exchanges and hated by many industry influencers.
First, he notes that a lot of money is tied up in the idea that Bitcoin doesn’t scale. Billions of dollars have been invested in companies like Block, Lightning Labs, and similar firms. All of this is based on the idea that Bitcoin doesn’t scale and is a settlement technology. So, if Bitcoin can scale on-chain, there’s no reason for Blockstream or Lightning Labs to exist, and many people will lose money, he explains.
The second reason is BSVs association with Dr. Craig Wright. Wuckert says that if he’d been a small blocker, he’d be on the board at Blockstream and would be lauded. However, he’s a big blocker, and he says the small blockers like Adam Back are wrong, calling them out and refusing to comply with their wishes. Wuckert thinks he’s disliked because he doesn’t live up to their vision of what they imagined Satoshi to be. Rather than an altruistic anarchist, he’s a somewhat grumpy autistic Australian who is questioning what made many get rich for doing very little work.
Why don’t people believe Craig Wright is Satoshi?
Wuckert answers that most people are simply being told what to believe. On top of this, there are people like Arthur van Pelt who have written 100,000 words painting Dr. Wright as a scammer. Wuckert wonders who’s paying him since normal people don’t have the time to do this sort of thing.
Again, Wuckert emphasizes that people are defending their portfolios. Dr. Wright is like a snake in the garden; many people just want to get rid of him instinctually. However, Dr. Wright appears to love it and thrive on it. He doesn’t care for the opinions of his detractors and is independently wealthy. He’s a very long-term thinker and doesn’t care about the insignificant opinions of today.
What’s one piece of evidence to support Craig Wright’s claims?
According to Wuckert, the best evidence that Dr. Wright is Satoshi Nakamoto is that he hasn’t gone away. There’s so much money to be made by scamming in this industry, yet he has never raised funds, launched an ICO, or asked anyone for money. On the contrary, he tells people to cash out and stay away from speculating while working diligently in research and development. He stands on principles and doesn’t care about short-term profit.
Meanwhile, Michael Saylor from MicroStrategy (NASDAQ: MSTR), who lost $13 billion in the Dot Com crash, is encouraging people to mortgage their homes and buy BTC. In Wuckert’s mind, that’s what a scam looks like.
Digging deeper, Wuckert reflects that Bitcoin is an eccentric piece of technology. It involves economics, computer science, and several other disciplines. It just so happens that Dr. Wright is a polymath with high-level degrees in these areas.
Yet more evidence is how he explains features that BTC Core people shut off because they didn’t understand them. Dr. Wright explains in depth why they exist. Wuckert gives examples, citing how he described the reason for the double hash and that the Bitcoin script enabled smart contracts. He has been proven right about that when everyone else dismissed it.
IPv4/IPv6, micropayments, and IoT
Wuckert explains how Bitcoin and IPv6 can be integrated to create a new, truly peer-to-peer world. For those who don’t know, he explains that IPv4 was designed long ago and has run out of unique IP addresses. IPv6 is a solution because it allows exponentially more IP addresses to be created. IPv6 allows the transmission of peer-to-peer data rather than via servers as IPv4 necessitates. This will enable devices to send packets back and forth directly.
On BSV, direct peer-to-peer transactions are also possible. You then send it to the network to ensure it hasn’t been double spent. This way, IPv6 and Bitcoin can work together, allowing direct payments to be sent globally for the first time.
Watch: The BSV Global Blockchain Convention panel, The Future World with Blockchain
https://www.youtube.com/watch?v=v9hDGDoy1mM
Thanks CoinGeek’s Chief Bitcoin Historian Kurt Wuckert Jr. joined the No BS Crypto podcast and to Gavin Lucas. Source:
https://coingeek.com/kurt-wuckert-jr-talks-history-of-bitcoin-web3-and-bsv-on-no-bs-crypto-podcast/
https://www.youtube.com/watch?v=B_Rq2ZyFvDE
CoinGeek’s Chief Bitcoin Historian Kurt Wuckert Jr. joined the No BS Crypto podcast to talk about the current industry, including Web 3.0, the history and future of Bitcoin, and much more. Watch it via the link or read a full written summary below.
Getting a job in web 3.0
No BS Crypto host Kyren begins by asking Wuckert what his advice is for someone looking for a job in Web 3.0. He replies that the computer science problems have largely been solved, so the best thing to do is start a business that solves real problems, using blockchain to solve a problem that can’t be solved another way.
The current climate in the industry
Wuckert gives his thoughts on the current digital currency industry. He says it’s not maturing; it’s gotten worse in the past few years. In fact, he still trusts the banks more than “crypto” people, explaining that criminals, grifters, and vipers are all the way down.
Considering who these people may be, Wuckert has a theory that many of them work on Wall Street and moonlight in the digital currency industry. He believes we’re in a bear market for at least the next year, and the dominos haven’t even begun to fall yet. Before we’re done, Wuckert believes we might see someone go to jail or face huge fines.
Will there be one blockchain to rule them all?
Wuckert acknowledges there will be one blockchain. He says the history of technology shows there are competing standards early on. For example, he asks us to look at the internet; there were many intranets early on, but ultimately, they came up with protocols and standardized them.
“Bitcoin was designed to remove friction,” Wuckert tells us, and only Bitcoin SV (BSV) still has these capabilities. There will still be other blockchains in the future, as there are still intranets, but they’ll be niche, whereas BSV will be like the internet.
Wuckert believes that BSV will win because companies will start doing their due diligence. For example, when they need to do a billion transactions a week on a public blockchain, they’ll find BSV. There’s no real competition.
Any advice for speculators?
Wuckert tells us to remember that everybody in the industry has a conflict of interest. Everyone has a strong opinion and is financially motivated to get you to agree with them in this industry.
Going further, he reminds us that the key to success in investing is being early and buying things when people think it’s crazy to do so. He says to invest your beer money, not your rent money, and make sure your financial life is taken care of. Likewise, he advises us to pay little attention to influencers out to line their pockets.
On Bitcoin as outlined in the white paper
Wuckert outlines Bitcoin as it was supposed to be per the 2008 white paper. First, he explains that Satoshi solved the double spending problem. He reminds us that the white paper opens by talking about commerce on the internet and deals with the problem of the cost of doing business on it.
Looking back, Wuckert reflects that when the white paper was released, the payment options were PayPal and credit cards. Satoshi stated that he thought a $5 minimum transaction was unacceptable and that small casual payments matter, and Bitcoin was his solution to this problem.
Wuckert reminds us that this isn’t a huge problem if you live in the ‘Anglosphere,’ or the richest half of the world. However, people who live on a lot less need to be able to spend $0.50 or less per transaction, and if they can spend that online between each other, that’s a huge deal. This is what Satoshi wanted to unlock, he tells us.
The popular narrative today is that all of this is false and that Bitcoin can’t solve the problem Satoshi outlined. BTC maximalists and influencers prefer to paint Bitcoin as a store-of-value and savings technology, but there’s no denying what Satoshi wrote. Sadly, most people don’t read what he wrote and simply see Bitcoin as a tool for speculation.
How has Bitcoin changed?
Wuckert points directly to governance in general. He says that not too many people talk about this. He explains how in modern nation-states, the intelligentsia makes decisions, and working people don’t have the time, energy, or sometimes knowledge to fight back. He outlines how it’s the same in Bitcoin; a small group of elite core developers has taken over the project. You’re made to feel that geniuses are in control and to leave it to them, but this isn’t how it was supposed to be.
Bitcoin is not supposed to be governed from above like this. It’s supposed to be governed by proof-of-work. Being in the mining business himself, Wuckert says that most miners lose money for years and make it back in bull markets, and that’s how it’s supposed to be because it ensures that people who really care about it have the most hash power on the network.
Proof-of-stake versus proof-of-work
Giving his thoughts on the proof-of-stake consensus mechanism, Wuckert says it’s both an overt and a subversive scam. While people like this because they think it’s efficient, in reality, it’s not because the incentives are misaligned.
In a proof-of-stake system, the rich get richer by holding the most tokens, and eventually, nobody can compete with them. “You will never catch up with whoever bought the most Ethereum first,” Wuckert reminds us. They’ll get exponentially richer and will be able to buy the value of everyone else, completely controlling the network for all time.
By contrast, with proof-of-work, whoever provides the most value wins. When they stop being the best, their blocks stop being built. This competitive system allows new entrants to challenge big players and gain an edge by innovating and competing.
Will an increase in hash rate lead to centralization?
Wuckert believes that hash power is going to go down over time. The block subsidy is reduced as time goes on, which disincentivizes raw hashing. Eventually, the subsidy will be replaced by transaction fees, he reminds us. Having a network with great connectivity and the maximum number of transactions is hugely important in this scenario. Clearly, BSV is built to win in this phase.
What incentivizes full nodes?
Wuckert states that data is money. “There is nothing more valuable than data,” he continues, noting that it’s the most undervalued commodity right now. There’s lots of value to be unlocked, and if you’re the person who controls the data, that’s where the money is in the long run. The ability to process it is a huge business opportunity.
Wuckert’s GorillaPool has mined blocks at 4GB. However, in his mind, that’s still small. He says that in 15 years, he believes they’ll be competing with AT&T and Verizon.
“They’ll swoop in suddenly,” he predicts.
The differences between BTC and BSV
Wuckert opens by explaining the Bitcoin civil war about how to scale Bitcoin. He recalls how the BTC Core developers made a fundamental change by removing the chain of digital signatures and replacing it with a hash of them outside the block—=https://coingeek.com/the-risks-of-segregated-witness-problems-under-evidence-laws/SegWit. This was controversial and caused the BCH split in August 2017. After some time, BCH developers wanted to make similar fundamental protocol changes, so BSV and BCH split. It’s important to note that this happened because BSV wanted to stay with the original design, whereas others didn’t.
With BSV, there’s no protocol to set block size limits, Wuckert reminds us. It’s up to the node operator to set the limits. Restoring the Bitcoin script stack also allows for smart contracts, general computation, and more, turning Bitcoin into a distributed computer. BTC and BCH developers have turned off many of these features, limiting what Bitcoin can do and giving rise to endless unnecessary blockchains.
BTC & BSV white papers and forks
Wuckert explains that the word fork is used in different ways in Bitcoin. It commonly means a copy and paste of the code with some tweaks. He explains that Bitcoin has an MIT license that allows such changes, but those who make such changes have to change their name. It’s open and flexible, just as Satoshi wanted, but you can’t just use the Bitcoin name.
Speaking about the various ‘soft forks,’ Wuckert explains that legacy Bitcoin nodes can’t validate almost any transactions that happen on them today.
“If Bitcoin isn’t a rules enforcement network, what is it?” he asks.
He says Litecoin is a true Bitcoin fork (note how it changed the name), and Bitcoin Cash is just a protocol scam. Drilling down on the difference between a protocol and an implementation, Wuckert gives the example of automobiles. The automobile is a protocol, whereas Ford and other brands are implementations.
These days, people want to define BTC as Bitcoin because it has the most hash power. Wuckert asks, “does nothing else matter?” For example, removing signatures literally breaks what Satoshi defined as a Bitcoin, yet people overlook that when dealing with BTC. If anyone brings this up, BTC advocates resort to tribalism and attacks. “They are afraid of people digging into the process,” Wuckert explains. By contrast, he is open and transparent because his ideas are thought out, and he doesn’t mind free discussion about them.
Why is BSV disliked so much?
Wuckert gives several reasons why BSV is delisted by most exchanges and hated by many industry influencers.
First, he notes that a lot of money is tied up in the idea that Bitcoin doesn’t scale. Billions of dollars have been invested in companies like Block, Lightning Labs, and similar firms. All of this is based on the idea that Bitcoin doesn’t scale and is a settlement technology. So, if Bitcoin can scale on-chain, there’s no reason for Blockstream or Lightning Labs to exist, and many people will lose money, he explains.
The second reason is BSVs association with Dr. Craig Wright. Wuckert says that if he’d been a small blocker, he’d be on the board at Blockstream and would be lauded. However, he’s a big blocker, and he says the small blockers like Adam Back are wrong, calling them out and refusing to comply with their wishes. Wuckert thinks he’s disliked because he doesn’t live up to their vision of what they imagined Satoshi to be. Rather than an altruistic anarchist, he’s a somewhat grumpy autistic Australian who is questioning what made many get rich for doing very little work.
Why don’t people believe Craig Wright is Satoshi?
Wuckert answers that most people are simply being told what to believe. On top of this, there are people like Arthur van Pelt who have written 100,000 words painting Dr. Wright as a scammer. Wuckert wonders who’s paying him since normal people don’t have the time to do this sort of thing.
Again, Wuckert emphasizes that people are defending their portfolios. Dr. Wright is like a snake in the garden; many people just want to get rid of him instinctually. However, Dr. Wright appears to love it and thrive on it. He doesn’t care for the opinions of his detractors and is independently wealthy. He’s a very long-term thinker and doesn’t care about the insignificant opinions of today.
What’s one piece of evidence to support Craig Wright’s claims?
According to Wuckert, the best evidence that Dr. Wright is Satoshi Nakamoto is that he hasn’t gone away. There’s so much money to be made by scamming in this industry, yet he has never raised funds, launched an ICO, or asked anyone for money. On the contrary, he tells people to cash out and stay away from speculating while working diligently in research and development. He stands on principles and doesn’t care about short-term profit.
Meanwhile, Michael Saylor from MicroStrategy (NASDAQ: MSTR), who lost $13 billion in the Dot Com crash, is encouraging people to mortgage their homes and buy BTC. In Wuckert’s mind, that’s what a scam looks like.
Digging deeper, Wuckert reflects that Bitcoin is an eccentric piece of technology. It involves economics, computer science, and several other disciplines. It just so happens that Dr. Wright is a polymath with high-level degrees in these areas.
Yet more evidence is how he explains features that BTC Core people shut off because they didn’t understand them. Dr. Wright explains in depth why they exist. Wuckert gives examples, citing how he described the reason for the double hash and that the Bitcoin script enabled smart contracts. He has been proven right about that when everyone else dismissed it.
IPv4/IPv6, micropayments, and IoT
Wuckert explains how Bitcoin and IPv6 can be integrated to create a new, truly peer-to-peer world. For those who don’t know, he explains that IPv4 was designed long ago and has run out of unique IP addresses. IPv6 is a solution because it allows exponentially more IP addresses to be created. IPv6 allows the transmission of peer-to-peer data rather than via servers as IPv4 necessitates. This will enable devices to send packets back and forth directly.
On BSV, direct peer-to-peer transactions are also possible. You then send it to the network to ensure it hasn’t been double spent. This way, IPv6 and Bitcoin can work together, allowing direct payments to be sent globally for the first time.
Watch: The BSV Global Blockchain Convention panel, The Future World with Blockchain
https://www.youtube.com/watch?v=v9hDGDoy1mM
Thanks CoinGeek’s Chief Bitcoin Historian Kurt Wuckert Jr. joined the No BS Crypto podcast and to Gavin Lucas. Source:
https://coingeek.com/kurt-wuckert-jr-talks-history-of-bitcoin-web3-and-bsv-on-no-bs-crypto-podcast/
Quote
PoW, PoS and the Howey test
A vast majority of crypto currencies (coins or tokens) are securities, and illegal ones at that, as they meet the Howey test and have not been issued/distributed in compliance with the securities law.
The only exception is one that satisfies both the following two conditions: (1) is based on genuine Proof-of-Work (PoW); and (2) has a locked base protocol according to the law.
The Howey Test
The present legal standard in the US for determining whether something is a security is summarized in the Howey Test. According to the Howey Test, if the thing meets all the following criteria, it is a security.
It is an investment of money
In a common enterprise
With an expectation of profits
Predominantly from the efforts of others
Most cryptos offered to the public meet all of them easily.
This is especially the case if the underlying blockchain uses Proof of Stake, or any other consensuses that use different names but are in essence still Proof of Stake.
Ripple, for example, argues that its XRP is a currency, and therefore isn’t a security. This argument is illogical. The Howey Test has nothing to do with whether it’s a currency or not. A currency is just a form of technology used for transmitting money (see Money & Currency). There are all kinds of possible currencies. The reason why a conventional fiat-based currency isn’t a security is not because it is a currency, but because it does not meet the Howey Test.
Specifically, (1) a conventional fiat-based currency is not issued by an enterprise, but by the government; and (2) obtaining a conventional fiat-based currency is not an investment, nor with an expectation of profits predominantly from the efforts of others, but rather a conversion of the fruits of one’s own labor into a convenient and reliable medium of value exchange.
Tokens like XRP meet the Howey Test. Arguing that XRP is not a security because it is a currency is to switch the subject matter.
The SEC has in the past indicated that it does not see Bitcoin and Ethereum as securities, as these assets have been sufficiently “decentralized.”
However, only the original Bitcoin (not BTC) meets the nonsecurity standard intended by the SEC. I would even argue that SEC has misapplied its standard due to its misunderstanding of BTC.
BTC, a severely distorted version of Bitcoin, does not meet the nonsecurity standard, because it does not have a locked base protocol and is centrally controlled by a small group of Core developers, who in turn are subject to the control or influence of certain interest groups hidden behind the scenes. See, Decentralization – a widely misunderstood concept.
Ethereum is in a similar condition. In addition, Ethereum is in a process of moving to Proof-of-Stake (PoS), which makes it a security immediately according to the Howey test, as argued below.
PoW, PoS, decentralization and the Howey test
In the article Decentralisation, Dr. Craig S. Wright makes arguments that PoS ensures the assets to be a security under the Howey test, while the true Bitcoin based on PoW and a protocol “set in stone” does not.
“..the hash puzzle solution in Bitcoin can be solved using a separate system that only sees the block header and never validates transactions. This innovation was a key part of the invention within Bitcoin and allowed the specialisation of services.”
Dr. Craig S. Wright, Decentralisation
The above statement clears up a big confusion over Proof-of-Work (PoW) and Proof-of-Stake (PoS) with respect to the question of securities law.
The genius of PoW is deeply and widely misunderstood. The PoW as originally designed by Satoshi maybe essentially described as follows:
“A competitive economic system that requires nodes to each perform and demonstrate a signal-work in order to prove both its honesty and ability to perform a utility-work.”
The bifurcation of work into two different kinds of work in PoW, namely a signal-work, and a utility-work, is critical not only to the overall design of Bitcoin as a scalable and secure system, but also to the question of Howey test. The bifurcation of work leads to specialization and labor division, which in turn, along with a locked base protocol, causes the nonexistence or disappearance of a common enterprise requisite according to the Howey test.
An asset based on PoS is a security under the Howey test because the stakers are analogous to shareholders of a company, and the stakers (shareholders) bought the tokens (1) as an investment of money (2) in a common enterprise (3) with an expectation of profits (4) predominantly from the efforts of others.
In contrast, the original Bitcoin that is based on PoW and a locked protocol is not a security, because there is no common enterprise for the buyers to invest in.
Nexus required in Howey test
Concerning the Howey test, a different argument can be made to further strengthening the arguments made in Dr. Craig S. Wright’s article Decentralisation. Certain points supporting this argument may have been made in that article already, but this article attempts to organize these points from a different viewpoint.
In the Howey test, there is an implicit nexus among the four elements required. The nexus is especially important between the first test element and the second one (“investment of money” and “in a common enterprise”), meaning that for the Howey test to be positive, investors must have invested the money into the common enterprise. If the investors have invested into something else but not the identified common enterprise, then the mere existence of both an investment and a common enterprise somewhere in the ecosystem does not qualify for the Howey test.
In other words, if the investors have invested money into something that’s different from the identified “common enterprise”, the Howey test would result in a negative. It would still be a negative case even if the investment target is somewhat related to the common enterprise.
It is the absence or existence of this nexus that is the most important difference between PoW and PoS.
PoW vs. PoS
It is clear that PoW, like PoS, also satisfies the first element of the Howey test (investment of money).
It is also arguable that even with PoW, like with PoS, the mining business as a whole constitutes a common enterprise in their effort of operating the blockchain according to the rules set by the issuer.
If the above two are established, it is also fairly easy to establish the other two elements of the Howey test as well: investors also have an expectation of profits predominantly from the efforts of others.
Therefore, it may appear that even Bitcoin with PoW meets the Howey test, is thus a security suspect.
One may argue on behalf of Bitcoin that the above second element is not met, because there really is no common enterprise in bitcoin mining, due to the clear competition among the miners. But this argument may not be the strongest for Bitcoin.
The requisite nexus exists in PoS
A PoS system has a more distinctive “common enterprise” than a PoW system does. However, a much greater difference is in the existence of the requisite nexus., not in the existence or lack thereof a common enterprise itself in the first place.
With PoS, once a common enterprise is found to exist (which usually does), the nexus is inherently there, and it is quite obvious. There is no separation, not even an essential and substantive distinction, between possessing coins and performing validation by the validators in PoS. The validators derive their acting power and benefit directly from the very fact that they hold “shares” of this common enterprise. The shares in essence are non-distinguishable among all shareholders, except for a nonessential difference in the manner in which they receive a ‘dividend’.
Whether they are staking to become a validator or not, they are all investing into this same enterprise (the common enterprise). This makes the PoS coin holders essentially the same as any shareholders who have shares of a conventional enterprise, and therefore are holders of a security.
In other words, with PoS, coin purchasers effectively buy shares of a common enterprise which runs the PoS-based blockchain creation and validation business. They are all shareholders of the common enterprise. When some shareholders happen to also stake for validation using the shares and thus receive an extra benefit, they are nonetheless still shareholders of the same common enterprise and do not change the non-staking coin purchasers’ role as shareholders either. This is akin to a company’s equity shareholders who are also workers or employees of the company receiving an extra benefit in wage compensation, except that PoS ties the stakes even more directly with the compensation by not even requiring the “shareholder employees” to perform real work other than exercising voting rights proportional to each one’s shares.
No requisite nexus in genuine PoW
In contrast, with PoW, mining nodes derive their benefit by performing real work. The fact that a mining node may also own some coins (bitcoin for example) is merely incidental. The ownership of the coins does not constitute the business of mining. Performing the mining work does. There is a fundamental separation between possessing coins and performing mining work by the PoW miners.
In other words, even if one could characterize holders of bitcoin as some kind of investors who have invested in something, that ‘something’ is not an identifiable “common enterprise” in active operation. Rather, they just purchased a thing (a commodity), not the share of a common enterprise.
First, they did not invest in an issuer to create more coins. The issuer of bitcoin, namely Satoshi, issued all the coins all at once in the beginning without having any coin purchasers’ participation. The bitcoin issuer isn’t a continuing enterprise that needs investment. In the case of bitcoin, the truth is that Satoshi the issuer would have received no money either directly or indirectly from the investments by others had he not himself mined coins as a miner on the exactly the same terms as the other miners. And the fact that the issuer did also do mining is coincidental and has no inherent relationship with the issuer identity.
Second, the coin purchasers did not invest in the mining business. It is the shareholders of the mining companies who have invested into the mining business, and these shareholders are a different category than the coin holders.
Third, the coin purchasers did not invest in a common infrastructure development business. Shareholders of the blockchain infrastructure development companies have invested into the development business, but again they are a different category than the coin holders.
The spirit of the law
Lastly, looking beyond the letters of the law, it is relevant to consider the spirit of the law as well. The spirit of the securities law including the Howey test is to protect investors from issuers/sellers of certain things that have a strong speculative nature. There is a twofold reason why “securities” as a category are particularly risky: first, those behind securities are strongly motivated to get investors’ money; and second, the investors on the other hand are strongly drawn to a prospect of receiving a return without actually participating in the enterprise that is supposed to create the underlying return. When a common enterprise exists as a center of gravity to pull many investors in, you want some protection for the public.
The securities law does not make fundraising illegal per se. It just subjects fundraising process to certain regulatory requirements.
However, almost none of the existing crypto coins and tokens was issued and exchanged in a manner that satisfies such regulatory requirements. Therefore, to be legal, a crypto must pass a negative Howey test and is thus considered not to be a security.
For this purpose, a digital asset that runs on a genuine decentralized PoW consensus with a base protocol locked according to the law passes a negative Howey test and may not be a security, because such an asset has not a common enterprise that exists as the center of gravity.
Especially, if the digital asset is further designed to primarily serve as a nontrading utility, empirically there tends to be even less likely to form a center of gravity that is in itself speculative and also attracts speculating investors.
An example of a nonsecurity digital asset
One distinct example is Bitcoin Satoshi Vision (BSV).
BSV is the original Bitcoin according to the whitepaper “A Peer-to-Peer electronic cash system“. It is based on genuine Proof-of-Work (POW); and has a locked base protocol according to the law.
Not only the legal theory, but also the actual evidence supports the lack of a gravity center acting as a force to attract speculative investors.
Due to is designed emphasis of Peer-to-Peer (P2P) cash payment utility (versus “digital gold” and “store of value” narratives), BSV clearly has far less attraction to pure speculative investors. The way the market has treated BSV is in fact a harsh and bitter showing that BSV can only succeed on its having developed real utility, and not by merely selling a narrative. (But is it not would it should be like in a real world of business?)
But at the same time, this rather peculiar phenomenon is also circumstantial evidence that BSV is not a security but a commodity which lives or dies based on its utility.
As the BSV’s ecosystem further develops, coin purchasers are more and more purchasing the satoshi tokens for the utility (to actually use them) rather than with a mere expectation of profit.
In the case of BSV, the empirical behavior and the legal theory are in harmony. Both the lack of an investable common enterprise and the lack of nexus in an actually invested common enterprise, along with the asset’s being centered around utility, clearly demonstrated a nonsecurity asset.
Conclusion
A requisite “nexus” is found in PoS or even PoW that does not have a base protocol locked according to the law, but not in genuine PoW with a base protocol locked according to the law. The only digital asset that is not a security is one that satisfies both the following two conditions: (1) is based on genuine Proof-of-Work (POW); and (2) has a locked base protocol according to the law. Empirically, the asset should be essentially a utility asset rather than a speculative one.
Thank you to Mr.GAO source: https://www.linkedin.com/pulse/pow-pos-howey-test-zeming-m-gao/
A vast majority of crypto currencies (coins or tokens) are securities, and illegal ones at that, as they meet the Howey test and have not been issued/distributed in compliance with the securities law.
The only exception is one that satisfies both the following two conditions: (1) is based on genuine Proof-of-Work (PoW); and (2) has a locked base protocol according to the law.
The Howey Test
The present legal standard in the US for determining whether something is a security is summarized in the Howey Test. According to the Howey Test, if the thing meets all the following criteria, it is a security.
It is an investment of money
In a common enterprise
With an expectation of profits
Predominantly from the efforts of others
Most cryptos offered to the public meet all of them easily.
This is especially the case if the underlying blockchain uses Proof of Stake, or any other consensuses that use different names but are in essence still Proof of Stake.
Ripple, for example, argues that its XRP is a currency, and therefore isn’t a security. This argument is illogical. The Howey Test has nothing to do with whether it’s a currency or not. A currency is just a form of technology used for transmitting money (see Money & Currency). There are all kinds of possible currencies. The reason why a conventional fiat-based currency isn’t a security is not because it is a currency, but because it does not meet the Howey Test.
Specifically, (1) a conventional fiat-based currency is not issued by an enterprise, but by the government; and (2) obtaining a conventional fiat-based currency is not an investment, nor with an expectation of profits predominantly from the efforts of others, but rather a conversion of the fruits of one’s own labor into a convenient and reliable medium of value exchange.
Tokens like XRP meet the Howey Test. Arguing that XRP is not a security because it is a currency is to switch the subject matter.
The SEC has in the past indicated that it does not see Bitcoin and Ethereum as securities, as these assets have been sufficiently “decentralized.”
However, only the original Bitcoin (not BTC) meets the nonsecurity standard intended by the SEC. I would even argue that SEC has misapplied its standard due to its misunderstanding of BTC.
BTC, a severely distorted version of Bitcoin, does not meet the nonsecurity standard, because it does not have a locked base protocol and is centrally controlled by a small group of Core developers, who in turn are subject to the control or influence of certain interest groups hidden behind the scenes. See, Decentralization – a widely misunderstood concept.
Ethereum is in a similar condition. In addition, Ethereum is in a process of moving to Proof-of-Stake (PoS), which makes it a security immediately according to the Howey test, as argued below.
PoW, PoS, decentralization and the Howey test
In the article Decentralisation, Dr. Craig S. Wright makes arguments that PoS ensures the assets to be a security under the Howey test, while the true Bitcoin based on PoW and a protocol “set in stone” does not.
“..the hash puzzle solution in Bitcoin can be solved using a separate system that only sees the block header and never validates transactions. This innovation was a key part of the invention within Bitcoin and allowed the specialisation of services.”
Dr. Craig S. Wright, Decentralisation
The above statement clears up a big confusion over Proof-of-Work (PoW) and Proof-of-Stake (PoS) with respect to the question of securities law.
The genius of PoW is deeply and widely misunderstood. The PoW as originally designed by Satoshi maybe essentially described as follows:
“A competitive economic system that requires nodes to each perform and demonstrate a signal-work in order to prove both its honesty and ability to perform a utility-work.”
The bifurcation of work into two different kinds of work in PoW, namely a signal-work, and a utility-work, is critical not only to the overall design of Bitcoin as a scalable and secure system, but also to the question of Howey test. The bifurcation of work leads to specialization and labor division, which in turn, along with a locked base protocol, causes the nonexistence or disappearance of a common enterprise requisite according to the Howey test.
An asset based on PoS is a security under the Howey test because the stakers are analogous to shareholders of a company, and the stakers (shareholders) bought the tokens (1) as an investment of money (2) in a common enterprise (3) with an expectation of profits (4) predominantly from the efforts of others.
In contrast, the original Bitcoin that is based on PoW and a locked protocol is not a security, because there is no common enterprise for the buyers to invest in.
Nexus required in Howey test
Concerning the Howey test, a different argument can be made to further strengthening the arguments made in Dr. Craig S. Wright’s article Decentralisation. Certain points supporting this argument may have been made in that article already, but this article attempts to organize these points from a different viewpoint.
In the Howey test, there is an implicit nexus among the four elements required. The nexus is especially important between the first test element and the second one (“investment of money” and “in a common enterprise”), meaning that for the Howey test to be positive, investors must have invested the money into the common enterprise. If the investors have invested into something else but not the identified common enterprise, then the mere existence of both an investment and a common enterprise somewhere in the ecosystem does not qualify for the Howey test.
In other words, if the investors have invested money into something that’s different from the identified “common enterprise”, the Howey test would result in a negative. It would still be a negative case even if the investment target is somewhat related to the common enterprise.
It is the absence or existence of this nexus that is the most important difference between PoW and PoS.
PoW vs. PoS
It is clear that PoW, like PoS, also satisfies the first element of the Howey test (investment of money).
It is also arguable that even with PoW, like with PoS, the mining business as a whole constitutes a common enterprise in their effort of operating the blockchain according to the rules set by the issuer.
If the above two are established, it is also fairly easy to establish the other two elements of the Howey test as well: investors also have an expectation of profits predominantly from the efforts of others.
Therefore, it may appear that even Bitcoin with PoW meets the Howey test, is thus a security suspect.
One may argue on behalf of Bitcoin that the above second element is not met, because there really is no common enterprise in bitcoin mining, due to the clear competition among the miners. But this argument may not be the strongest for Bitcoin.
The requisite nexus exists in PoS
A PoS system has a more distinctive “common enterprise” than a PoW system does. However, a much greater difference is in the existence of the requisite nexus., not in the existence or lack thereof a common enterprise itself in the first place.
With PoS, once a common enterprise is found to exist (which usually does), the nexus is inherently there, and it is quite obvious. There is no separation, not even an essential and substantive distinction, between possessing coins and performing validation by the validators in PoS. The validators derive their acting power and benefit directly from the very fact that they hold “shares” of this common enterprise. The shares in essence are non-distinguishable among all shareholders, except for a nonessential difference in the manner in which they receive a ‘dividend’.
Whether they are staking to become a validator or not, they are all investing into this same enterprise (the common enterprise). This makes the PoS coin holders essentially the same as any shareholders who have shares of a conventional enterprise, and therefore are holders of a security.
In other words, with PoS, coin purchasers effectively buy shares of a common enterprise which runs the PoS-based blockchain creation and validation business. They are all shareholders of the common enterprise. When some shareholders happen to also stake for validation using the shares and thus receive an extra benefit, they are nonetheless still shareholders of the same common enterprise and do not change the non-staking coin purchasers’ role as shareholders either. This is akin to a company’s equity shareholders who are also workers or employees of the company receiving an extra benefit in wage compensation, except that PoS ties the stakes even more directly with the compensation by not even requiring the “shareholder employees” to perform real work other than exercising voting rights proportional to each one’s shares.
No requisite nexus in genuine PoW
In contrast, with PoW, mining nodes derive their benefit by performing real work. The fact that a mining node may also own some coins (bitcoin for example) is merely incidental. The ownership of the coins does not constitute the business of mining. Performing the mining work does. There is a fundamental separation between possessing coins and performing mining work by the PoW miners.
In other words, even if one could characterize holders of bitcoin as some kind of investors who have invested in something, that ‘something’ is not an identifiable “common enterprise” in active operation. Rather, they just purchased a thing (a commodity), not the share of a common enterprise.
First, they did not invest in an issuer to create more coins. The issuer of bitcoin, namely Satoshi, issued all the coins all at once in the beginning without having any coin purchasers’ participation. The bitcoin issuer isn’t a continuing enterprise that needs investment. In the case of bitcoin, the truth is that Satoshi the issuer would have received no money either directly or indirectly from the investments by others had he not himself mined coins as a miner on the exactly the same terms as the other miners. And the fact that the issuer did also do mining is coincidental and has no inherent relationship with the issuer identity.
Second, the coin purchasers did not invest in the mining business. It is the shareholders of the mining companies who have invested into the mining business, and these shareholders are a different category than the coin holders.
Third, the coin purchasers did not invest in a common infrastructure development business. Shareholders of the blockchain infrastructure development companies have invested into the development business, but again they are a different category than the coin holders.
The spirit of the law
Lastly, looking beyond the letters of the law, it is relevant to consider the spirit of the law as well. The spirit of the securities law including the Howey test is to protect investors from issuers/sellers of certain things that have a strong speculative nature. There is a twofold reason why “securities” as a category are particularly risky: first, those behind securities are strongly motivated to get investors’ money; and second, the investors on the other hand are strongly drawn to a prospect of receiving a return without actually participating in the enterprise that is supposed to create the underlying return. When a common enterprise exists as a center of gravity to pull many investors in, you want some protection for the public.
The securities law does not make fundraising illegal per se. It just subjects fundraising process to certain regulatory requirements.
However, almost none of the existing crypto coins and tokens was issued and exchanged in a manner that satisfies such regulatory requirements. Therefore, to be legal, a crypto must pass a negative Howey test and is thus considered not to be a security.
For this purpose, a digital asset that runs on a genuine decentralized PoW consensus with a base protocol locked according to the law passes a negative Howey test and may not be a security, because such an asset has not a common enterprise that exists as the center of gravity.
Especially, if the digital asset is further designed to primarily serve as a nontrading utility, empirically there tends to be even less likely to form a center of gravity that is in itself speculative and also attracts speculating investors.
An example of a nonsecurity digital asset
One distinct example is Bitcoin Satoshi Vision (BSV).
BSV is the original Bitcoin according to the whitepaper “A Peer-to-Peer electronic cash system“. It is based on genuine Proof-of-Work (POW); and has a locked base protocol according to the law.
Not only the legal theory, but also the actual evidence supports the lack of a gravity center acting as a force to attract speculative investors.
Due to is designed emphasis of Peer-to-Peer (P2P) cash payment utility (versus “digital gold” and “store of value” narratives), BSV clearly has far less attraction to pure speculative investors. The way the market has treated BSV is in fact a harsh and bitter showing that BSV can only succeed on its having developed real utility, and not by merely selling a narrative. (But is it not would it should be like in a real world of business?)
But at the same time, this rather peculiar phenomenon is also circumstantial evidence that BSV is not a security but a commodity which lives or dies based on its utility.
As the BSV’s ecosystem further develops, coin purchasers are more and more purchasing the satoshi tokens for the utility (to actually use them) rather than with a mere expectation of profit.
In the case of BSV, the empirical behavior and the legal theory are in harmony. Both the lack of an investable common enterprise and the lack of nexus in an actually invested common enterprise, along with the asset’s being centered around utility, clearly demonstrated a nonsecurity asset.
Conclusion
A requisite “nexus” is found in PoS or even PoW that does not have a base protocol locked according to the law, but not in genuine PoW with a base protocol locked according to the law. The only digital asset that is not a security is one that satisfies both the following two conditions: (1) is based on genuine Proof-of-Work (POW); and (2) has a locked base protocol according to the law. Empirically, the asset should be essentially a utility asset rather than a speculative one.
Thank you to Mr.GAO source: https://www.linkedin.com/pulse/pow-pos-howey-test-zeming-m-gao/
https://bitcointalk.org/index.php?topic=4985868.msg60370680#msg60370680Quote
If your cryptoShitcoins are locked in Celsius Network. This may help you.
https://twitter.com/jbrowder1/status/1536907143592300545?s=20&t=BH3AR-Bt2uQs42CAyBkzZw
Other solution, why don't you do like Craig Wright and ask for a court seizure of your stolen coins, so the miners can transfer your coins to you in the name of their legal responsibilities to maintain the BTC, BCH, DOGE .... networks ?
Quote
If your cryptoShitcoins are locked in Celsius Network. This may help you.
https://twitter.com/jbrowder1/status/1536907143592300545?s=20&t=BH3AR-Bt2uQs42CAyBkzZw
Other solution, why don't you do like Craig Wright and ask for a court seizure of your stolen coins, so the miners can transfer your coins to you in the name of their legal responsibilities to maintain the BTC network ?
Thanks so lot Jimmy 🙏 Good luck for the next episodes of your career !
Quote
Bitcoin as a base layer, as explained by Bitcoin inventor Craig Wright at BSV Global Blockchain Convention
In his keynote speech at the recently held BSV Global Blockchain Convention, Dr. Craig Wright introduced the idea of Bitcoin as a base layer for other blockchains. While his speech was a bit heated and slightly antagonizing in the same vein as Russel Crowe’s Maximus Decimus Meridius throwing down the gauntlet of challenge in the Roman colosseum, it did introduce a very interesting concept: that if a blockchain is scalable enough to process more transactions than another blockchain, then could it just run the second blockchain internally, so that the users of the second blockchain could enjoy the low cost and high transaction scalability of Bitcoin while still operating their apps in a context that is specific and familiar to them in their native second blockchain?
Put another way, can a bigger, more scalable blockchain simply subsume a smaller, slower blockchain?
If so, then this model of growth expansion seems to be the best path of adoption for BSV, considering some other blockchains like ETH already have large developed communities and tools created that support their ecosystem. If there was a migration path that meant that users of ETH apps could simply choose between running their programs on ETH or ETH over BSV (EoBSV) then we could build and run some EoBSV nodes and let simple economics do all the selling. Presumably, people will decide to use the network which can support what they want to do with the least amount of transaction fees or gas fees.
Dr. Craig Wright introduced the idea of Bitcoin
How will people’s existing balances and smart contracts work?
At this point, this is just my personal theory, but one way is to build a mirror ETH network, with everyone and every contract balances in ETH being represented. The EoBSV network will be run by a network of bridge nodes that operate a stock Ethereum EVM that listens to and validates ETH transactions. Instead of building blocks on ETH, it will just wrap ETH blocks into Bitcoin transactions and write them into BSV blocks. In this way, this node is acting as a standard ETH node. Except that when it needs to get sync’d with the network on the latest state of anything, it can use the BSV blockchain to retrieve the latest state as of the last ETH block. Because the state of ETH is stored in Bitcoin UTXOs, it does not have the scaling problem, as Bitcoin can prune off old unneeded versions of the ETH state graph snapshots. The UTXO model only keeps the latest version of the state for any contract or address.
Okay, so EoBSV is just a hybrid node, comprised of one part EVM node and one part BSV app service, which writes the state of all ETH blocks into BSV.
What good does this do over a stock ETH node?
It costs cheaper to write transactions to, given to the fact that gas on BSV is effectively free.
It doesn’t have scaling issues in the form of having to store an ever-increasing state graph.
It keeps up to sync with the existing ETH network for applications that are still using ETH nodes as their primary ledger of truth.
It uses its BSV UXTO store version of the ETH state for applications that have moved over to EoBSV and create transactions for them that do not communicate back to the legacy ETH network.
Dr. Craig Wright introduced the idea of Bitcoin
As an application looking to migrate, I would imagine this is a one-way process.
Also, once a smart contract or a transaction committed on EoBSV has been made, then other users who are not using EoBSV aware wallets (and only ETH aware wallets) won’t see the updated state, which exists only on the EoBSV side. This will make application migrations a bit tricky and require coordination. However, once a user base has been moved over, if anyone who has yet to migrate complains about not seeing the up-to-date status of a contract or an account balance, the simple way to fix this is to have them update their wallet to an EoBSV aware one.
In this fashion, this is similar to how tokens work over BSV. When a user using a token-aware wallet sends tokens to someone who doesn’t have a token-aware wallet, they do not see the balance. Even if they cannot see it or spend it, it doesn’t mean that the tokens are ‘broken’ or lost. It just means that the recipient needs to update their app or wallet to one that can recognize the token format, and they will be instantly able to see and transact in the token.
Similarly, if, for instance, CryptoKitties3 were to port1 their service to send their transactions to EoBSV instead of ETH due to the lower fees, then they would start to send their ETH transactions with a corresponding BSV transaction (to pay the BSV miners), perhaps atomically swapped from their ETH balance. Because this fee is much too low to be processed on the ETH network, it likely gets rejected. But the EoBSV node picks it up and records it on the BSV blockchain instead. Henceforth if the users of CryptoKitties3 want to see their updates, they will have to update their wallet to a version that connects to an EoBSV node, which is the only place where they will have the correct balances and state.
In my opinion, what Dr. Wright is suggesting is not that ETH and BSV can be effectively run together as a bridged network, or ‘cross-chains’ as the popular term is these days, but BSV can be used as the scalable backend to run any other blockchain on top, such that migration to the “onBSV” version is a possible scaling strategy for applications and developers on ETH who have spent countless millions of dollars and man-hours developing a platform and business idea on a platform that they later on realized could not scale to meet the demand of their business model, due to the fact of their blockchain being ‘too crowded’ or ‘over used’ by other users and apps.
Dr. Craig Wright on GBC22
In the end, it is always possible to build a Proof of Stake system on top of a Proof of Work one, but not the other way around.
It is possible to build a private system on top of a public one2, but not the other way around.
It is possible to build an encrypted system on top of an unencrypted one3, but not the other way around.
It is possible to build an insecure system on top of a secure one, but not the other way around.
It is possible to build a non-scalable system on a scalable one, but not the other way around.
BSV is Proof of Work, public, unencrypted, secure, and scalable. It can act as the base layer for all other blockchain applications.
I think this was the gist of Dr. Wright’s challenge to Ethereum.
Game on.
/Jerry Chan
***
NOTES:
[1] Recall that EoBSV nodes have up to date ETH balances for ALL ETH users and smart contracts by the fact that it listens to and keeps in sync with the ETH blockchain
[2] VPNs are private networks on top of a public internet, for instance.
[3] Just try building a non-encrypted system in one that is encrypted by default. While you are at it, try touching your forehead with your tongue.
Watch the BSV Global Blockchain Convention Dubai 2022 Day 1 here:
https://www.youtube.com/watch?v=ggbZ8YedpBE
Watch the BSV Global Blockchain Convention Dubai 2022 Day 2 here:
https://www.youtube.com/watch?v=RzJsCRb6zt8
Watch the BSV Global Blockchain Convention Dubai 2022 Day 3 here:
https://www.youtube.com/watch?v=RzSCrXf1Ywc
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.
Source thanks to Jerry Chan https://coingeek.com/bitcoin-as-a-base-layer-as-explained-by-bitcoin-inventor-craig-wright-at-bsv-global-blockchain-convention/
In his keynote speech at the recently held BSV Global Blockchain Convention, Dr. Craig Wright introduced the idea of Bitcoin as a base layer for other blockchains. While his speech was a bit heated and slightly antagonizing in the same vein as Russel Crowe’s Maximus Decimus Meridius throwing down the gauntlet of challenge in the Roman colosseum, it did introduce a very interesting concept: that if a blockchain is scalable enough to process more transactions than another blockchain, then could it just run the second blockchain internally, so that the users of the second blockchain could enjoy the low cost and high transaction scalability of Bitcoin while still operating their apps in a context that is specific and familiar to them in their native second blockchain?
Put another way, can a bigger, more scalable blockchain simply subsume a smaller, slower blockchain?
If so, then this model of growth expansion seems to be the best path of adoption for BSV, considering some other blockchains like ETH already have large developed communities and tools created that support their ecosystem. If there was a migration path that meant that users of ETH apps could simply choose between running their programs on ETH or ETH over BSV (EoBSV) then we could build and run some EoBSV nodes and let simple economics do all the selling. Presumably, people will decide to use the network which can support what they want to do with the least amount of transaction fees or gas fees.
Dr. Craig Wright introduced the idea of Bitcoin
How will people’s existing balances and smart contracts work?
At this point, this is just my personal theory, but one way is to build a mirror ETH network, with everyone and every contract balances in ETH being represented. The EoBSV network will be run by a network of bridge nodes that operate a stock Ethereum EVM that listens to and validates ETH transactions. Instead of building blocks on ETH, it will just wrap ETH blocks into Bitcoin transactions and write them into BSV blocks. In this way, this node is acting as a standard ETH node. Except that when it needs to get sync’d with the network on the latest state of anything, it can use the BSV blockchain to retrieve the latest state as of the last ETH block. Because the state of ETH is stored in Bitcoin UTXOs, it does not have the scaling problem, as Bitcoin can prune off old unneeded versions of the ETH state graph snapshots. The UTXO model only keeps the latest version of the state for any contract or address.
Okay, so EoBSV is just a hybrid node, comprised of one part EVM node and one part BSV app service, which writes the state of all ETH blocks into BSV.
What good does this do over a stock ETH node?
It costs cheaper to write transactions to, given to the fact that gas on BSV is effectively free.
It doesn’t have scaling issues in the form of having to store an ever-increasing state graph.
It keeps up to sync with the existing ETH network for applications that are still using ETH nodes as their primary ledger of truth.
It uses its BSV UXTO store version of the ETH state for applications that have moved over to EoBSV and create transactions for them that do not communicate back to the legacy ETH network.
Dr. Craig Wright introduced the idea of Bitcoin
As an application looking to migrate, I would imagine this is a one-way process.
Also, once a smart contract or a transaction committed on EoBSV has been made, then other users who are not using EoBSV aware wallets (and only ETH aware wallets) won’t see the updated state, which exists only on the EoBSV side. This will make application migrations a bit tricky and require coordination. However, once a user base has been moved over, if anyone who has yet to migrate complains about not seeing the up-to-date status of a contract or an account balance, the simple way to fix this is to have them update their wallet to an EoBSV aware one.
In this fashion, this is similar to how tokens work over BSV. When a user using a token-aware wallet sends tokens to someone who doesn’t have a token-aware wallet, they do not see the balance. Even if they cannot see it or spend it, it doesn’t mean that the tokens are ‘broken’ or lost. It just means that the recipient needs to update their app or wallet to one that can recognize the token format, and they will be instantly able to see and transact in the token.
Similarly, if, for instance, CryptoKitties3 were to port1 their service to send their transactions to EoBSV instead of ETH due to the lower fees, then they would start to send their ETH transactions with a corresponding BSV transaction (to pay the BSV miners), perhaps atomically swapped from their ETH balance. Because this fee is much too low to be processed on the ETH network, it likely gets rejected. But the EoBSV node picks it up and records it on the BSV blockchain instead. Henceforth if the users of CryptoKitties3 want to see their updates, they will have to update their wallet to a version that connects to an EoBSV node, which is the only place where they will have the correct balances and state.
In my opinion, what Dr. Wright is suggesting is not that ETH and BSV can be effectively run together as a bridged network, or ‘cross-chains’ as the popular term is these days, but BSV can be used as the scalable backend to run any other blockchain on top, such that migration to the “onBSV” version is a possible scaling strategy for applications and developers on ETH who have spent countless millions of dollars and man-hours developing a platform and business idea on a platform that they later on realized could not scale to meet the demand of their business model, due to the fact of their blockchain being ‘too crowded’ or ‘over used’ by other users and apps.
Dr. Craig Wright on GBC22
In the end, it is always possible to build a Proof of Stake system on top of a Proof of Work one, but not the other way around.
It is possible to build a private system on top of a public one2, but not the other way around.
It is possible to build an encrypted system on top of an unencrypted one3, but not the other way around.
It is possible to build an insecure system on top of a secure one, but not the other way around.
It is possible to build a non-scalable system on a scalable one, but not the other way around.
BSV is Proof of Work, public, unencrypted, secure, and scalable. It can act as the base layer for all other blockchain applications.
I think this was the gist of Dr. Wright’s challenge to Ethereum.
Game on.
/Jerry Chan
***
NOTES:
[1] Recall that EoBSV nodes have up to date ETH balances for ALL ETH users and smart contracts by the fact that it listens to and keeps in sync with the ETH blockchain
[2] VPNs are private networks on top of a public internet, for instance.
[3] Just try building a non-encrypted system in one that is encrypted by default. While you are at it, try touching your forehead with your tongue.
Watch the BSV Global Blockchain Convention Dubai 2022 Day 1 here:
https://www.youtube.com/watch?v=ggbZ8YedpBE
Watch the BSV Global Blockchain Convention Dubai 2022 Day 2 here:
https://www.youtube.com/watch?v=RzJsCRb6zt8
Watch the BSV Global Blockchain Convention Dubai 2022 Day 3 here:
https://www.youtube.com/watch?v=RzSCrXf1Ywc
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.
Source thanks to Jerry Chan https://coingeek.com/bitcoin-as-a-base-layer-as-explained-by-bitcoin-inventor-craig-wright-at-bsv-global-blockchain-convention/
Seems legitimate, doesn't it?
⭐ Merited by hv_ (4)
Quote
Bitcoin as a base layer, as explained by Bitcoin inventor Craig Wright at BSV Global Blockchain Convention
In his keynote speech at the recently held BSV Global Blockchain Convention, Dr. Craig Wright introduced the idea of Bitcoin as a base layer for other blockchains. While his speech was a bit heated and slightly antagonizing in the same vein as Russel Crowe’s Maximus Decimus Meridius throwing down the gauntlet of challenge in the Roman colosseum, it did introduce a very interesting concept: that if a blockchain is scalable enough to process more transactions than another blockchain, then could it just run the second blockchain internally, so that the users of the second blockchain could enjoy the low cost and high transaction scalability of Bitcoin while still operating their apps in a context that is specific and familiar to them in their native second blockchain?
Put another way, can a bigger, more scalable blockchain simply subsume a smaller, slower blockchain?
If so, then this model of growth expansion seems to be the best path of adoption for BSV, considering some other blockchains like ETH already have large developed communities and tools created that support their ecosystem. If there was a migration path that meant that users of ETH apps could simply choose between running their programs on ETH or ETH over BSV (EoBSV) then we could build and run some EoBSV nodes and let simple economics do all the selling. Presumably, people will decide to use the network which can support what they want to do with the least amount of transaction fees or gas fees.
Dr. Craig Wright introduced the idea of Bitcoin
How will people’s existing balances and smart contracts work?
At this point, this is just my personal theory, but one way is to build a mirror ETH network, with everyone and every contract balances in ETH being represented. The EoBSV network will be run by a network of bridge nodes that operate a stock Ethereum EVM that listens to and validates ETH transactions. Instead of building blocks on ETH, it will just wrap ETH blocks into Bitcoin transactions and write them into BSV blocks. In this way, this node is acting as a standard ETH node. Except that when it needs to get sync’d with the network on the latest state of anything, it can use the BSV blockchain to retrieve the latest state as of the last ETH block. Because the state of ETH is stored in Bitcoin UTXOs, it does not have the scaling problem, as Bitcoin can prune off old unneeded versions of the ETH state graph snapshots. The UTXO model only keeps the latest version of the state for any contract or address.
Okay, so EoBSV is just a hybrid node, comprised of one part EVM node and one part BSV app service, which writes the state of all ETH blocks into BSV.
What good does this do over a stock ETH node?
It costs cheaper to write transactions to, given to the fact that gas on BSV is effectively free.
It doesn’t have scaling issues in the form of having to store an ever-increasing state graph.
It keeps up to sync with the existing ETH network for applications that are still using ETH nodes as their primary ledger of truth.
It uses its BSV UXTO store version of the ETH state for applications that have moved over to EoBSV and create transactions for them that do not communicate back to the legacy ETH network.
Dr. Craig Wright introduced the idea of Bitcoin
As an application looking to migrate, I would imagine this is a one-way process.
Also, once a smart contract or a transaction committed on EoBSV has been made, then other users who are not using EoBSV aware wallets (and only ETH aware wallets) won’t see the updated state, which exists only on the EoBSV side. This will make application migrations a bit tricky and require coordination. However, once a user base has been moved over, if anyone who has yet to migrate complains about not seeing the up-to-date status of a contract or an account balance, the simple way to fix this is to have them update their wallet to an EoBSV aware one.
In this fashion, this is similar to how tokens work over BSV. When a user using a token-aware wallet sends tokens to someone who doesn’t have a token-aware wallet, they do not see the balance. Even if they cannot see it or spend it, it doesn’t mean that the tokens are ‘broken’ or lost. It just means that the recipient needs to update their app or wallet to one that can recognize the token format, and they will be instantly able to see and transact in the token.
Similarly, if, for instance, CryptoKitties3 were to port1 their service to send their transactions to EoBSV instead of ETH due to the lower fees, then they would start to send their ETH transactions with a corresponding BSV transaction (to pay the BSV miners), perhaps atomically swapped from their ETH balance. Because this fee is much too low to be processed on the ETH network, it likely gets rejected. But the EoBSV node picks it up and records it on the BSV blockchain instead. Henceforth if the users of CryptoKitties3 want to see their updates, they will have to update their wallet to a version that connects to an EoBSV node, which is the only place where they will have the correct balances and state.
In my opinion, what Dr. Wright is suggesting is not that ETH and BSV can be effectively run together as a bridged network, or ‘cross-chains’ as the popular term is these days, but BSV can be used as the scalable backend to run any other blockchain on top, such that migration to the “onBSV” version is a possible scaling strategy for applications and developers on ETH who have spent countless millions of dollars and man-hours developing a platform and business idea on a platform that they later on realized could not scale to meet the demand of their business model, due to the fact of their blockchain being ‘too crowded’ or ‘over used’ by other users and apps.
Dr. Craig Wright on GBC22
In the end, it is always possible to build a Proof of Stake system on top of a Proof of Work one, but not the other way around.
It is possible to build a private system on top of a public one2, but not the other way around.
It is possible to build an encrypted system on top of an unencrypted one3, but not the other way around.
It is possible to build an insecure system on top of a secure one, but not the other way around.
It is possible to build a non-scalable system on a scalable one, but not the other way around.
BSV is Proof of Work, public, unencrypted, secure, and scalable. It can act as the base layer for all other blockchain applications.
I think this was the gist of Dr. Wright’s challenge to Ethereum.
Game on.
/Jerry Chan
***
NOTES:
[1] Recall that EoBSV nodes have up to date ETH balances for ALL ETH users and smart contracts by the fact that it listens to and keeps in sync with the ETH blockchain
[2] VPNs are private networks on top of a public internet, for instance.
[3] Just try building a non-encrypted system in one that is encrypted by default. While you are at it, try touching your forehead with your tongue.
Watch the BSV Global Blockchain Convention Dubai 2022 Day 1 here:
https://www.youtube.com/watch?v=ggbZ8YedpBE
Watch the BSV Global Blockchain Convention Dubai 2022 Day 2 here:
https://www.youtube.com/watch?v=RzJsCRb6zt8
Watch the BSV Global Blockchain Convention Dubai 2022 Day 3 here:
https://www.youtube.com/watch?v=RzSCrXf1Ywc
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.
Source thanks to Jerry Chan https://coingeek.com/bitcoin-as-a-base-layer-as-explained-by-bitcoin-inventor-craig-wright-at-bsv-global-blockchain-convention/
In his keynote speech at the recently held BSV Global Blockchain Convention, Dr. Craig Wright introduced the idea of Bitcoin as a base layer for other blockchains. While his speech was a bit heated and slightly antagonizing in the same vein as Russel Crowe’s Maximus Decimus Meridius throwing down the gauntlet of challenge in the Roman colosseum, it did introduce a very interesting concept: that if a blockchain is scalable enough to process more transactions than another blockchain, then could it just run the second blockchain internally, so that the users of the second blockchain could enjoy the low cost and high transaction scalability of Bitcoin while still operating their apps in a context that is specific and familiar to them in their native second blockchain?
Put another way, can a bigger, more scalable blockchain simply subsume a smaller, slower blockchain?
If so, then this model of growth expansion seems to be the best path of adoption for BSV, considering some other blockchains like ETH already have large developed communities and tools created that support their ecosystem. If there was a migration path that meant that users of ETH apps could simply choose between running their programs on ETH or ETH over BSV (EoBSV) then we could build and run some EoBSV nodes and let simple economics do all the selling. Presumably, people will decide to use the network which can support what they want to do with the least amount of transaction fees or gas fees.
Dr. Craig Wright introduced the idea of Bitcoin
How will people’s existing balances and smart contracts work?
At this point, this is just my personal theory, but one way is to build a mirror ETH network, with everyone and every contract balances in ETH being represented. The EoBSV network will be run by a network of bridge nodes that operate a stock Ethereum EVM that listens to and validates ETH transactions. Instead of building blocks on ETH, it will just wrap ETH blocks into Bitcoin transactions and write them into BSV blocks. In this way, this node is acting as a standard ETH node. Except that when it needs to get sync’d with the network on the latest state of anything, it can use the BSV blockchain to retrieve the latest state as of the last ETH block. Because the state of ETH is stored in Bitcoin UTXOs, it does not have the scaling problem, as Bitcoin can prune off old unneeded versions of the ETH state graph snapshots. The UTXO model only keeps the latest version of the state for any contract or address.
Okay, so EoBSV is just a hybrid node, comprised of one part EVM node and one part BSV app service, which writes the state of all ETH blocks into BSV.
What good does this do over a stock ETH node?
It costs cheaper to write transactions to, given to the fact that gas on BSV is effectively free.
It doesn’t have scaling issues in the form of having to store an ever-increasing state graph.
It keeps up to sync with the existing ETH network for applications that are still using ETH nodes as their primary ledger of truth.
It uses its BSV UXTO store version of the ETH state for applications that have moved over to EoBSV and create transactions for them that do not communicate back to the legacy ETH network.
Dr. Craig Wright introduced the idea of Bitcoin
As an application looking to migrate, I would imagine this is a one-way process.
Also, once a smart contract or a transaction committed on EoBSV has been made, then other users who are not using EoBSV aware wallets (and only ETH aware wallets) won’t see the updated state, which exists only on the EoBSV side. This will make application migrations a bit tricky and require coordination. However, once a user base has been moved over, if anyone who has yet to migrate complains about not seeing the up-to-date status of a contract or an account balance, the simple way to fix this is to have them update their wallet to an EoBSV aware one.
In this fashion, this is similar to how tokens work over BSV. When a user using a token-aware wallet sends tokens to someone who doesn’t have a token-aware wallet, they do not see the balance. Even if they cannot see it or spend it, it doesn’t mean that the tokens are ‘broken’ or lost. It just means that the recipient needs to update their app or wallet to one that can recognize the token format, and they will be instantly able to see and transact in the token.
Similarly, if, for instance, CryptoKitties3 were to port1 their service to send their transactions to EoBSV instead of ETH due to the lower fees, then they would start to send their ETH transactions with a corresponding BSV transaction (to pay the BSV miners), perhaps atomically swapped from their ETH balance. Because this fee is much too low to be processed on the ETH network, it likely gets rejected. But the EoBSV node picks it up and records it on the BSV blockchain instead. Henceforth if the users of CryptoKitties3 want to see their updates, they will have to update their wallet to a version that connects to an EoBSV node, which is the only place where they will have the correct balances and state.
In my opinion, what Dr. Wright is suggesting is not that ETH and BSV can be effectively run together as a bridged network, or ‘cross-chains’ as the popular term is these days, but BSV can be used as the scalable backend to run any other blockchain on top, such that migration to the “onBSV” version is a possible scaling strategy for applications and developers on ETH who have spent countless millions of dollars and man-hours developing a platform and business idea on a platform that they later on realized could not scale to meet the demand of their business model, due to the fact of their blockchain being ‘too crowded’ or ‘over used’ by other users and apps.
Dr. Craig Wright on GBC22
In the end, it is always possible to build a Proof of Stake system on top of a Proof of Work one, but not the other way around.
It is possible to build a private system on top of a public one2, but not the other way around.
It is possible to build an encrypted system on top of an unencrypted one3, but not the other way around.
It is possible to build an insecure system on top of a secure one, but not the other way around.
It is possible to build a non-scalable system on a scalable one, but not the other way around.
BSV is Proof of Work, public, unencrypted, secure, and scalable. It can act as the base layer for all other blockchain applications.
I think this was the gist of Dr. Wright’s challenge to Ethereum.
Game on.
/Jerry Chan
***
NOTES:
[1] Recall that EoBSV nodes have up to date ETH balances for ALL ETH users and smart contracts by the fact that it listens to and keeps in sync with the ETH blockchain
[2] VPNs are private networks on top of a public internet, for instance.
[3] Just try building a non-encrypted system in one that is encrypted by default. While you are at it, try touching your forehead with your tongue.
Watch the BSV Global Blockchain Convention Dubai 2022 Day 1 here:
https://www.youtube.com/watch?v=ggbZ8YedpBE
Watch the BSV Global Blockchain Convention Dubai 2022 Day 2 here:
https://www.youtube.com/watch?v=RzJsCRb6zt8
Watch the BSV Global Blockchain Convention Dubai 2022 Day 3 here:
https://www.youtube.com/watch?v=RzSCrXf1Ywc
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.
Source thanks to Jerry Chan https://coingeek.com/bitcoin-as-a-base-layer-as-explained-by-bitcoin-inventor-craig-wright-at-bsv-global-blockchain-convention/
Quote
📚 nChain & CSW patent pool
No patent trolling, quite the contrary. Note that nChain and CSW make the patents available in a pool, so the protected technologies are legally exploitable as long as you take a license, honestly the costs are very affordable (so to speak almost given) for small and medium sized companies who wish to benefit from the numerous technologies. For large companies there are also tailor-made solutions.
Check, Bitcoin & Blockchain patent pool is on https://ipwe.com/
No patent trolling, quite the contrary. Note that nChain and CSW make the patents available in a pool, so the protected technologies are legally exploitable as long as you take a license, honestly the costs are very affordable (so to speak almost given) for small and medium sized companies who wish to benefit from the numerous technologies. For large companies there are also tailor-made solutions.
Check, Bitcoin & Blockchain patent pool is on https://ipwe.com/