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Smart Money, Dumb Contracts: How Fat Cats Can Eat Blind Mice
I like to post my CoinTelegraph articles on here, becasue I think it ellicits more thoughtful comments, so- here's the latest one:
Regulation is a game of cat and mouse. In the age of high-frequency trading, the time honored equilibrium in the feedback loop of pursuit, capture and escape is becoming increasingly distorted.
Long and arduous is the process by which financial regulation is conceived and implemented, taking on the order of months to fully realize.
This is a classical procedure which traces its roots back to an age where commodities crossed the Atlantic on schooners and the code of conduct was scrawled out longhand with quill pens. In those days of yore, if legislation contained a failure or loophole it could be exploited only so many times before it was possible to stem the breach.
Our digital age is described by, among other things, adaptive machine learning processes that are capable of executing transactions in fractions of a second. As such, while the time horizon during which legislative oversights might remain vulnerable has generally remained constant, our ability to exploit them has increased by a degree previously unimaginable.
Fat cats vs. blind mice
The Flash Crash of 2010 was a trillion-dollar stock market collapse that started and ended during a period of approximately 36 minutes.
In his recent book Our Revolution, Bernie Sanders prides himself on a filibuster which lasted eight hours. That means that while Bernie was so eloquently holding forth on the floor of the United States Senate, the American economy could have experienced more than 13 consecutive trillion-dollar stock market crashes.
It would seem that there is a fundamental discrepancy between the way our modern financial markets function and the way they are policed. The financial industry is fiercely competitive and encourages a Darwinian impetus to improvement. The legislative industry labors under no such compunctions. In the cat and mouse struggle previously alluded to, it seems the so-called fat cats have grown considerably more fleet than the blind mice of justice.
Get smart
The investigations of the Flash Crash were said to be prolonged due to the fact that regulators figuratively used the equivalent of bicycles in an effort to apprehend speeding Ferraris. In essence, regulations can be thought of as a contract.
Machine learning algorithms can grow and adapt in seconds or less, while regulation takes on the order of months or more. It would seem that were regulation to keep up it would need to be more fluid, more adaptable.
How could this be possible? Perhaps what is called for is a smart contract-based regulatory environment that can adapt in accordance with a predetermined set of parameters, to the behaviors of market participants.
FCA tech sprint
Its an anomalous state of affairs that in the native land of Sir Jonathan Ive, Charles Babbage, Alan Turing, Vice Admiral Horatio Nelson, Field Marshal Arthur Wellesley and the Spice Girls that there are so precious few world renowned tech companies (should we count DeepMind?).
In fact, one of the only vibrant and globally competitive industries that remain in Great Britain is financial services. Accordingly, the Bank of England and the rest of the city are quite keen on keeping abreast of the emerging trends in so-called FinTech.
It stands to reason then that the Financial Conduct Authority recently organized their first Tech Sprint (viz. Hackathon), inviting innovators from around the world to come to Cambridge and demo the latest advances in the field.
Flash Crash can repeat itself
Of the organizations in attendance eccenca GmbH of Leipzig unanimously blew away those in attendance with the presentation of a framework pioneering a new architecture for logic based regulation.
At a high level, this equates to describing regulation in machine-readable computer code, a necessary prerequisite to smart contract based regulation. We find ourselves today in the undesirable situation of attempting to govern digital-age technology with depression-era legislation.
Five years after the Flash Crash, traders can still manipulate and impact markets using automated trade systems that have only increased in sophistication.
The logic based corporate governance model of eccenca and other similar initiatives are leading the charge in achieving some semblance of parity in the struggle to maintain regularity in the global financial system.
Ripped from the headlines
One year ago the Commodity Futures Trading Commission (CFTC) of the United States established a regime of regulatory requirements circumscribing the requisite margin on trades between swap dealers and other firms that werent routed through clearinghouses.
This policy as released at the time contained a glaring loophole which essentially constituted carte blanche for banks to shift the targeted swaps business overseas with impunity. It was five long months before that hole was identified and corrective measures were taken.
In the interim how much strain was put on the financial system? How much tax revenue was forfeit? How much additional risk was borne by the world economy?
Times are changing
For the majority of human civilization, the lives of people in their local communities remained substantially unchanged, with respect to technology or culture, across the decades.
If your father was born in a small shtetl with no running water or electricity it was likely that you would live out the course of your own life in the same way, in the same place. It was likely that your children, your childrens children, and so on, would do the same. This epoch is over.
My own life began in the year that hallmarked the modern age, with Tim Berners-Lees invention of the World Wide Web and the ceremonious dismemberment of the Berlin Wall (Antifaschistischer Schutzwall).
All of us alive today have born witness to the dizzying pace of technological and social change that describes our times. The tempo of this change is ever hastening, like the power ballad "Freebird" by the American rock band Lynyrd Skynyrd. This epoch has just begun.
The time for ideas and institutions of the past epoch is quickly running out. The time for modernization is now. Change is the only constant.
From smart contracts to smart regulations we can rest assured that these shifting dynamics will present sizable opportunities for those who are prepared to seize them.
Original link: https://cointelegraph.com/news/smart-money-dumb-contracts-how-fat-cats-can-eat-blind-mice
as always- very interested to know what you guys think!
Regulation is a game of cat and mouse. In the age of high-frequency trading, the time honored equilibrium in the feedback loop of pursuit, capture and escape is becoming increasingly distorted.
Long and arduous is the process by which financial regulation is conceived and implemented, taking on the order of months to fully realize.
This is a classical procedure which traces its roots back to an age where commodities crossed the Atlantic on schooners and the code of conduct was scrawled out longhand with quill pens. In those days of yore, if legislation contained a failure or loophole it could be exploited only so many times before it was possible to stem the breach.
Our digital age is described by, among other things, adaptive machine learning processes that are capable of executing transactions in fractions of a second. As such, while the time horizon during which legislative oversights might remain vulnerable has generally remained constant, our ability to exploit them has increased by a degree previously unimaginable.
Fat cats vs. blind mice
The Flash Crash of 2010 was a trillion-dollar stock market collapse that started and ended during a period of approximately 36 minutes.
In his recent book Our Revolution, Bernie Sanders prides himself on a filibuster which lasted eight hours. That means that while Bernie was so eloquently holding forth on the floor of the United States Senate, the American economy could have experienced more than 13 consecutive trillion-dollar stock market crashes.
It would seem that there is a fundamental discrepancy between the way our modern financial markets function and the way they are policed. The financial industry is fiercely competitive and encourages a Darwinian impetus to improvement. The legislative industry labors under no such compunctions. In the cat and mouse struggle previously alluded to, it seems the so-called fat cats have grown considerably more fleet than the blind mice of justice.
Get smart
The investigations of the Flash Crash were said to be prolonged due to the fact that regulators figuratively used the equivalent of bicycles in an effort to apprehend speeding Ferraris. In essence, regulations can be thought of as a contract.
Machine learning algorithms can grow and adapt in seconds or less, while regulation takes on the order of months or more. It would seem that were regulation to keep up it would need to be more fluid, more adaptable.
How could this be possible? Perhaps what is called for is a smart contract-based regulatory environment that can adapt in accordance with a predetermined set of parameters, to the behaviors of market participants.
FCA tech sprint
Its an anomalous state of affairs that in the native land of Sir Jonathan Ive, Charles Babbage, Alan Turing, Vice Admiral Horatio Nelson, Field Marshal Arthur Wellesley and the Spice Girls that there are so precious few world renowned tech companies (should we count DeepMind?).
In fact, one of the only vibrant and globally competitive industries that remain in Great Britain is financial services. Accordingly, the Bank of England and the rest of the city are quite keen on keeping abreast of the emerging trends in so-called FinTech.
It stands to reason then that the Financial Conduct Authority recently organized their first Tech Sprint (viz. Hackathon), inviting innovators from around the world to come to Cambridge and demo the latest advances in the field.
Flash Crash can repeat itself
Of the organizations in attendance eccenca GmbH of Leipzig unanimously blew away those in attendance with the presentation of a framework pioneering a new architecture for logic based regulation.
At a high level, this equates to describing regulation in machine-readable computer code, a necessary prerequisite to smart contract based regulation. We find ourselves today in the undesirable situation of attempting to govern digital-age technology with depression-era legislation.
Five years after the Flash Crash, traders can still manipulate and impact markets using automated trade systems that have only increased in sophistication.
The logic based corporate governance model of eccenca and other similar initiatives are leading the charge in achieving some semblance of parity in the struggle to maintain regularity in the global financial system.
Ripped from the headlines
One year ago the Commodity Futures Trading Commission (CFTC) of the United States established a regime of regulatory requirements circumscribing the requisite margin on trades between swap dealers and other firms that werent routed through clearinghouses.
This policy as released at the time contained a glaring loophole which essentially constituted carte blanche for banks to shift the targeted swaps business overseas with impunity. It was five long months before that hole was identified and corrective measures were taken.
In the interim how much strain was put on the financial system? How much tax revenue was forfeit? How much additional risk was borne by the world economy?
Times are changing
For the majority of human civilization, the lives of people in their local communities remained substantially unchanged, with respect to technology or culture, across the decades.
If your father was born in a small shtetl with no running water or electricity it was likely that you would live out the course of your own life in the same way, in the same place. It was likely that your children, your childrens children, and so on, would do the same. This epoch is over.
My own life began in the year that hallmarked the modern age, with Tim Berners-Lees invention of the World Wide Web and the ceremonious dismemberment of the Berlin Wall (Antifaschistischer Schutzwall).
All of us alive today have born witness to the dizzying pace of technological and social change that describes our times. The tempo of this change is ever hastening, like the power ballad "Freebird" by the American rock band Lynyrd Skynyrd. This epoch has just begun.
The time for ideas and institutions of the past epoch is quickly running out. The time for modernization is now. Change is the only constant.
From smart contracts to smart regulations we can rest assured that these shifting dynamics will present sizable opportunities for those who are prepared to seize them.
Original link: https://cointelegraph.com/news/smart-money-dumb-contracts-how-fat-cats-can-eat-blind-mice
as always- very interested to know what you guys think!
Steemit’s New Business Model Shows How Compensation by Micro Contributions Works
When you post something on a popular microblogging service and it generates a high degree of positive feedback by some metric, for instance likes, you have just created value for that company.
When you issue a query to an Internet search engine and click through to a result, you have just created value for that company.
When you post a photo of your handsome face to a certain service, and many people share it across the Web... you probably get the picture.
#$%! you, pay me
This altruistic contribution to the bottom line of Silicon Valley-based behemoth corporations is at the crux of how an organization, with a scant few bean bag chair laden offices, can create value for millions upon millions of customers.
British evolutionary biologist Richard Dawkins argues that at the core of seemingly altruistic exchanges is often a latent horse-trading process.
For instance, your parents take care of you because you share half of their genes and you are hopefully* an efficient and natural gene propagation mechanism. Then why do so many people while away their days improving the product offering of faceless social media companies?
The reason is that they do in fact derive some value from this interaction in the form of recognition from their network connections. Some people thrive on this attention. For better or worse I personally know a few of them.
But is this remuneration sufficient? Could we create a better model for such services?
More than hot air
Steemit is a news service website which combines blogging and social networking.
Frankly, that sounds like a bunch of hot air. However, Steemit has added a new dynamic to this well-worn paradigm in the form of compensation for users based on the popularity of their contributions in the form of a platform-centric cryptocurrency known as Steem.
The facility with which one can disseminate small payments across the Internet using cryptocurrencies is what makes this service possible.
Jump ship
Once in awhile, its interesting to look for something online using a second tier search engine, just to remind oneself of how abysmal they are.
But what if that company were able to offer you a superior value proposition in the form of direct compensation? Imagine a world wherein a scrappy newcomer to the search game could bootstrap their data acquisition process by paying users to issue queries on its site.
This business model sounds completely unsustainable - and it is - but with adequate financial backing it could enable them to harness the initial information capital needed to make a run at the entrenched market players. Recall that PayPal started out by paying people $25.00 a piece to try out their service.
Next level
How does mining work within the Steemit economy? How do they prevent inflation? What would happen if the value of Steemit greatly exceeded the value of an individual post? How will they adjust the rate of compensation?
Obviously, there are a few questions to work out to create a fully viable system based on this model, however, Steemit represents a laudable first effort. Personally, I commend them on the penetrating insight and considerable chutzpah it must have taken to conceive and implement this concept. If I were to design this system under the prevailing economic conditions I would use Bitcoin to motivate contributors, it strikes me as a simpler model.
Nevertheless, it will be interesting to see how Steemit and platforms of a similar nature will develop going forward.
Good news?
In the modern economy, people are being made redundant and laid off in droves, hordes of young people are unable to find employment and the competitiveness of the now global labor market have increased. Perhaps compensating people for incremental micro-contributions to online platforms will create for them a new sustainable career path.
*The fact that youre reading this article greatly increases the probability that you fall into this category.
That text comes from my latest article on CoinTelegraph, you can see the original post here:
https://cointelegraph.com/news/steemits-new-business-model-shows-how-compensation-by-micro-contributions-works
When you issue a query to an Internet search engine and click through to a result, you have just created value for that company.
When you post a photo of your handsome face to a certain service, and many people share it across the Web... you probably get the picture.
#$%! you, pay me
This altruistic contribution to the bottom line of Silicon Valley-based behemoth corporations is at the crux of how an organization, with a scant few bean bag chair laden offices, can create value for millions upon millions of customers.
British evolutionary biologist Richard Dawkins argues that at the core of seemingly altruistic exchanges is often a latent horse-trading process.
For instance, your parents take care of you because you share half of their genes and you are hopefully* an efficient and natural gene propagation mechanism. Then why do so many people while away their days improving the product offering of faceless social media companies?
The reason is that they do in fact derive some value from this interaction in the form of recognition from their network connections. Some people thrive on this attention. For better or worse I personally know a few of them.
But is this remuneration sufficient? Could we create a better model for such services?
More than hot air
Steemit is a news service website which combines blogging and social networking.
Frankly, that sounds like a bunch of hot air. However, Steemit has added a new dynamic to this well-worn paradigm in the form of compensation for users based on the popularity of their contributions in the form of a platform-centric cryptocurrency known as Steem.
The facility with which one can disseminate small payments across the Internet using cryptocurrencies is what makes this service possible.
Jump ship
Once in awhile, its interesting to look for something online using a second tier search engine, just to remind oneself of how abysmal they are.
But what if that company were able to offer you a superior value proposition in the form of direct compensation? Imagine a world wherein a scrappy newcomer to the search game could bootstrap their data acquisition process by paying users to issue queries on its site.
This business model sounds completely unsustainable - and it is - but with adequate financial backing it could enable them to harness the initial information capital needed to make a run at the entrenched market players. Recall that PayPal started out by paying people $25.00 a piece to try out their service.
Next level
How does mining work within the Steemit economy? How do they prevent inflation? What would happen if the value of Steemit greatly exceeded the value of an individual post? How will they adjust the rate of compensation?
Obviously, there are a few questions to work out to create a fully viable system based on this model, however, Steemit represents a laudable first effort. Personally, I commend them on the penetrating insight and considerable chutzpah it must have taken to conceive and implement this concept. If I were to design this system under the prevailing economic conditions I would use Bitcoin to motivate contributors, it strikes me as a simpler model.
Nevertheless, it will be interesting to see how Steemit and platforms of a similar nature will develop going forward.
Good news?
In the modern economy, people are being made redundant and laid off in droves, hordes of young people are unable to find employment and the competitiveness of the now global labor market have increased. Perhaps compensating people for incremental micro-contributions to online platforms will create for them a new sustainable career path.
*The fact that youre reading this article greatly increases the probability that you fall into this category.
That text comes from my latest article on CoinTelegraph, you can see the original post here:
https://cointelegraph.com/news/steemits-new-business-model-shows-how-compensation-by-micro-contributions-works
Re: Dive Into the Stellar Consensus Protocol: Interstella 5555
I see your point- what I was trying to say was that, Seller is a kind of... social way to make consensus, based on trusted nodes, not just raw hashing power- you know?
Anyway I probably didn't express it clearly, I'm still trying to get the hang of writing these sort of informal articles.
Anyway I probably didn't express it clearly, I'm still trying to get the hang of writing these sort of informal articles.
Dive Into the Stellar Consensus Protocol: Interstella 5555
So Stellar seems pretty cool, I've been researching it a bit these days, wrote up my findings in this CoinTelegraph article:
https://cointelegraph.com/news/dive-into-the-stellar-consensus-protocol-interstella-5555
As always I'm very interested to know how the *real* bitcoin community, viz. you guys, receives this piece.
here's the full text:
Humans are social creatures and society is based on interpersonal trust relationships. If you hear from the CEO of an oil company that global warming is not a man-made phenomenon, you may believe that he might be biased, and such information would be taken into account in deciding whether or not to take him at his word. By the same measure if you read an article on Cointelegraph that recommends the Stellar Consensus Protocol, you would be favourably disposed to investigate it, because you know that the author of the piece is a highly cultivated gentleman and a distinguished scholar. We weight the value of the information we receive by the degree to which we trust the source of that information. This is a remarkably effective heuristic for filtering through the deluge of information that seeks to DDOS our senses in the digital age.
The worlds most cited scientific journal is titled Nature, because ideally the goal of science is to discover and utilize fundamental characteristics of the natural physical world and universe. The Stellar Protocol recognizes the natural information provenance heuristic described above and applies it in an ingenious way to the manufacturing of consensus in a distributed system.
It just so happens that the information provenance heuristic is the selfsame one that the author of this article used in his initial evaluation of Stellar. Blockchain transaction networks are distributed systems, so one would expect that the knowledge required to create the file sharing platform eDonkey, would serve as a solid foundation to bootstrap ones appreciation of cryptocurrency systems. The worlds first Bitcoin exchange is associated nowadays with chicanery and malfeasance of the highest order, however that was mostly the work of MagicalTux a.k.a. Mark Karpelès. Before Mt. Gox imploded, it was the brainchild of Jed McCaleb who began the exchange after having created eDonkey. McCaleb sold Mt. Gox to Karpelès in 2011. Subsequently McCaleb conceived the idea of the Ripple payment protocol, one of the undisputed darlings of the Blockchain ecosystem with multi-million dollar venture funding rounds under its belt and large global financial institutions among its list of satisfied customers. This is interesting pedigree and with knowledge of the history of the organisation, and when one is made aware that McCaleb is also a co-founder of the Stellar Development Foundation, it might provoke one to consider Stellar more closely.
Even if McCaleb was the sole operator of Stellar, that would have been enough to peak the curiosity of most people, however, Stellar also has Professor David Mazières in the role of chief scientist. At Stanford University, Mazières leads the Secure Computer Systems Group and if these qualifications are not enough to convince you to take a look at Stellar, Mazières is also a past master in the subtle art of UX, as is evidenced by his phenomenal personal website.
Now that you know a bit about Stellar, and your information provenance heuristic has been satiated, the next logical question that comes to your mind is how can I interact with Stellar myself? - fret not - in that regard we also have you covered.
Stellar aims for the stars, and the nearest star system to us is Alpha Centauri! The next step towards getting there is a functional app for sending and receiving payments with Stellar. Centaurus is the first wallet application build for deployment on the Android platform and was recently awarded best wallet in the Stellar Build Challenge.
As the ecosystem around the Stellar network continues to grow and flourish, it will be interesting to see how the system develops. The information that you decide to propagate to the nodes in your social network, and what you choose to say to those nodes that trust your personal judgement, will have no small part to play in that story.
https://cointelegraph.com/news/dive-into-the-stellar-consensus-protocol-interstella-5555
As always I'm very interested to know how the *real* bitcoin community, viz. you guys, receives this piece.
here's the full text:
Humans are social creatures and society is based on interpersonal trust relationships. If you hear from the CEO of an oil company that global warming is not a man-made phenomenon, you may believe that he might be biased, and such information would be taken into account in deciding whether or not to take him at his word. By the same measure if you read an article on Cointelegraph that recommends the Stellar Consensus Protocol, you would be favourably disposed to investigate it, because you know that the author of the piece is a highly cultivated gentleman and a distinguished scholar. We weight the value of the information we receive by the degree to which we trust the source of that information. This is a remarkably effective heuristic for filtering through the deluge of information that seeks to DDOS our senses in the digital age.
The worlds most cited scientific journal is titled Nature, because ideally the goal of science is to discover and utilize fundamental characteristics of the natural physical world and universe. The Stellar Protocol recognizes the natural information provenance heuristic described above and applies it in an ingenious way to the manufacturing of consensus in a distributed system.
It just so happens that the information provenance heuristic is the selfsame one that the author of this article used in his initial evaluation of Stellar. Blockchain transaction networks are distributed systems, so one would expect that the knowledge required to create the file sharing platform eDonkey, would serve as a solid foundation to bootstrap ones appreciation of cryptocurrency systems. The worlds first Bitcoin exchange is associated nowadays with chicanery and malfeasance of the highest order, however that was mostly the work of MagicalTux a.k.a. Mark Karpelès. Before Mt. Gox imploded, it was the brainchild of Jed McCaleb who began the exchange after having created eDonkey. McCaleb sold Mt. Gox to Karpelès in 2011. Subsequently McCaleb conceived the idea of the Ripple payment protocol, one of the undisputed darlings of the Blockchain ecosystem with multi-million dollar venture funding rounds under its belt and large global financial institutions among its list of satisfied customers. This is interesting pedigree and with knowledge of the history of the organisation, and when one is made aware that McCaleb is also a co-founder of the Stellar Development Foundation, it might provoke one to consider Stellar more closely.
Even if McCaleb was the sole operator of Stellar, that would have been enough to peak the curiosity of most people, however, Stellar also has Professor David Mazières in the role of chief scientist. At Stanford University, Mazières leads the Secure Computer Systems Group and if these qualifications are not enough to convince you to take a look at Stellar, Mazières is also a past master in the subtle art of UX, as is evidenced by his phenomenal personal website.
Now that you know a bit about Stellar, and your information provenance heuristic has been satiated, the next logical question that comes to your mind is how can I interact with Stellar myself? - fret not - in that regard we also have you covered.
Stellar aims for the stars, and the nearest star system to us is Alpha Centauri! The next step towards getting there is a functional app for sending and receiving payments with Stellar. Centaurus is the first wallet application build for deployment on the Android platform and was recently awarded best wallet in the Stellar Build Challenge.
As the ecosystem around the Stellar network continues to grow and flourish, it will be interesting to see how the system develops. The information that you decide to propagate to the nodes in your social network, and what you choose to say to those nodes that trust your personal judgement, will have no small part to play in that story.
Recently I've been reading a lot of Carl Jung and it inspired my latest article in CoinTelegraph, you can read it here:
https://cointelegraph.com/news/make-something-people-want-how-blockchain-has-become-a-fetish
or- I've also reproduced it below.
I'd be interested to hear what you guys think!
----------------------------------------------------------------------------------------------------------------
Desire for an entity that is believed to convey supernatural powers, eliciting a condition of intense excitement. We call this fetishism. An old idea is that our consumer society is afflicted by a fetish for commodities, coveting the trappings of a phantasmagoric existence. More recently the idea of Blockchain has emerged as an object of contemporary fetish. Weve heard that its bigger than the Internet itself! Its, almost, bigger than The Beatles! Given this state of affairs one might start to wonder - from whence did this adulation of Blockchain arise?
The situation is analogous to the great technological fetish concept of artificial intelligence and the never ending stream of dubious research and claims it provokes, in stark contrast to the more somber and practical field of machine learning, which is more firmly rooted in the realm of the empirically possible. As the idea of Bitcoin and cryptocurrencies becomes more normalized, they cease to function as a tabula rasa upon which we can project our wildest fantasies and increasingly we turn to the idea of Blockchain to satisfy this need.
Blockchain vs. The Beatles
In order for a technology to catch hold of the collective unconscious (kollektives Unbewusstes) in the fantastic way that the first Bitcoin and now Blockchain seem to have done, it must satisfy three pre-conditions.
Poor Comprehension
It mustn't be well understood. Therefore the concept itself is ill defined. This is a fundamental quality, in the absence of which erroneous ideas could be easily pinned down and refuted. We can assume with a high probability that there are no more than 1,000 people in the world today who are very familiar with Bitcoin and its associated design principles and data structure. In fact the open source repository on GitHub lists slightly more than 400 contributors.
Contrast this with a field such as machine learning, it is much older and the basic principles upon which it rests are thoroughly comprehended by many persons. All self-respecting university computer science departments teach courses on machine learning, a search in the books subsection of Amazon yields 13,452 results for "machine learning", while there were 1,007 results for "Bitcoin" and a mere 181 results for "Blockchain". This demonstrates the lack of a serious mediating influence on the faucet of ideas generated about Blockchain. The resultant situation equates to a carte blanche for charlatans and snake oil salesmen to peddle their trade.
Broad Generalizability
It needs to touch the lives of many people. Large swaths of the population, including many people with no ability or motivation to understand the technical aspects of the ideas they are confronted with, must get excited about it. Should they begin to propagate the highly speculative concepts and notions they have happened upon in a virtuous circle of hype, we have the makings of a fetishism on our hands.
Consider again the original fetish technology- artificial intelligence- which has the potential to improve all aspects of society. By the same measure it has the potential to enslave the human race. Money is also a social technology with these characteristics. The fact that it could, and perhaps has already begun to, change the lives of everyone in society is an indispensable component of Blockchains fetish nature.
Tangible Benefits
Justin Bieber would not be as popular as he is if he were not a great performer. By the same measure, were a technology not to provide real advantages in actual fact no one would pay attention to it. Generally people are pretty intelligent and so any technology that has achieved the measure of mainstream recognition that Blockchain has must be possessed with tangible benefits.
Fundamental Value Proposition
Consider the essence of true wealth. Does this property emerge from the possession of a new smartphone? An attractive automobile? A penthouse flat? Or is it rather from the ability to command the social capital - relationships - that make it possible to manifest all these things in the first place? Commodity fetishism describes the phenomenon wherein people desire the accoutrements of wealth in the mistaken belief that these things are what confer power, as opposed to the other way around. Fetishism for a technology like Blockchain likewise inverts this cause and affects relationships and propagates the notion of Blockchain as panacea.
Traditionally there are two distinct types of value. The first, value in use is whether or not a thing is useful inherently in accomplishing a particular aim. In contrast value in general equates to the socially necessary labor time expended to create it. However, there is a third type of value. The value of a thing is inextricable from the social relationships in which it is enmeshed, inextricable from its context. This is its perceived value- its fetish value. The legendary investor behind Y Combinator and paragon of Silicon Valley culture Paul Graham, has coined the motto make something people want. In its role as a technological fetish object Blockchain is, at least for the moment, something that people want, that people desire.
https://cointelegraph.com/news/make-something-people-want-how-blockchain-has-become-a-fetish
or- I've also reproduced it below.
I'd be interested to hear what you guys think!
----------------------------------------------------------------------------------------------------------------
Desire for an entity that is believed to convey supernatural powers, eliciting a condition of intense excitement. We call this fetishism. An old idea is that our consumer society is afflicted by a fetish for commodities, coveting the trappings of a phantasmagoric existence. More recently the idea of Blockchain has emerged as an object of contemporary fetish. Weve heard that its bigger than the Internet itself! Its, almost, bigger than The Beatles! Given this state of affairs one might start to wonder - from whence did this adulation of Blockchain arise?
The situation is analogous to the great technological fetish concept of artificial intelligence and the never ending stream of dubious research and claims it provokes, in stark contrast to the more somber and practical field of machine learning, which is more firmly rooted in the realm of the empirically possible. As the idea of Bitcoin and cryptocurrencies becomes more normalized, they cease to function as a tabula rasa upon which we can project our wildest fantasies and increasingly we turn to the idea of Blockchain to satisfy this need.
Blockchain vs. The Beatles
In order for a technology to catch hold of the collective unconscious (kollektives Unbewusstes) in the fantastic way that the first Bitcoin and now Blockchain seem to have done, it must satisfy three pre-conditions.
Poor Comprehension
It mustn't be well understood. Therefore the concept itself is ill defined. This is a fundamental quality, in the absence of which erroneous ideas could be easily pinned down and refuted. We can assume with a high probability that there are no more than 1,000 people in the world today who are very familiar with Bitcoin and its associated design principles and data structure. In fact the open source repository on GitHub lists slightly more than 400 contributors.
Contrast this with a field such as machine learning, it is much older and the basic principles upon which it rests are thoroughly comprehended by many persons. All self-respecting university computer science departments teach courses on machine learning, a search in the books subsection of Amazon yields 13,452 results for "machine learning", while there were 1,007 results for "Bitcoin" and a mere 181 results for "Blockchain". This demonstrates the lack of a serious mediating influence on the faucet of ideas generated about Blockchain. The resultant situation equates to a carte blanche for charlatans and snake oil salesmen to peddle their trade.
Broad Generalizability
It needs to touch the lives of many people. Large swaths of the population, including many people with no ability or motivation to understand the technical aspects of the ideas they are confronted with, must get excited about it. Should they begin to propagate the highly speculative concepts and notions they have happened upon in a virtuous circle of hype, we have the makings of a fetishism on our hands.
Consider again the original fetish technology- artificial intelligence- which has the potential to improve all aspects of society. By the same measure it has the potential to enslave the human race. Money is also a social technology with these characteristics. The fact that it could, and perhaps has already begun to, change the lives of everyone in society is an indispensable component of Blockchains fetish nature.
Tangible Benefits
Justin Bieber would not be as popular as he is if he were not a great performer. By the same measure, were a technology not to provide real advantages in actual fact no one would pay attention to it. Generally people are pretty intelligent and so any technology that has achieved the measure of mainstream recognition that Blockchain has must be possessed with tangible benefits.
Fundamental Value Proposition
Consider the essence of true wealth. Does this property emerge from the possession of a new smartphone? An attractive automobile? A penthouse flat? Or is it rather from the ability to command the social capital - relationships - that make it possible to manifest all these things in the first place? Commodity fetishism describes the phenomenon wherein people desire the accoutrements of wealth in the mistaken belief that these things are what confer power, as opposed to the other way around. Fetishism for a technology like Blockchain likewise inverts this cause and affects relationships and propagates the notion of Blockchain as panacea.
Traditionally there are two distinct types of value. The first, value in use is whether or not a thing is useful inherently in accomplishing a particular aim. In contrast value in general equates to the socially necessary labor time expended to create it. However, there is a third type of value. The value of a thing is inextricable from the social relationships in which it is enmeshed, inextricable from its context. This is its perceived value- its fetish value. The legendary investor behind Y Combinator and paragon of Silicon Valley culture Paul Graham, has coined the motto make something people want. In its role as a technological fetish object Blockchain is, at least for the moment, something that people want, that people desire.
clustering addresses, what's the most effective way?
The Fistful of Bitcoins paper [1] by Meiklejohn et al has some nice heuristics. i.e.
HEURISTIC 1. If two (or more) addresses are inputs to the same transaction, they are controlled by the same user; i.e., for any transaction t, all pk ∈ inputs(t) are controlled by the same user.
HEURISTIC 2. The one-time change address is controlled by the same user as the input addresses; i.e., for any transaction t, the controller of inputs(t) also controls the one-time change address pk ∈ outputs(t) (if such an address exists).
Are there any others that are particularly effective?
Is it possible to bootstrap my clustering, for instance, maybe if some people have already associated a certain cluster with Kraken or Satoshi Dice, is this information available?
[1] https://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf
HEURISTIC 1. If two (or more) addresses are inputs to the same transaction, they are controlled by the same user; i.e., for any transaction t, all pk ∈ inputs(t) are controlled by the same user.
HEURISTIC 2. The one-time change address is controlled by the same user as the input addresses; i.e., for any transaction t, the controller of inputs(t) also controls the one-time change address pk ∈ outputs(t) (if such an address exists).
Are there any others that are particularly effective?
Is it possible to bootstrap my clustering, for instance, maybe if some people have already associated a certain cluster with Kraken or Satoshi Dice, is this information available?
[1] https://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf
Is Title Registration a Valid Use Case of Blockchain?
On May 22, 2010 programmer Laszlo Hanyecz paid 10,000 BTC for two Papa Johns pizzas. Today, this humorous anecdote is an integral part of the Bitcoin lore, but behind the veneer of playful naivety, it masks a more sinister truth.
With projects under way in many developing countries to register property and peoples homes on the Blockchain, are we courting a disaster? If a sophisticated programmer is so woefully unaware of the value in such a newfangled digital asset, can we expect that a person new to the idea of Blockchain, and new to the idea of title itself, can hope to do any better? If the answer is anything less than an unequivocal yes, the consequences will be disastrous.
De Sotos vision
The idea of registering title, property rights, on the Blockchain is touted as a mechanism for fostering social inclusion on a mass scale by the likes of Hernando de Soto, founder and president of the Institute for Liberty & Democracy. De Sotos vision is that by giving people a legal claim over their residence, they will have a viable avenue through which they might participate to a greater degree in the larger global economy, for instance, by using their home as collateral in a loan application.
Blockchain boasts a consensus mechanism that makes its application in this domain seem very appealing. On one hand, a corrupt government official is likely to allocate property capriciously. However, in a local community, for example in the Brazilian favelas, the local residents should in theory be able to determine democratically who lives where, and based on this majority opinion, aid in establishing a legal claim of ownership. Thus, shanties that have served as individual homes for years and have clear de facto proprietors, but have had no official, viz. governmental, de jure recognition could give their residents immutable claims to ownership.
Title registry in the hands of this newly minted property class has the potential to afford access to vast stores of global capital hitherto unavailable to them, since they had no property to use as collateral. This has the potential to spawn new and previously unimagined economic growth, or conversely to wreak havoc.
In the Republic of Georgia, efforts by De Soto in conjunction with BitFury and Georgias National Agency of Public Registry (NAPR) are currently implementing a platform for Bockchain-based title registration. Papuna Ugrekhelidze, chairman of the NAPR, remarked in a public statement that by building a Blockchain-based property registry and taking full advantage of the security provided by the Blockchain technology, the Republic of Georgia can show the world that we are a modern, transparent and corruption-free country that can lead the world in changing the way land titling is done and pave the way to additional prosperity for all.
Students of history should be aware of the fact that this is not the first time a wave of mass privatization has swept post-soviet countries. Beginning in 1989, a large-scale privatization of formerly state-owned enterprises resulted in the highly inequitable economic topologies of former USSR territories.
One particularly acute example is the case of MMM, a Russian company that in the 1990s executed what has been called one of the largest Ponzi schemes of all time, defrauding as many as 40 million people to the tune of $10 bln. The case of MMM did not involve title-registration but can be thought of as an historical analogy to illustrate the danger of what might happen when people come into possession of complicated assets that they neither fully appreciate nor comprehend.
Privatization across the crumbling socialist republics often took the form of vouchers, exchangeable for partial ownership of large hitherto state-run institutions, distributed amongst local populations, in places such as the current Republic of Georgia. Scam artists at MMM proved highly adept at convincing unsuspecting proprietors to part with their new and complicated assets for the equivalent of peanuts.
Bitnations Experiment in Land Registry
In the 2008 film Che, Ernesto Guevara states that a country that doesnt know how to read and write is easy to deceive. In the current situation we are likewise talking about literacy, private property literacy and Blockchain technology literacy. Educating people in these disciplines will be hard work, but its nothing that blockchain registry proponents should shy away from; rather, these should become focal points of any efforts going forward.
Property literacy is a term we need to understand to mean an appreciation for the system of land registration and ownership as commonly understood through the lens of modern global capitalism. The West African nation of Ghana is a country where property literacy is not yet pervasive through all levels of society, as indicated by the fact that 70 percent of land lacks proper title.
In keeping with the conceptual framework of De Soto, the organization Bitnation which positions itself as a catalyst to streamline governance processes through the use of Blockchain technology, has implemented a Blockchain-based land title registration system in Ghana. Founder and CEO, Susanne Tarkowski Tempelhof, explained to Bitcoin Magazine the benefits of these efforts.
She stated:
As Bockchain applications such as recording trading and physical assets (land, cars, metals etc) emerges in the mainstream, there's a fear of people not understanding the value of the Blockchain asset record, and recklessly trading with it, or lending money against it.
She adds:
While this is certainly something to be concerned about during the first years, (probably even decade on the market) I believe it's worth the risk, because the upside is economic empowerment for millions of people, particularly in developing nations with none or weak previous access to create verifiable and immutable ownership records.
The ability to seamlessly trade assets like land with each other, and lend money against those assets to finance personal educational or entrepreneurial undertakings will dramatically increase the speed and quality of economic development in frontier and emerging markets, while giving the population a better chance of recourse in case predatory entities such as national governments or local extortion rackets attempt to hijack private property.
As we endeavour to introduce experimental foreign institutions to people and lands where they are unfamiliar we might also do well to bring them the golden rule of modern capitalism - caveat emptor or let the buyer beware. And to those who claim that their efforts will help the disenfranchised of this earth we offer the message primum non nocere or first, do no harm.
Yeah, so that's my new article. Original version is here: https://cointelegraph.com/news/is-title-registration-a-valid-use-case-of-blockchain-or-we-are-courting-disaster
I'd be interested to know what you guys think
What are the properties of the Bitcoin data structure?
I'm trying to describe the Bitcoin data structure, so I want to name all the properties it has, so far I have these:
--> Pseudo-Anonymity
--> Replicated Database
--> Providence of Transactions
--> Distributed Consensus
--> Proof-of-Work
Am I missing any?
If you want to add one, or indicate a good resource where the properties of the Bitcoin data structure are demonstrated in a very clear way that would be excellent.
--> Pseudo-Anonymity
--> Replicated Database
--> Providence of Transactions
--> Distributed Consensus
--> Proof-of-Work
Am I missing any?
If you want to add one, or indicate a good resource where the properties of the Bitcoin data structure are demonstrated in a very clear way that would be excellent.
geographic distrobution of accomplices for improved outcome in race condition
⭐ Merited by ETFbitcoin (1)
I guess it would help you to win a race condition if you had accomplices from all over the world, say Berlin, Beijing, Boston, and Buenos Aires all propagate your transaction to the nodes that they're connected to, when trying to execute a successful double spend. Is is so?
lower bound of block size towards increased speed of propagation
⭐ Merited by ETFbitcoin (1)
As far as I know there is an upper bound of a block, which is one megabyte, is there a lower bound?
It was in terms of a race condition that I was considering this.
Imagine you make a double spend and then you try to propagate a block that contains only your second transaction. If so it would be much smaller, ipso facto easier to propagate around the network and get validated by nodes, isn't that right?
Maybe someone in the mean time would find a valid block for one containing many transactions, in which case it would be longer than yours, and maybe other miners would extend that- but maybe not.
Does anyone want to try this out on the testnet with me?
PS. I'm posting this here because I got no response on stackexchange
It was in terms of a race condition that I was considering this.
Imagine you make a double spend and then you try to propagate a block that contains only your second transaction. If so it would be much smaller, ipso facto easier to propagate around the network and get validated by nodes, isn't that right?
Maybe someone in the mean time would find a valid block for one containing many transactions, in which case it would be longer than yours, and maybe other miners would extend that- but maybe not.
Does anyone want to try this out on the testnet with me?
PS. I'm posting this here because I got no response on stackexchange
Blockchain for President: How It Can Disrupt US Voting Machine
Here's kind of a silly article I wrote recently for CoinTelegraph, you can check it here:
https://cointelegraph.com/news/blockchain-for-president-how-it-can-disrupt-us-voting-machine
or read it below:
With the 2016 United States presidential election looming just over the horizon, some of us now turn our thoughts to the process by which we will make our voice heard on November 8th, the process by which we will cast our vote.
Weve heard at the close of the final presidential debate that voting is one of the honours and obligations of living in this great country, and as citizens, we want to feel that our vote is valuable. The question is, do we feel certain in the knowledge that our votes will matter? Is our government doing everything possible to ensure that this is the case?
2000, Drama in Florida
Back in 2000, the contested election between George W. Bush and Al Gore was plunged into a quagmire by the purportedly confusing nature of the ballot that citizens used to cast their votes. This resulted in the Bush v. Gore case that worked its way up to the Supreme court finally putting an end to the recounting of votes in Florida. As a millennial, I have some recollection of the drama that accompanying battle for Floridas electoral votes precipitated.
Having grown up in the age of the personal computer, I cant help but feel the method by which my fellow citizens were asked to register their preference for the leader of the free world is uncomfortably antiquated. Are these arcane conventions, like Congressional rulebook, inextricably entrenched or is it possible for us to do any better?
Close elections
Another arcane (shall we say byzantine?) system of transmitting valuable information is through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) founded in 1973. This juggernaut is in the process of being disrupted by Ripple Labs, one of the worlds most innovative, and most successful, [Suspicious link removed]panies. If Semantic Blockchain technology can potentially unseat SWIFT, which as of September 2010, linked more than 9,000 financial institutions in 209 countries, exchanging an average of over 15 mln messages per day, is it so implausible to suspect that a Blockchain might be able to disrupt the business model of voting machine manufacturers to bring more accountability to the hallowed task of recording the sentiment of Americas 146,311,000 registered voters?
In its most basic form, a Blockchain can be understood as a linked list which utilizes hash pointers to ensure that the record is appended only, that data once written cannot be modified or erased. More complex instantiations of Blockchain technology adopt many of the properties of the data structure that facilitates the Bitcoin cryptocurrency.
A data structure with such properties would doubtless have come in handy in the highly contested 1948 Democratic Party primary in the state of Texas. The race that pit the then Congressman Lyndon Baines Johnson and the acting governor Coke Stevenson against one another for the party nomination. The same race wherein Johnson claimed victory by a margin of 87 votes out of 988,295 cast, amidst rampant allegations of voter fraud. Its asserted prominently in the book Means of Ascent (1989) by Robert A. Caro that Johnson stole that election and in so doing, forever changed the course of the American history. The election having set the stage for Johnson to assume the presidency in 1963.
Civic engagement
The idea of preventing such miscarriages of voter preference by means of electronic voting has already been popularized in the Baltic nation of Estonia, where the 2007 Estonian parliamentary election was implemented by means of internet voting, a worldwide first.
Civic engagement in the United States is not nearly as robust as it could be especially among the millennial generation. Blockchain technology has already done much to shake up the global finance industry and inspire passionate young people to engage with the intricacies of payment processing, a hitherto lacklustre subject. Is Blockchain a potential impetus to increased participation in our democracy? The work going on at the Chamber of Digital Commerce under the leadership of Perianne Boring, advocating for this nascent technology will create the necessary space for the world and our nation to find out.
https://cointelegraph.com/news/blockchain-for-president-how-it-can-disrupt-us-voting-machine
or read it below:
With the 2016 United States presidential election looming just over the horizon, some of us now turn our thoughts to the process by which we will make our voice heard on November 8th, the process by which we will cast our vote.
Weve heard at the close of the final presidential debate that voting is one of the honours and obligations of living in this great country, and as citizens, we want to feel that our vote is valuable. The question is, do we feel certain in the knowledge that our votes will matter? Is our government doing everything possible to ensure that this is the case?
2000, Drama in Florida
Back in 2000, the contested election between George W. Bush and Al Gore was plunged into a quagmire by the purportedly confusing nature of the ballot that citizens used to cast their votes. This resulted in the Bush v. Gore case that worked its way up to the Supreme court finally putting an end to the recounting of votes in Florida. As a millennial, I have some recollection of the drama that accompanying battle for Floridas electoral votes precipitated.
Having grown up in the age of the personal computer, I cant help but feel the method by which my fellow citizens were asked to register their preference for the leader of the free world is uncomfortably antiquated. Are these arcane conventions, like Congressional rulebook, inextricably entrenched or is it possible for us to do any better?
Close elections
Another arcane (shall we say byzantine?) system of transmitting valuable information is through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) founded in 1973. This juggernaut is in the process of being disrupted by Ripple Labs, one of the worlds most innovative, and most successful, [Suspicious link removed]panies. If Semantic Blockchain technology can potentially unseat SWIFT, which as of September 2010, linked more than 9,000 financial institutions in 209 countries, exchanging an average of over 15 mln messages per day, is it so implausible to suspect that a Blockchain might be able to disrupt the business model of voting machine manufacturers to bring more accountability to the hallowed task of recording the sentiment of Americas 146,311,000 registered voters?
In its most basic form, a Blockchain can be understood as a linked list which utilizes hash pointers to ensure that the record is appended only, that data once written cannot be modified or erased. More complex instantiations of Blockchain technology adopt many of the properties of the data structure that facilitates the Bitcoin cryptocurrency.
A data structure with such properties would doubtless have come in handy in the highly contested 1948 Democratic Party primary in the state of Texas. The race that pit the then Congressman Lyndon Baines Johnson and the acting governor Coke Stevenson against one another for the party nomination. The same race wherein Johnson claimed victory by a margin of 87 votes out of 988,295 cast, amidst rampant allegations of voter fraud. Its asserted prominently in the book Means of Ascent (1989) by Robert A. Caro that Johnson stole that election and in so doing, forever changed the course of the American history. The election having set the stage for Johnson to assume the presidency in 1963.
Civic engagement
The idea of preventing such miscarriages of voter preference by means of electronic voting has already been popularized in the Baltic nation of Estonia, where the 2007 Estonian parliamentary election was implemented by means of internet voting, a worldwide first.
Civic engagement in the United States is not nearly as robust as it could be especially among the millennial generation. Blockchain technology has already done much to shake up the global finance industry and inspire passionate young people to engage with the intricacies of payment processing, a hitherto lacklustre subject. Is Blockchain a potential impetus to increased participation in our democracy? The work going on at the Chamber of Digital Commerce under the leadership of Perianne Boring, advocating for this nascent technology will create the necessary space for the world and our nation to find out.
I wrote a new piece for cointelegraph about how blockchain facilitates unique digital assets, which is where the real value proposition is.
I'm not really sure about how useful it would be for the music industry anymore- not really the best application scenario in my opinion- but nevertheless- I would of course be interested to know what you guys think of the piece.
Here it is.
I'm not really sure about how useful it would be for the music industry anymore- not really the best application scenario in my opinion- but nevertheless- I would of course be interested to know what you guys think of the piece.
Here it is.
but the example I made, when funds are transferred to a particular account on a particular blockchain, they are frozen there- in that one account- and the act of freezing them there is what gives you access to some proportional amount of value on another chain- until the time that you want to undo it, and you transfer them to some particular address on the 2nd chain to give you access back to you funds on the first chain- isn't that how it works?
that's the impression I got after reading those papers.
that's the impression I got after reading those papers.
for sure, but check out these sites:
https://proofofexistence.com/about
https://tierion.com/chainpoint
the way they talk about timestamping- what they said- it's not accurate.
the double spend scenario is explained here:
http://culubas.blogspot.de/2011/05/timejacking-bitcoin_802.html
https://proofofexistence.com/about
https://tierion.com/chainpoint
the way they talk about timestamping- what they said- it's not accurate.
the double spend scenario is explained here:
http://culubas.blogspot.de/2011/05/timejacking-bitcoin_802.html
ah, yeah- true.
I see it here:
What network hash rate results in a given difficulty?
The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks. At the desired rate of one block each 10 minutes, 2016 blocks would take exactly two weeks to find. If the previous 2016 blocks took more than two weeks to find, the difficulty is reduced. If they took less than two weeks, the difficulty is increased. The change in difficulty is in proportion to the amount of time over or under two weeks the previous 2016 blocks took to find.
my mistake.
anyway- thank you for pointing that out to me.
do you know where exactly in the code this function is calculated?
I see it here:
What network hash rate results in a given difficulty?
The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks. At the desired rate of one block each 10 minutes, 2016 blocks would take exactly two weeks to find. If the previous 2016 blocks took more than two weeks to find, the difficulty is reduced. If they took less than two weeks, the difficulty is increased. The change in difficulty is in proportion to the amount of time over or under two weeks the previous 2016 blocks took to find.
my mistake.
anyway- thank you for pointing that out to me.
do you know where exactly in the code this function is calculated?
When the government of Argentina says they're going to peg the peso to the US dollar that means that if you come and give them a peso they will give you a US dollar in return. That's a 1 way peg.
A 2 way peg would mean you could get a peso for a dollar in the US and you could get a dollar for a peso in Argentina.
With cryptocurrencies a peg can't function this way since there isn't any authority, such as a national government, who can make such a commitment.
So what are we talking about when we say 2 way peg?
According to my understanding it means that if you send an amount of BTC, let's say amount X to a particular address A, this address is associated with a different cryptocurrency, ETH for instance ,on blockchain B.
Then having sent X of BTC to A you will have some amount of ETH proportional to X on blockchain B, until you decide to reverse the peg and have your BTC insead of ETH. Is that how it works?
A 2 way peg would mean you could get a peso for a dollar in the US and you could get a dollar for a peso in Argentina.
With cryptocurrencies a peg can't function this way since there isn't any authority, such as a national government, who can make such a commitment.
So what are we talking about when we say 2 way peg?
According to my understanding it means that if you send an amount of BTC, let's say amount X to a particular address A, this address is associated with a different cryptocurrency, ETH for instance ,on blockchain B.
Then having sent X of BTC to A you will have some amount of ETH proportional to X on blockchain B, until you decide to reverse the peg and have your BTC insead of ETH. Is that how it works?
Here's an article I've written about timestamping in Bitcoin, the original one is here:
https://cointelegraph.com/news/timestamp-hacking-debunking-the-myth-of-precision-timestamps
but also the text is reproduced below:
Any carnival conjuror can attest that once an audience learns the science behind the way in which a trick is performed, the luster quickly fades. The eminent futurist Sir Arthur Charles Clarke is credited with the observation that any sufficiently advanced technology is indistinguishable from magic. Of late there is a profusion of hype in circulation about a seemingly magical data structure called a Blockchain.
Illusionists like Harry Houdini and his ilk can be a great source of entertainment, but when the trick involves a disappearing act on customer confidence, something is amiss. You might have heard that one of the properties a Blockchain possesses is the ability to prove certain data exists at a certain moment of time or that it somehow provides proof that some data existed at a specific time. The problem with these claims is that they are demonstrably false.
Look to the Blockchain
To prove this assertion we need look no further than the publically available Bitcoin Blockchain itself. Observe the sequence of blocks, and their associated timestamps, from 145044 to 145048.
145044: 2011-09-12 15:46:39
145045: 2011-09-12 16:05:07
145046: 2011-09-12 16:00:05 // Occurs about 5 minutes before the prior block
145047: 2011-09-12 15:53:36 // About 7 & about 12 minutes before 2 prior blocks
145048: 2011-09-12 16:04:06 // After 2 prior blocks but still before 145045
We see here that the timestamp of the blocks is not monotonically increasing. To understand why, its necessary for us to have a basic understanding of distributed computing systems, one of the elementary characteristics of which is the lack of a global clock. The time adjustment algorithm has even been called the most obvious possible weakness in the Bitcoin protocol.
Why don't the timestamps in the Blockchain always increase?
It would behove those interested in Blockchain timestamping to consult the Bitcoin wiki for a more informed understanding of how timestamping is applied in this system:
A timestamp is accepted as valid if it is greater than the median timestamp of the previous 11 blocks, and less than the network-adjusted time + 2 hours. "Network-adjusted time" is the median of the timestamps returned by all nodes connected to you.
Whenever a node connects to another node, it gets a UTC timestamp from it, and stores its offset from node-local UTC. The network-adjusted time is then the node-local UTC plus the median offset from all connected nodes. Network time is never adjusted more than 70 minutes from local system time, however.
This implies an inherent margin of imprecision. When considering allowances made for anomalies such as daylight savings time and the potential for attacks against the network by malicious actors we quickly see that we need a more nuanced understanding of what timestamping in a Blockchain actually implies. And what it does not.
Timestamp hacking
One reason that certain parties have an interest in knowingly contributing false timestamps to the network involves the way rewards are distributed according to the Bitcoin protocol. The difficulty of the cryptographic puzzle that miners are attempting to solve is configured to readjust its difficulty every 10 minutes. If miners can fake their timestamps they can make it appear that the network is less powerful than in fact it really is, thus making the puzzle easier and potentially generating higher returns. Additional incentives include denial-of-service attacks against target nodes and in extraordinary cases even double-spend attacks.
Land Before Time
When one really starts to consider the meaning of time the subject quickly becomes philosophical. Spacetime describes a mathematical model that combines space and time into a single interwoven continuum based on the theories of special and general relativity first discovered by Albert Einstein. For purposes of time telling in our daily lives we seldom need to grapple with such principles.
Provided one has access to a Blockchain of mauve which possesses sufficient RAM, there are some truly impressive applications this technology can support. For better or worse, precision timestamping is not one of them.
https://cointelegraph.com/news/timestamp-hacking-debunking-the-myth-of-precision-timestamps
but also the text is reproduced below:
Any carnival conjuror can attest that once an audience learns the science behind the way in which a trick is performed, the luster quickly fades. The eminent futurist Sir Arthur Charles Clarke is credited with the observation that any sufficiently advanced technology is indistinguishable from magic. Of late there is a profusion of hype in circulation about a seemingly magical data structure called a Blockchain.
Illusionists like Harry Houdini and his ilk can be a great source of entertainment, but when the trick involves a disappearing act on customer confidence, something is amiss. You might have heard that one of the properties a Blockchain possesses is the ability to prove certain data exists at a certain moment of time or that it somehow provides proof that some data existed at a specific time. The problem with these claims is that they are demonstrably false.
Look to the Blockchain
To prove this assertion we need look no further than the publically available Bitcoin Blockchain itself. Observe the sequence of blocks, and their associated timestamps, from 145044 to 145048.
145044: 2011-09-12 15:46:39
145045: 2011-09-12 16:05:07
145046: 2011-09-12 16:00:05 // Occurs about 5 minutes before the prior block
145047: 2011-09-12 15:53:36 // About 7 & about 12 minutes before 2 prior blocks
145048: 2011-09-12 16:04:06 // After 2 prior blocks but still before 145045
We see here that the timestamp of the blocks is not monotonically increasing. To understand why, its necessary for us to have a basic understanding of distributed computing systems, one of the elementary characteristics of which is the lack of a global clock. The time adjustment algorithm has even been called the most obvious possible weakness in the Bitcoin protocol.
Why don't the timestamps in the Blockchain always increase?
It would behove those interested in Blockchain timestamping to consult the Bitcoin wiki for a more informed understanding of how timestamping is applied in this system:
A timestamp is accepted as valid if it is greater than the median timestamp of the previous 11 blocks, and less than the network-adjusted time + 2 hours. "Network-adjusted time" is the median of the timestamps returned by all nodes connected to you.
Whenever a node connects to another node, it gets a UTC timestamp from it, and stores its offset from node-local UTC. The network-adjusted time is then the node-local UTC plus the median offset from all connected nodes. Network time is never adjusted more than 70 minutes from local system time, however.
This implies an inherent margin of imprecision. When considering allowances made for anomalies such as daylight savings time and the potential for attacks against the network by malicious actors we quickly see that we need a more nuanced understanding of what timestamping in a Blockchain actually implies. And what it does not.
Timestamp hacking
One reason that certain parties have an interest in knowingly contributing false timestamps to the network involves the way rewards are distributed according to the Bitcoin protocol. The difficulty of the cryptographic puzzle that miners are attempting to solve is configured to readjust its difficulty every 10 minutes. If miners can fake their timestamps they can make it appear that the network is less powerful than in fact it really is, thus making the puzzle easier and potentially generating higher returns. Additional incentives include denial-of-service attacks against target nodes and in extraordinary cases even double-spend attacks.
Land Before Time
When one really starts to consider the meaning of time the subject quickly becomes philosophical. Spacetime describes a mathematical model that combines space and time into a single interwoven continuum based on the theories of special and general relativity first discovered by Albert Einstein. For purposes of time telling in our daily lives we seldom need to grapple with such principles.
Provided one has access to a Blockchain of mauve which possesses sufficient RAM, there are some truly impressive applications this technology can support. For better or worse, precision timestamping is not one of them.
To use your example, even USD in my pocket is more valuable than USD in paypal.
That's how paypal makes money- for instance- if I sell a product on eBay paypal always keeps the money due to me for about a week- for "processing" or w/e- during this time they invest it and make money on the float.
The difference between liquid dollars in my pocket and money locked up in paypal is not deterministic or fixed- the relative values fluctuate. The money locked up in paypal is analogous to a fixed time certificate of deposit, that's what I was saying in the original post.
I'm not sure what you mean by "no guaranteed exchange".
I disagree with the assertion that "the only source of value difference between coins in the two networks is the friction related to the technical operation of the peg".
One could make the argument that another important source of value difference is the degree to which people are willing to hold either currency.
Think about the recent trouble with Ethereum. If I created a peg while the Ethereum price was high, pegging BTC to Ethereum at the pre-DAO rate, I would take a hit and loose money if we undid the peg after the precipitous drop in Ethereum value- isn't that correct?
That's how paypal makes money- for instance- if I sell a product on eBay paypal always keeps the money due to me for about a week- for "processing" or w/e- during this time they invest it and make money on the float.
The difference between liquid dollars in my pocket and money locked up in paypal is not deterministic or fixed- the relative values fluctuate. The money locked up in paypal is analogous to a fixed time certificate of deposit, that's what I was saying in the original post.
I'm not sure what you mean by "no guaranteed exchange".
I disagree with the assertion that "the only source of value difference between coins in the two networks is the friction related to the technical operation of the peg".
One could make the argument that another important source of value difference is the degree to which people are willing to hold either currency.
Think about the recent trouble with Ethereum. If I created a peg while the Ethereum price was high, pegging BTC to Ethereum at the pre-DAO rate, I would take a hit and loose money if we undid the peg after the precipitous drop in Ethereum value- isn't that correct?