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48 next week, after a divorce starting from the bottom again. Is FIRE possible?
As the title says, my divorce came through about 2 weeks ago and I am starting from the bottom rung again. I haven't got any property, and my assets are limited. What prompted me to grab this with both hands is that around that time my eldest daughter gave birth to my first grandchild so it's helped me to focus on the future. I currently live with my parents, as during the week I work away from home and have a rented property near my work. It's nearly 2 hours away from home so commuting isn't an option (plus the client pays an accommodation allowance so not all bad). I do plan to buy a house within the next 5 or so years so that's my short term goal but whilst I don't need to I'm building up my assets. I've been earning average income for the past few years (about £33k). During my marriage I was very limited to what I could do money wise. The wife would rarely contribute to household expenses, and would spend rather than save. I tried to get better paying jobs, but security was preferred over higher income. What little money I had left over I tried to save, but more often than not had to liquidate any investments in order to pay for essentials - like a car repair or replacement washing machine etc. We rented, as neither of us were in a good enough place financially to get a mortgage. Now, as I'm not having to answer to her and being free to do what I want (within reason, we have a 11 year old daughter) I'm in a job earning double what I got in my previous position. Although I'm a contractor, I'm needed for the length of the project which is at least the next 2 years so I'm taking advantage of the boost in income. And thankfully during the lockdown they still paid me, as it would cost too much to get a replacement in if I did leave. For the last year my priority was paying off debts, I still have some (about 10k) but much more manageable than they were this time last year. I could pay everything off in the next 6 months, but I think it's time I started preparing for the future. The way I see it, if I lost my job in a month I'd have no debts but limited or no resources to feed myself. But if I start following more of the FIRE philosophies I'll at least have covered expenses for a few months if the worst happened. I've been a follower of MMM for a few years, haven't always agreed with what he says on some subjects (Cryptocurrency for instance) but I feel I'm ready to start putting FIRE into practice. The two things I'm looking to concentrate on right now are emergency expenses and investing. What I have in place right now is a Moneybox S&S ISA which I intend to use for emergency expenses. For those not familiar with Moneybox it rounds up the pennies for expenses in the bank account to whole pounds. As well as this I do a weekly top up and a payday top up. Approximately £150-200 per month, current value around £600. I also tried to invest in the FTSE 100 with the spare change I had, and used a Halifax Sharebuilder. I put in around £30 per month and each month picked a new share from the FTSE 100. I'm about £960 in and probably about a third of the way through the FTSE100. Thinking about it I should have invested in a tracker fund, but hey, it's been in place for a few years and it's made me put money aside so not all bad. Right now most of it is red, but I put that down to the current economic climate and I'm in it for the long haul so at the moment it doesn't matter. I've dabbled in Cryptocurrency. I work in IT and I've always been very much of a geek, so it comes with the territory. Mostly proof of stake coins, but early in the process more 'traditional' proof of work coins such as Bitcoin and Litecoin. Somewhere I do have a few hundred Bitcoin but can I find the seed phrase I wrote down? If only I'd emailed it to myself! I'm a lot more organised these days, and probably hold £2500 in a mix of different coins. I monitor the price weekly and react if I see a trend but mostly leave this untouched. I also have some premium bonds. Probably around £500. I only started collecting them last year, so far no winnings but again I'm in it for the long haul so I'm looking at the average returns. If it makes me my million then so be it, if it doesn't win anything at all then I'll revisit it but I see it as something I can quickly liquidate if I need the money. If I had to liquidate everything tomorrow, I could probably support myself for 3 months. I want this to be at least 6 months, the end goal to cover potentially 30 or more years of retirement. My budget does have some things I can't avoid, such as paying rent twice (a token amount at home but market rates for work, probably around 1000 in total). The accommodation allowance mentioned above is sufficient to cover the away from home element and more. There's feeding myself, a couple of streaming services and Xbox Live (essential for my mental health when in a 1 bed flat during the work week), car expenses (I have a Skoda Octavia and regularly exceed 50mpg, 70+ on A roads) and the finance and associated fuel and insurance costs for that, and some ad-hoc expenses as they arise such as clothing. Overall I could live on 60% of my salary, the more debt I pay off the better that gets. What's helped here is my obsession with Excel - I monitor everything. I go through bank transactions and enter every penny into a budget planner, so I know where I am. And those budget figures I use in YNAB to keep a day to day eye on how I'm doing, so far it's been quite accurate at predicting what's coming out and when. I know it's going to be difficult, starting so late. But has anybody else been as late to the party as me, and if so how was it for you? Any tips? I'm happy to elaborate on any of the above if I need to.
MKR Holder DAI-gest: Week 17, 2020: Action Required: The State of the Peg
Action Required: The State of the Peg
MKR Holder DAI-gest: Week 17, 2020
Governance Recap April 23, 2020
![Imgur](https://i.imgur.com/Jg3loyp.gifv) MKR Holder DAI-gest is a weekly Maker governance recap that is written by the community for the community. The best source of Maker Community information is through active participation and engagement. This supplemental publication strives to present all relevant facts and remain free of editorial opinion (Big 3 takeaway excepted). The statements made herein are not the opinions or statements of the Maker Foundation. DAI-gest is Now Available on Amazon Alexa as a Skill. You can enable it at https://skills-store.amazon.com/deeplink/dp/B087NH82D1?deviceType=app&share&refSuffix=ss_copy for all of your Alexa compatible devices. Then say, "Alexa, Open Maker Governance Digest" and you'll hear the latest issue. Coming soon to Itunes. Subscribe to MKR Holder's DAI-gest on Substack - Free Corrections / Comments / Suggestions / Other: @adrianhacker-pdx in the Official Maker Forums or [email protected]
Big 3 Take-Aways for the Week:
Understanding the MIPS framework that is being proposed right now is essential. It is a lot of information to sort through, so take it in small pieces if that will help you to focus and retain the information. Here is a link to an indexed list of all the MIPS (outside the forum). It is the entire framework of an introductory governance framework and collateral on-boarding procedures. You will find the MIP number, title, and sentence summary with a link to the forum discussion. See below for two additional sub-proposals added to MIPS 0 through 12.
The state of the peg has caused concern within and without the MakerDAO community. Some of the larger Maker holders stepped forward and posted their concerns around the state of the peg directly in the Maker forum. This spurred a lot of momentum in the platform, discussed further in this issue.
Intention to implementation. The DAO is getting very busy, and thought needs to be given to determining the feasibility of proposals, getting buy-in, and recruiting the appropriate skill sets in the community. Timing is key. The DAO is in need of a project management framework that is effortless and easily integrated into the current systems.
Dispositioned Governance Agenda
LongForWisdom is proposed, second governance facilitator. He said "Yes!".
Wrapped BTC has been proposed for collateral on-boarding.
USDC Risk parameter adjustment and on-boarding additional stable coins such as PAX and TUSD.
On-boarding LINK as a new collateral type.
Self-sustaining DAO: MIPS 0 - 12 - Ratification timeline and two additional sub-proposals have been shared in the forum.
Urgent - State of the Peg - Getting DAI back on soft-peg to a Dollar after it has been trading high following black Thursday.
SCD shutdown going to Executive Vote on April 24, 2020, three-week delay to follow for a final shutdown date of May 12, 2020.
Zero bid auction post mortem data evaluation - Maker Man currently completing the data analytics from black Thursday. This part is moving behind the scenes. A report is forthcoming in the next several weeks.
Public relations consortium - Communication team to create consistent and representative communications on behalf of the DAO and to report meaningful ecosystem sentiment back to the governance community. The team has been having weekly meetings, a first report is due by the end of the month.
Governance vote cadence - the timing for which executive voting happened for certain parameters. This may be overridden by the MIPS governance cycle.
Compensating Zero Bid Vault Owners. The poll was affirmative to compensate vault holders. Currently waiting on data analytics from Maker Man before restarting in another thread.
DeFi Emergency shutdown consortium
Dark fix - "
Flip / Flop auction usability
Maker token authority
Precedent for on-chain polling. Signaling started to determine the governance community's feelings about having foundation member proposals require on-chain polling. The forum thread seems to have died.
GSM delay - raise the delay from 4 hours to 12 hours for enacting Executive Votes, as a safety precaution.- Ratified
MKR Debt Auctions - Completed successfully
Deep dive into collateral on-boarding - Presentation to community completed, see forum for the movement
Governance cycle: MIPS 3 Presented in G and R Call - Presentation completed, see forum for the movement
Since the Black Thursday event of March 12, 2020, DAI has consistently been trading above the one Dollar price soft-peg it is supposed to maintain. Sometimes grossly over peg by over ten cents. In recent weeks it has been slowly trending back to a Dollar but has not quite gotten there. Confidence has not yet fully returned regarding the recent market volatility. Also, people are holding on to stable coins due to market fears. This has caused a serious lack of DAI liquidity, creating high demand, and affecting the peg. Prices this last week ranged from one to two cents above peg. Paraficapital, a larger corporate Maker holder in the governance community posted their concerns in the forum and related the sentiment of worry in the ecosystem regarding DAI being off the peg. This brought about immediate discussion and action regarding monetary policy and collateral on-boarding. The most recent passed Executive Vote contains monetary policy to make minting DAI more lucrative from USDC. Also, some exciting new collateral types are being considered for use in the MakerDAO platform. More on that next...
WBTC as a new collateral type?
WBTC also is known as wrapped Bitcoin is currently being evaluated by the Maker governance community to be on-boarded as approved vault collateral. Wrapped Bitcoin is Bitcoin that is held by the WBTC DAO and then tokenized 1:1 on the Ethereum (ERC-20) blockchain. Bitcoin on the Ethereum blockchain you ask!? It's already here, you can trade it on the https://Oasis.app . Many players in the DeFi ecosystem are excited about this step. Bitcoin is the most popular and most valuable cryptocurrency. While there is a small amount of WBTC use on current DeFi platforms, it was stated that people have been waiting for Maker to adopt WBTC as a collateral type. It was also said that using WBTC as ERC-20 collateral is the primary use case for ERC-20 Bitcoin. Forum links are listed below for this subject.
Other Collateral Considerations
In addition to WBTC, LINK is being considered for on-boarding as approved vault collateral as well as additional stable coins such as PAX and TUSD. All of these collateral options are hoped to help bring back sufficient DAI liquidity and help return the DAI price peg to exactly one Dollar. Again, see below for the forum links regarding these new collateral types.
MIPS 0 - 12 Due for Initial Polling; if Passed Moving on to Executive Vote
MIPS 0 through 12 has been a high focus subject in the governance community for the last few weeks. These are the first documents that spell out a governance and collateral on-boarding framework for a self-sufficient DAO. This is the beginning of the two to three-year process of handing full control of MakerDAO to the governance community and dissolving the foundation. The very nice flow chart below shows the two possible scenarios for approval or rejection of these MIPS in the Timing Governance Poll. Forum links can be found below for further information. ![MIP Implementation Timeline](https://i.imgur.com/sny6rOf.png)
Single Collateral DAI shutdown is very close. An Executive Vote for shutting down SCD is supposed to be posted on or shortly after April 24, 2020. There will then be a 3-week delay for shutting down. This will give time for people to close out their vaults, and hopefully drain the migration contract. Stability fees are going to be set to zero to incentivize the closing of vaults. If you are still holding SAI as of the time it shuts down, you should be able to redeem your SAI for ETH via the migration portal at https://migrate.makerdao.com
Here is a guide from MakerDAO about becoming involved in Governance. The meeting is held every Thursday, 17:00 UTC. During the postmortem and corrective action phase of the recent crypto market prices and resulting fiasco there has been a daily call. This is expected to drop to two calls over the next week. Please check the forums for information related to ad-hoc governance and risk calls that may be happening. Governance and Risk Meeting Community Guide * Understand the issues that are discussed and governance themes that get explored to build a healthy, secure, Maker Platform. * Get info on how to connect by phone or webcam. * Explore meeting archives.
The IOTA project seems like a huge and potentially ground-breaking technology but it is quite evidently a huge undertaking. This should be apparent from the fact the idea has been discussed and developed for around 6 years now. I just thought I would open a discussion about potential risks that the IOTA project faces and see whether people know how these risks have or could be mitigated:
Right now there are numerous crypto projects that are working on similar technology. Yes, they all have their specifics but the question is, which one might obsolesce the other? Who will come out ahead? This will be a result of many factors such as budget, marketing and technical specifics such as scope, programming languages used and adoption from businesses and the wider community. As I see it, IOTA do have a solid base in that some large companies are adopting the technology and this will have a "top-down" effect where smaller entities will need to use their protocol to integrate with these businesses. On the other hand, could IOTA be as ubiquitous as hoped in the finance industry given that there are solutions already out there (such as Ripple) which are specifically targeting this market? Why would anyone be compelled to use an alternative solution if another has already gained a significant foothold - especially since each month spent developing leaves the other technology to solidify itself?
Running out of funding
This item has been raised before in this forum but I wasn't sure if there was a definitive answer. This project would be requiring a huge sum of money to execute. As I understand, some (all?) of the participants are happy to be paid in IOTAs, but how long will this funding last? How many developers can they hire to execute on all the development that is required? Is it dependent on the IOTA price remaining at a certain USD price? And what is the plan if funding pool dries out?
Time to market
As much as IOTA is an awe-inspiring vision of the future, it's not always the vision that plays out and it's not always the best solution that wins. This is often a factor of the right timing. It's great that IOTA have insisted that all products are not going to roll out "half baked" but how might this approach differ from projects which are pumping out live systems and letting people play with it? Sure there are issues, but at the same time they are found earlier in the game and it also serves the purpose of engaging and building a community. There have been many instances in the technology realm where the best technology didn't win - it was the one first to market and then added all the nice-to-haves later on. Could it be that there is already a standard in existence or is the market still fluid right now?
A lot of the popularity of Bitcoin came from the fact it was a "people's coin". It was open-source and therefore anyone could participate by building, experimenting and using the system. Later on, there was a real economic incentive to participate by mining coins. In addition, Bitcoin found its place on the dark-web which also accelerated its adoption and resulted in much publicity in mainstream media, driving people's curiosity and imagination. On the other hand, IOTA is a much more centralized model - at least in terms of the building of the protocol specification. In my mind, this is probably the only way it could be done knowing the complete farce that the Bitcoin project turned into with forks and on-going infighting. That said, what is the compelling reason that everyday people will decide to use IOTA? My main answer to this is that it is fee-less, however there are similar projects who are open-source and "grass roots". Sure they don't have all the potential, but as I see it, community adoption is critical and the technology can always be expanded (see point #3 on time-to-market).
Communication and marketing
The communication on the IOTA project seems to be done in a different fashion to other projects. It seems to involve a tight circle of discussion which is then re-posted on general forums such as Reddit and Twitter so the general community knows about it. Dom and David seem to be doing an amazing job speaking with large industry players, however. CfB is the technical guru and seems to be silencing the technical doubters (not always answering, but silencing ;). The only concern for me is that information is currently hard to sift through. It seems that people are left to speculate about how the project is progressing and relies on a lot of faith that the project is going to plan. If an individual asks about a certain aspect of the project, most people will answer with a screenshot from a conversation and/or allude to some ad-hoc comment that was made somewhere on social media. Reading the sentiment from non-IOTA users, their first feedback is about the lack of transparency on what exactly is going on. Qubic, for example, is a great idea, but how much code has been written? Is there some sort of project timeline? When can I try it out? The amount of hype leading up to this announcement was great marketing IMO, however the effect has to be waning after similar build-ups of Data Marketplace ("Microsoft"), allusions to JINN being market-changing and so forth. It seems to be creating a shot of interest in the project, however what happens if the actual impact of all these developments from a global perspective are just that: hype? This of course can cause uncertainty and a loss of adoption from regular users (see point #4 Community buy-in) - some people might be compelled to work on other cutting edge projects citing that the crypto industry is not short of people saying their coin is the best thing ever. Of course, with many copy-cats around some of these secrecy is undoubtedly warranted, however I'm sure the quality of communication could improve without giving away any trade secrets. A general set of milestones and timelines (that could be revised) would surely improve the perception that people have about the project. Feel free to add/comment - maybe it will inspire some unanswered questions for the next AMA ;)
A perspective from the Bitcoin Cash and Bitcoin Unlimited developer who discovered CVE-2018–17144. That is about the time that Matt Corallo wanted to shave off of block validation with his pull request in 2016 to Bitcoin Core. 600µs is a lot less than what is saved with more efficient block propagation, like XThin, Compact Blocks, or now Graphene over typical links, especially those that are of similar low-end quality in network speed like Raspberry Pis are in compute speed. An optimization that was not in the focus by Core until XThin from Bitcoin Unlimited came onto the scene and kicked the Core team into gear on this issue. Furthermore, 600 microseconds is an order of magnitude or more below the variance between node validation speeds from a Raspberry Pi to a more high-end miner node and thus wholly in the range that the network already deals with. This 600 microsecond optimization now resulted in CVE-2018–17144. Certainly the most catastrophic bug in recent years, and certainly one of the most catastrophic bugs in Bitcoin ever. This bug was initially suspected to potentially cause inflation, was reported because it led to reliable crashes and confirmed by closer analysis… to be actually allowing inflation! I have consistently and repeatedly criticized hubris and arrogance in the most prominent Core developers, and done so since 2013, when the bullshitting around the 1MB block size limit started. Here we have an optimization that talks about avoiding “duplicate” validation like validation is nothing to worry about, an afterthought in Bitcoin almost. And a change that is quickly found to be good in peer reviewed, ACKed in Core-speak, in a rubber-stamp-like manner by Core developers such as Gregory Maxwell. Developers which I fully respect for their intelligence and knowledge by the way, but still, well, dislike as much for their overblown egos and underhanded discussion style as well as having done all they can to handicap Bitcoin with the 1MB limit. I also have to be honest, this change creates an unavoidable element of suspicion in me. For anyone who knows what went down and what the code paths do, it is just unavoidable to have this thought here. I like to qualify that this is not what I assert nor think is happening, but definitely crosses my mind as a potentiality! Because what is better to destroy the value of Bitcoin in the public’s eye than a silent inflation bug? What is better than creating code paths that look harmless for themselves but combined with some other, seemingly harmless rework in other areas of the code, result in utter catastrophe? And it looks like CVE-2018–17144 would eventually have become exactly this. The only thing that saved Core is their effective client diversity between revisions and someone actually noticing that there is a problem. After two years of this bug sitting around idle and exploitable. Client diversity that has been much criticized on the Bitcoin Cash side of things, but it obviously shows its advantages now. Reading the title of the original PR: “Remove duplicatable duplicate-input check from CheckTransaction” , as well as the message therein: “Benchmark results indicate this saves about 0.5–0.7ms during CheckBlock.” almost reads like it could be a sick joke being played on us all now. I always feared that someone from the bankster circles, someone injected into the Bitcoin development circles with the sole goal of wreaking unsalvageable havoc, would do exactly what happened. Injecting a silent inflation bug. Because that is what would destroy one of the very core advantages that Bitcoin has over the current status quo. That of transparency and a verifiable money supply. And, even though as a Bitcoin/BCHer, I do not see true long term prospects in Bitcoin/BTC anymore, calling the whole foundation of crypto into question just like that would have been equally disastrous to “our” variant of Bitcoin. Now, again, I am definitely not saying this is the case with PR 9049 for sure. I actually think the explanation of a young, cocky Core developer, a new “master of the universe” wreaking havoc by sheer arrogance and hubris, is the more likely explanation. People in general, but I don’t even exclude myself here, tend to believe in the competence of others if they appear just self-assured enough. This is part of the problem with attitude and psychological dynamics in this space. It creates a dangerous aura of ‘these guys know what they are doing’. I myself have done some minor work on sensitive areas in the Bitcoin Unlimited implementation. And I am working on some more “consensus critical” code for BCH now (see below). And, yes, I sometimes do lose some sleep over what could go wrong. I know I make mistakes. I have done so. I will. We all do. But I have yet to see anything resembling an admission of being imperfect by the developer in question, or any other prominent Core developer for that matter. The folks in question know exactly who I mean. There must be more reasonable folks in Core, but they are rather silent. Much worse even: In the discussion on github that follows this PR, user freetrader (a well known anonymous but still respected member of the Bitcoin Cash community who helped to create the Bitcoin Cash initial fork) asks the very valid question: Which is answered in the, all-too-typical for Core, smug manner by Matt Corallo, notably the original author of the bug who has all reason to be a bit more careful and respectful: The bug was disclosed in an absolutely responsible manner. As even the full disclosure on bitcoincore.org’s own pages notices, it went to a set of trustworthy people by the person who found the bug and did so in an encrypted PGP message only. This leaves the question why Core recklessly endangered the security of Bitcoin Cash as well endangering the myriad of altcoins that are out there and still susceptible with this premature and hasty publication. The back references from altcoins merging the change trickling into PR #14247 are a glimpse into this process. Now, Matt talks about “running out of time” in the above reply. But what time is that exactly? If you think hard about this, this can only be a distrust in any of the informed parties that they’ll leak this secret prematurely and thus catch Bitcoin Core with their pants down, or as a worse assumption, be actually exploited by one of the informed parties against BTC. Bitcoin Unlimited was ferociously attacked, presumably by deranged BTC supporters from the wider ‘community’, when it had a bug. And it seems a bit like Core members assumed a payback by deranged BCH supporters in kind here (I am not doubting those supporters exist), given the hints in the original disclosure that this bug has actually been discovered by someone aligned with the Bitcoin Cash side of things. But not only that, Core seems to have assumed that members on the BCH side of things who have been informed are deranged or at least irresponsible enough to leak this info to the wrong parties! I like to applaud deadalnix and the ABC team for what I was thinking the Core team should have done here as well: Bury the fix in a bit more and unrelated refactoring code so as to fix it but also to buy some more time for an upgrade. Maybe Core wasn’t creative enough to see a way to hide the problem, but then they also had no reason to blare it out like they did here. This was very irresponsible, and, and this should reach any altcoin impacted by this, this is definitely solely Bitcoin Core’s responsibility. No one else said anything in public before Core published their PR. It should also be noted by the Core team that this creates a strong disincentive to keep them in the loop with initial disclosure for anyone finding a bug. Cory Fields has talked about the risks and dangers with regards to sitting on the knowledge of a 0-day on Bitcoin Cash, and this bug discussed herein is one that was worth at least 10x more in potential damage and thus also shorting value and angry deranged people (a.k.a. “31337 crypto trading bros”) capable of violence. If a party behaves this irresponsibly, it shouldn’t be surprised if it degrades itself to a lower position in the food chain with regards to vulnerability disclosures. I am not saying I won’t inform next time I might stumble upon something, but this is not a good way to create the necessary trust. The Discovery and Disclosure Sitting in my little van by the sea on Monday, I was working on getting the new CHECKDATASIG/-VERIFY opcodes that are about to activate for Bitcoin (Cash) in November implemented on the Bitcoin Unlimited client. I have been looking at a potentially neat use case for those and am motivated to get this done. Around noon, I noticed that there is a lot of divergence in the way that signature operations counting was done in ABC vs. how it was done in Bitcoin Unlimited (BU). I agreed earlier with the BU team that I would go and port most of the CDS/-V stuff over from ABC, but I felt overwhelmed. My thoughts were that: Ok, this is doable, but this needs a lot more analysis and also many more eyeballs for review. And will take a lot longer. Sigh. While doing so, I stumbled upon this comment in the ABC code base: Check for duplicate inputs — note that this check is slow so we skip it in CheckBlock My initial reaction was a slight “Eh, WTF is going on with that comment?”. And then I looked up uses of CheckRegularTransaction in ABC, which is the renamed variant of CheckTransaction in Core (but I didn’t know at that time). I dug through the code to try to understand the logic. I noticed that block validation skips this test as it is assumed to have already happen during mempool ingress. My next thought was a bit of a sinking feeling and a “Uh-oh, I really hope the folks from ABC have thought about the difference between the mempool and block transmission and that those are distinct ways into the system. There might be a problem here!”. And then I went and thought about a way to test this. I patched an ABC node to not relay transactions even when asked and connected one unpatched and one patched node together in -regtest mode and created a transaction with a duplicate input (which the above test was skipping). Wham! assert(), Aborted. Next thought was along the lines: “Oh fuck, this doesn’t look good, gotta notify deadalnix and the crew what is lurking in ABC, this doesn’t look good at all. [email protected]#%!!”. Being aware of the danger that this could maybe be further exploited towards an actual inflation and chain-splitting bug (but I didn’t further check the specifics of this, as a node crash bug with assert() failure was already enough to be worried about), I quickly and somewhat inaccurately noted to myself (and timestamped): BitcoinABC does not check for duplicate inputs when processing a block, only when inserting a transaction into the mempool. This is dangerous as blocks can be generated with duplicate transactions and then sent through e.g. compact block missing transactions and avoid hitting the mempool, creating money out of thin air. awemany [Footnote: I timestamped this message in the BU slack, adding an innocuous situational lie of ‘Ooops, wrong channel’ to it. I also tried timestamping my findings on on my usual go-to site originstamp.org but they only submit timestamps every 24h due to the fees on Bitcoin being too high to do more often… I guess I should maybe get into the habit of doing timestamping transactions myself..] Opening up a disclosure email to deadalnix, I started to have a thought of: “Ok, actually, where is this stuff coming from, when and where did they introduce it into the code, might we be lucky and this is not in a release yet?” And then I noticed that this stuff was coming from Core. Already having written a disclosure report, I rechecked whether Core was vulnerable as well. And, once again: Wham! assert(), Aborted. I started to get shivers up my spine. Uh oh! Core has a crash bug, potentially worse. Stuff in the code since 2016. NOT good. NOT good at all. I like to say here that I actually had a feeling of this is bad, not this is good because of Core vs. Cash or something like that. I (unfortunately) still own a (for my poor soul significant) amount of BTC and for that reason and others do not like having bugs in Core either. Being a responsible citizen in this space, I then wrote the encrypted disclosure email to Wladimir, sickpig and some others, attaching a variant of the ABC and the Core patch to exploit this problem to my disclosure. I also put in a BCH address for a bounty payment to myself into that email (disclosed as proof below), as I feel this should be something worth a little performance bonus 🙂 No money has been received at the time of this writing yet. If you want to change this, you can send me BCH here: bitcoincash:qr5yuq3q40u7mxwqz6xvamkfj8tg45wyus7fhqzug5 (1NBKDco2EctDXvBv6r4hqJRPWfgX9jFpqs) I chose the handle beardnboobies as this is the first thing that came into my mind when I thought about this very discovery here. I thought: Ok, I am slowly becoming a pale nerd working on just code, with beard and manboobies. Oh well. I have noticed that this handle was — for whatever reason- taken out of the release notes that are checked into the main development branch of Bitcoin Core and is only available in the release branch / tag, being replaced with anonymous contributor on the main branch. I wonder: Do you Core guys feel this is too unprofessional to have this pseudonym appear in the main branch? Have some humor please! 🙂 By the way, a plea: I urge everyone in BCH as well as BTC (as well as impacted altcoins), to take a fine-toothed comb through the code with the goal of looking for similar issues! More specifically, I faintly remember (though might be wrong) from discussions back with Core devs on reddit in 2016 and before, that the idea that there’s a lot of “duplicate validation” between mempool and block validation was kind of en vogue back then. Potentially more code is vulnerable because it assumes that mempool validation can stand in for block validation. I suspect more, though maybe not as grave bugs, in this area. Reactions After I submitted it, I felt relief and then I started to watch the space from the back. A weird situation. Only then I also fully realized what Core contributor Cory Fields described with a bit of a different angle and on a smaller scale, the weirdness of having found a bug that you know is worth millions at least, massively impacting a $100 billion currency. The fact that I could have gone and rented hash power and shorted BTC and exploited this. But also the fact that I did not! Wladimir eventually wrote me an email that they’re preparing releases (and at that time or around it they published the PR), so I responded expressing my astonishment of the quite public handling of this serious issue. What I was amazed by in general was the long time it took for the bug to blow up to its full proportions, with the process seemingly even not over now. One thing is certainly others digging into this and realizing the full severity of this — as it turns out, yes it CAN be used to double-spend and inflate on BTC after all! — but also the time it takes from the initial PR being public, seemingly not noticed at all and the first media article being written. And then I noticed the usual spin. The “stupid BCashers can’t code and are irresponsible and what not” angle that is all too often repeated then by seemingly cerebrally insufficient Core supporters. I quote the below to gloat maybe. But also to show the world WHAT kind of bullshit the Bitcoin Cash side of things is facing here in a constant barrage. This is just from a few of the more prominent Core supporters and devs. There is, of course, a lot more folks foaming “btrash, bcash” at the mouth on reddit and twitter. Tone Vays and Jimmy Song Here we have Tone Vays, who likes to pose with the undercurrent of violence by wielding weapons on Twitter and apparently also on Youtube, discussing this bug with Jimmy Song in an unwillingly hilarious Youtube video: Luke-Jr I like to say some words about this tweet of Luke-Jr, committing the sin of bearing false witness about us irresponsible “BCashers”… I suspect Luke-Jr has been left in the dark about the background of this disclosure as well, not belonging to the innermost circles either. Careful observers might have noticed even more of this dynamic happening with other people. And note again: I have done everything that is necessary to make this a responsible disclosure. The initial, unobfuscated public disclosure happened by Bitcoin Core on their github! This is exactly the opposite situation compared to what Luke-Jr is describing. This is despicable. From:Luke-Jr Closing remarks Apart from pointing out the insane spin of some Core supporters in the preceding part, I simply want to take the opportunity now to urge caution for everyone here. Bugs lurk everywhere. Everyone is imperfect. Myself included, of course. I started to like Jihan Wu’s credo of “Don’t play hatred, don’t wish competing coins ill. Just wish and try to make BCH better” (from twitter) and see BCH and BTC in fierce but still civil competition. Civil competition obviously meaning no violence, including no violence like attacking each other’s nodes. I like to reiterate that, despite the gloating and strong words you might find in this article, I did everything to play fair. I also agree in general with Cory Fields from Core that it is not very easy to find the necessary disclosure addresses and information. He’s right about the lack of easily accessible GPG keys both on the BCH as well as — I like to add- on the BTC side of things. I didn’t find a non-retracted key of Pieter Wuille in time. I also like to note that a few things went finally completely out of the window here with this bug, for example Core’s idea of ‘the code being law’. If the code is law, does that mean that you have to accept inflation now? Or is it actually the Core devs steering the ship? Is an element of reasonableness entering the space? And yes, I sincerely believe, despite the current price ratio that BCH has a much brighter future than BTC, by being fundamentalist on the principles that matter and came along with the original white paper while not being fundamental on things that were created post-hoc — like the 1MB (now 4MW) limit in the Bitcoin Core implementation. As I also don’t think extended inflation is crucial for BTC’s operation. But anyone is free to buy or sell as they want. Let’s continue competing. Let’s civilly inform each other of bugs. May the best chain win. Finally, I like to thank Andrea Suisani, Andrew Stone and Peter Rizun for their review of this article and valuable input.
We keep inching forward to legalization. Change is coming but it is likely not what we want or who we want to buy from. This article below shows how it will be going. Lobby firms are better than your marketing firm. The best visual version would be watching the way Bitcoin became regulated in NYC and how that changed the landscape. Cannabis growers are getting pushed out because that is what capitalism looks like. We do not have ad hoc committees deciding land use but we do now. The people running the committee have campaign managers that come from these lobby firms. It is shady to see this happening but this is how it will go. You begin to see the ranting by Jungle Boyz as a reality they will likely be facing and soon. https://www.latimes.com/local/california/la-me-santa-barbara-pot-grows-20190612-htmlstory.html
What is Skywire? Where does it fit in with Skycoin?
Skycoin is a blockchain application platform. We have multiple coins in the platform (Metallicoin, mdl.life, solarbankers.com, etc). We let people launch their own blockchain applications (including coins). There are two parts to Skywire. The first part is the Skywire node. The second part is the hardware. Skywire is one of the first applications we are launching on the Skycoin platform. It is one of our flagship applications that has been in development for several years. Skywire is basically a decentralized ISP on blockchain. It is like Tor, but you are paid to run it. You forward packets for your neighbors and you receive coins You pay coins to other people for forwarding your packets. So it is like Tor but on blockchain and you are paid for running the network. Also, while Tor is slow, Skywire was designed to be faster than the current internet, instead of slower. Skywire is a test application for monetizing excess bandwidth. Eventually the software defined networking technology behind Skywire, will allow us to build physical networks (actual mesh nets) that can begin to replace centralized ISPs. However, the current Skywire prototype is still running over the existing internet, but later we will start building out our own hardware. Skywire is a solution for protecting people’s privacy and is also a solution to net neutrality. If Skycoin can can decentralize the ISPs with blockchain, then we wont have to beg the FCC to protect our rights. Skywire is just a prototype of a larger system. Eventually we will allow people to sell bandwidth, computational resources and storage. On the hardware side, the Skywire Miner is a like a personal cloud, for blockchain applications. It has eight computers in it and you plug it in and you can run your blockchain applications on it. You can even earn coins by renting out capacities to other users on the network.
How would your everyday, average Joe user access the Skywire network? Let's say from their phone…
We designed Skywire and Skycoin to be as usable as possible. We think you should not have to be a software developer to use blockchain applications. Skywire is designed to be “zeroconf”, with zero configuration. You just plug in your node and it works. Its plug and play. Eventually you will be able to buy a Skywire Miner and delegate control of the hardware to a “pool”, who will configure it for you and do all the work, optimize the settings and the pool will just take a small fee for the service and owner of the hardware will receive the rest of the coins their miners are earning. You will just plug in the Skyminer and start earning coins. It will be plug and play. Most users will not know their traffic is being carried over Skywire. Just like they do not know if they are using TCP or UDP. They will just connect their computer to the network with wifi or an ethernet cable and it will work exactly like the internet does now.
Are you completely anonymous on Skywire, or do you need to add a VPN and go through Tor for extra protection?
Skywire is designed, to protect users privacy much better than the existing internet. Each node only knows the previous hop and the next hop for any packet. The contents of the packet are encrypted (like HTTPS), so no one can spy on the data. Since Skywire is designed to be faster than the existing internet, you give up a little privacy for the speed. Tor makes packets harder to trace by reshuffling them and slowing them done. While Skywire is designed for pure speed and performance.
Will Skywire users be able to access traditional internet resources like Google and Facebook over Skywire?
Yes. Most users will not even know they are using Skywire at all. It will be completely invisible to them. Skywire has two modes of operation. One mode looks like the normal internet to the user and the other mode is for special applications designed to run completely inside of the Skywire network. Skywire native apps will have increased privacy, speed and performance, but all existing internet apps will still work on the new network.
How difficult will it be for a traditional e-service to port their products and services to Skywire / Skycoin? Are there plans in place to facilitate those transitions as companies find the exceeding value in joining the free distributed internet?
We are going to make it very easy. Existing companies run their whole internal networks on MPLS and Skywire is almost identical to MPLS, so they wont have to make any changes in most cases.
What is the routing protocol? How are the routes found?
Skywire is source routed. This means that you choose the route your data takes. You can chose routes that offer higher privacy, more bandwidth (for video downloads) or lower latency (for gaming). Skywire puts control of the data back to the user.
I have also understand that the protocols underlying in skywire will be/already are pretty different from the Internet protocols. Taking into account the years of research applied to the current Internet and the several strategies for routing it doesn't seem an easy task to rebuild everything and make it work. Where can be found the information about the routing strategies used in skywire?
The routing strategies are user defined. There is no best routing strategy that is optimal for every user or application. Instead we allow people to choose their routes and policies, based upon the application, time of day, available bandwidth, reliability and other factors. This is actually the way the original internet worked. However, it was scrapped because of the RAM limitations of early computers which only had 4 KB of memory. So the internet was built upon stateless routing protocols because of the limitations of the available computers at the time, not because the networking protocols were the best or highest performance. Today even a cell phone has 4 GB of ram and 1 million times the memory of a computer in the 1980s, so there is no reason to accept these limitations anymore. Our implementation is simpler and faster because we are stripping away the layers of junk that have accumulated. The internet was actually built up piecemeal, without any coherence, coordination or planning. The internet today is a mishmash of different ad-hoc protocols that have been duct taped together over decades, without any real design. Skywire is an re-envisioning of the internet, if it was built today knowing what we know now. This means simplifying the protocols and improving the performance.
How will the routing work if someone from Europe wants to access a video from a node in Australia (for example)? How do the nodes know the next hop if they cant read the origin or destiny of any packet?
If you have a route with N hops, then you contact each of the nodes on the route (through a messaging service) and set the route table on each route. Then when you drop a packet in the route, it gets forwarded automatically. You could have 60 or 120 hops between Australia and Europe and its fine. Each individual node only knows the previous hop and the next hop in the chain. That is all the node needs to know.
Could you estimate a timeline for when Skywire will operate independently from the current ISP infrastructure?
I think Skycoin is a very ambitious project and some parts could take ten or twenty years. Even if we started with a network of a few thousand nodes and we were growing the network over 1% per day, it will still take a decade or two to conquer the Earth. We are going to start with small scale prototypes (neighborhoods), then try cities. I think the first demonstration networks will be working this year.
How will bandwidth be priced in terms of coin hours and who determines this rate?
You could have 40 PHDs each do a thesis on this. The short answer is that an auction model has to be used (similar to Google’s Ad Words auction model) and the auction has to be designed in a way so that the bandwidth prices reach a stable equilibrium. There are parts of Skycoin that are completely open source and public, like the blockchain and consensus algorithm and Skywire. There are secrets like the auction model and pricing, that are designed to protect Skycoin from being forked and to prevent competitors from copying our work. We estimate that if a competitor was to start today, with 2 million dollars a year in R&D, that it would take them a minimum of eight years to develop a working bandwidth pricing model. And from experience in auction models for advertising networks, 80% of the competitors will fail to develop a working model at all. A working, fair, decentralized bandwidth pricing model that was competitive with what we have would take even longer. There are very few people (less than 4) on Earth who have the experience in mathematics, economics, game theory and cryptographic protocols to design the required auction and pricing models. One of Google’s secrets that allows them to dominate the internet advertising industry, is their auction model for ad pricing. That is what allows Google to pay the content producers the most money for their advertising inventory, while charging the advertising buyers the least. Google’s auction models for pricing AdSense inventory are even more secretive and important than Google’s search algorithm. This is one of the most important and secretive parts of Google’s business. Even companies like Facebook, with billion dollar war chests have been unable to replicate to close the algorithm gap in this area. Expertise in these algorithms and their auction and pricing models is one of the reasons that Google has been able to extract advertising premiums over Facebook. Even if a competitor raises a billion dollars and hires all the PHDs in the field and they had ten years to do research, I doubt they would be able to develop anything close to what we have now. The history of bandwidth markets is very interesting and Enron tried to do a trading desk for bandwidth and bandwidth futures and it completely failed. The mathematical stability and predictability of the pricing of bandwidth under adversarial conditions is one of the major problems. For instance, one of our “competitors” suggests that people will be paid coins if someone accesses their content. So why don’t you just put a website and then have 2000 bots go to it, to get free coins! How are they going to stop that. Or if they are pricing bandwidth, if the price is fixed and the price is too low, then people will not build capacity and bandwidth will be insufficient and the network will be slow. Or if the price is variable and adjusts with demands, what will stop someone from buying up the capacity for a link (“Cornering the Market”) to drive the price up 50x on links they control and extort money out of the other people on the network with a fake bandwidth shortage? The pricing algorithm has to be stable under adversarial conditions. It is a very difficult problem, harder than even consensus algorithm research. Even if a competitor had unlimited funding and unlimited time, it is unlikely that they would find a superior solution to what we have and that alone nearly guarantees that we are going to win this market. It gets even more difficult if you need price stability and you admit any type of bandwidth futures, that allow speculation on future prices. This is a kind of problem like Bitcoin consensus algorithm that can only be solved by an act of genius. We have a lot of experience in this area. It is hyper specialized and a very difficult area and is one of the areas that will give Skycoin a strong sustainable advantage.
Will there be a DNS for Skywire to register .sky domains?
Of course. We will definitely add some kind of DNS and name system eventually. Remembering and typing public keys is too difficult. We want to make it as easy as possible. We want people to be able to register aliases (like screen names) so that people can send coins to aliases instead of having to type in addresses every time. This will let people send 5 Skycoin to “@bobcat” instead of sending coins to “23TeSPPJVZ9HvXh6iYiKAaLNQroKg8yCdja”. This will be a revolution in usability.
When operating a Skyminer, will people in my surrounding area see it as a Wifi option on their devices?
You can configure it to expose a wifi access point. It depends on what you are trying to do.
While I plan on running a DIY miner regardless of the payout, will one of the first 6000 DIY miners built to the same spec as the official miner receive a worthwhile payout in Sky coin? What is the requirement for a DIY miner to get whitelisted (and earning Skycoin) on the Skywire testnet?
The reason we have white-listing on the testnet, is to stop too many nodes from joining the network at once. The network can only support so many nodes until we upgrade certain infrastructure (like the messaging/inter-process communication standard). Eventually, all DIY miners will be whitelisted, but there will probably be a queue.
The Sky team is developing antennas by their own instead of buying or using technology already developed, why is such an effort necessary?
You can of course, buy any commercial antenna or wifi system and use it for Skywire. We are developing our own custom antennas, to push performance limitations and experiment with advanced technology, like FPGAs (Field Programmable Arrays) and SDR (Software Defined Radio). Existing wifi has a huge latency (15 milliseconds per hop). We need to make several modification to get that down to 0.5 millisecond per hop. We have several custom PCB boards in development. We have a few secret hardware projects that will be announced when they are ready. For instance, the Skywire Miner was in development for two years before we publicly announced it. Some of our next hardware projects are focused on payments at the point of sale and improving usability, not just the meshnet.
So back in January Steve was asked a question in the skywire group: "Steve, I am not a tech savage, so how can I understand better the safety running a miner if people on the network do DeepWeb stuff? So i will receive and redirect data packets with crazy things and also there is around 128 GB of storage on my miner. How can i have peace of mind of that?" He replied with "If you don’t run an exit node to the open internet it won’t matter you can run relay nodes if you’re worried about it, or proxy specific content." This seems to goes counter to what you mentioned regarding end-to-end encryption with Skywire. Will some people only be relay nodes and some will be exit nodes as well?
I think the question is wrong. You only store content for public keys that you explicitly subscribe to. This means if you do not like particular content or do not want it on your hardware, then you can just blacklist those public keys or don’t subscribe to them. Data never goes on your machine unless you requested it. If you are holding data for a third party such as forwarding packets, it’s always going to be encrypted, so will look like random noise. There will never be anything in the data that causes legal liability. It will look the same as the output of a random number generator.
If using the skyminer, how much bandwidth will be necessary to run it at its best? And what about the router? It's true it has only 100mbits output? Is a 1gigbits connection necessary to reach toprates?
Hold on!!!! Let us get the software and test net running first, lol. We will know once we know what works for the testnet.
What will the price be for future Skynodes (formerly called Skyminers)?
We are working on ways of reducing the cost, such as by buying our own factory, doing custom PCB boards and using different materials. The cheapest Skywire Miner node will be about $30 for a single node miner. We will have a very cheap personal Skywire “hardware VPN” node also. The miners we are shipping now are for powering the network backbone and have 8 computers and are about $800 each. We sold people the miners for 1 BTC each so they can support development, but gave them a Skycoin bonus equal to about 1 BTC worth of Skycoin. Then that money, went to fund the cost for developing the newer hardware.
Hello all, As a quick heads up, this is slightly different to the usual case studies, but hopefully you find it interesting all the same. I run a small number of affiliate sites. I see the 80/20 rule here, where one of them makes the bulk of the money, and the rest are so-so. My general method is to copy what magazines do. As a young lad I would regularly buy FHM magazine. I had a subscription. Every month it would land on my door mat, and I would tear it open and flick to three of the pages that made it into every issue:
The jokes page
The sex confessions page (we got a bleeder!)
And the round ups
Now the round ups were usually like top X aftershaves, or top X shaving kits, or whatever. At the time I didn't know it, but I was being suckered into what would later become the most typical post of any affiliate blog site. Actually as a tip, I would strongly recommend you go to your local newsagents and pull out a copy of Cosmopolitan. See what they highlight, and copy the formula for your niche. This is absolute battle tested marketing gold. One thing the top X / round up posts did was to show a price. Best hair clipper under £30 - we recommend this one, and some rough price that might be accurate somewhere in the country. Remember, this was pre-me-being-on-the-internet. I replicated this for my blog. I started doing this a few years ago, and would put in my posts stuff like "this can be found at Amazon today for £39.99", or whatever. This is awesome. I measured an increase in link clicks on these types of posts, compared to just "click here to buy" type links. The problem is: Amazon in particular are really strict about this. Your price cannot be "oh yeah it was this price once" sort of thing. If it's wrong (out of date by >24 hours) then you can get your affiliate account banned. It means if you commit to this type of strategy, and I wanted too because I saw more click throughs, then you are going to hit a scaling issue: Simply put, the more blog posts you add that use this approach, the more time you're going to have to devote to keeping all the links updated. Or, alternatively, accept a poorer click through rate.
Enter the computer boffin
Being a geek, I figured I could solve this problem. I could show the current price by just asking for that price from Amazon's API. I then made a thing to add this to my WordPress posts. And at a basic level, this works. I didn't actually tell anyone about this for ages. I considered it my "secret sauce". But then I shared it with the only other affiliate I know in real life, and she asked if she could use it. This actually made me really nervous. You've probably heard about things that look like they've been "designed by a programmer". Well, that's where this was at. I tidied it up a touch and made some instructions, and sent them over. Almost immediately she started asking whether it could do X, or Y, or Z. Each time I was like no, but that's a pretty good idea. Then she asked me who else was using this, and I said - heh, just you and me :) Starting a SaaS This is a little unusual in that I'm not at the "idea" stage. I have a thing. It's good enough (tm) to go. I have a rough idea that this could be useful to affiliates. It's useful to me. It's useful to the only other affiliate I regularly talk to. I'm now trying to find out if it's useful to others, too. At this stage I have no idea about pricing. I currently think it needs way more polish, and likely a few more features, before I would feel happy charging anything for it. Maybe that's the programmer mentality. I'm conscious I have no pre-existing audience to launch too. A few years back I started a blog about my day-to-day affiliate marketing activities, but it gained absolutely no traction, and I let the domain drop. I can't help kick myself right now about this, but chances are it would still be a ghost town anyway, so it's akin to me kicking myself for not mining a few bitcoins back in the day. As I have the tool up and running, I'm thinking I can do a simple demo blog showing off what it does. I've noticed Amazon don't always return the correct price from their API. This one is kinda weird, and needs further investigation. What I have done is check CamelCamelCamel when the price seems wrong, and if it's the same on CCC then I figure it's Amazon at fault. This is fine for me, but would be hard to explain to a paying customer of a SaaS app. To give you some idea of timescales to develop this: I've been working on it, ad-hoc, for about 2 years at this point. I've been through a couple of re-writes as honestly, this was a fairly tricky problem to "solve". Overall that's about all I know of starting a SaaS - it's going to be a learning journey, which is why I think this case study would be a good place to share what I find. As an extra piece of info, affiliate marketing is not my full time income. I have an unusual day job, but all the same, a day job. I have no venture / angel funding here, it's completely bootstrapped.
What I've done so far
I have the software up and running, and live on three blogs. Two are mine, one is my friends. I have the plugin in the WordPress plugin store. I believe I'm on page 34 of 36 for what I figure is my most important keyword :D Figuring out WordPress plugin store "seo" is going to be an interesting challenge. I've been really shall we say, laid back, about attempting to tackle the seo challenge as I'm worried an influx of people would be too much for me to handle. I guess this is ridiculous thinking - so I'm working on trying to shift my mindset accordingly.
Traffic Stats (All Countries)
Month 1 (Jan 18)
This is excluding my IP address, though honestly once you've added your affiliate accounts, there's very little reason to visit the website. Everything else happens in the plugin menus.
SaaS Earnings Stats
Month 1 (Jan 18)
Month 1 Total: $29.99
Lifetime Total: $29.99
All my expenses are listed in USD dollars for standardisation. I am UK based, so "earn" in GBP.
Goals for end of March
I'm a real believer in the concept of a Sprint. For those who aren't IT geeks you may not have heard of sprints, but essentially they are two weeks where you focus on finishing one "biggish" task. There's a bit more to it than this, but essentially I try to break my goals down into 2 week chunks. This gives me ~6 weeks to get the following done:
Record and upload an introduction, and instruction video
Find and Contact at least 20 affiliate blog owners who use any of the currently supported affiliate programs I have, and ask them to try the software (scary)
Create a survey to email to anyone who uses the plugin, and find out their feedback (will use Survey Monkey for this)
Write and post a blog post about the tool for the web site
Optimise the WordPress plugin SEO - I think this is going to be my biggest source of traffic, but that's a gut feeling at this point (scary)
Generally when things feel scary to me they are a sign I'm pushing in the right direction. Certainly out of my comfort zone. For my affiliate sites I can hide behind a persona, but here things are different. What I'm desperately trying not to do is any programming. I find I slip all to easily back into the programming groove - it's "safe" and I enjoy doing it, but I'm trying not to add anything new to this tool unless a whole bunch of people are screaming at me for it. If you have any questions, please fire away.
Reddit and the Struggle to Detoxify the Internet - by Andrew Marantz (The New Yorker) 18 March 2018 (1 of 2)
https://archive.is/Z9O4E (Part One of Two) Which Web sites get the most traffic? According to the ranking service Alexa, the top three sites in the United States, as of this writing, are Google, YouTube, and Facebook. (Porn, somewhat hearteningly, doesn’t crack the top ten.) The rankings don’t reflect everything—the dark Web, the nouveau-riche recluses harvesting bitcoin—but, for the most part, people online go where you’d expect them to go. The only truly surprising entry, in fourth place, is Reddit, whose astronomical popularity seems at odds with the fact that many Americans have only vaguely heard of the site and have no real understanding of what it is. A link aggregator? A microblogging platform? A social network? To its devotees, Reddit feels proudly untamed, one of the last Internet giants to resist homogeneity. Most Reddit pages have a throwback aesthetic, with a few crudely designed graphics and a tangle of text: an original post, comments on the post, responses to the comments, responses to the responses. That’s pretty much it. Reddit is made up of more than a million individual communities, or subreddits, some of which have three subscribers, some twenty million. Every subreddit is devoted to a specific kind of content, ranging from vital to trivial: News, Politics, Trees (for marijuana enthusiasts), MarijuanaEnthusiasts (for tree enthusiasts), MildlyInteresting (“for photos that are, you know, mildly interesting”). Some people end up on Reddit by accident, find it baffling, and never visit again. But people who do use it—redditors, as they’re called—often use it all day long, to the near-exclusion of anything else. “For a while, we called ourselves the front page of the Internet,” Steve Huffman, Reddit’s C.E.O., said recently. “These days, I tend to say that we’re a place for open and honest conversations—‘open and honest’ meaning authentic, meaning messy, meaning the best and worst and realest and weirdest parts of humanity.” On November 23, 2016, shortly after President Trump’s election, Huffman was at his desk, in San Francisco, perusing the site. It was the day before Thanksgiving. Reddit’s administrators had just deleted a subreddit called Pizzagate, a forum for people who believed that high-ranking staffers of Hillary Clinton’s Presidential campaign, and possibly Clinton herself, were trafficking child sex slaves. The evidence, as extensive as it was unpersuasive, included satanic rituals, a map printed on a handkerchief, and an elaborate code involving the words “cheese” and “pizza.” In only fifteen days of existence, the Pizzagate subreddit had attracted twenty thousand subscribers. Now, in its place, was a scrubbed white page with the message “This community has been banned.” The reason for the ban, according to Reddit’s administrators, was not the beliefs of people on the subreddit, but the way they’d behaved—specifically, their insistence on publishing their enemies’ private phone numbers and addresses, a clear violation of Reddit’s rules. The conspiracy theorists, in turn, claimed that they’d been banned because Reddit administrators were part of the conspiracy. (Less than two weeks after Pizzagate was banned, a man fired a semiautomatic rifle inside a D.C. pizzeria called Comet Ping Pong, in an attempt to “self-investigate” claims that the restaurant’s basement was a dungeon full of kidnapped children. Comet Ping Pong does not have a basement.) Some of the conspiracy theorists left Reddit and reunited on Voat, a site made by and for the users that Reddit sloughs off. (Many social networks have such Bizarro networks, which brand themselves as strongholds of free speech and in practice are often used for hate speech. People banned from Twitter end up on Gab; people banned from Patreon end up on Hatreon.) Other Pizzagaters stayed and regrouped on The_Donald, a popular pro-Trump subreddit. Throughout the Presidential campaign, The_Donald was a hive of Trump boosterism. By this time, it had become a hermetic subculture, full of inside jokes and ugly rhetoric. The community’s most frequent commenters, like the man they’d helped propel to the Presidency, were experts at testing boundaries. Within minutes, they started to express their outrage that Pizzagate had been deleted. Redditors are pseudonymous, and their pseudonyms are sometimes prefaced by “u,” for “username.” Huffman’s is Spez. As he scanned The_Donald, he noticed that hundreds of the most popular comments were about him: “fuck u/spez” “u/spez is complicit in the coverup” “u/spez supports child rape” One commenter simply wrote “u/SPEZ IS A CUCK,” in bold type, a hundred and ten times in a row. Huffman, alone at his computer, wondered whether to respond. “I consider myself a troll at heart,” he said later. “Making people bristle, being a little outrageous in order to add some spice to life—I get that. I’ve done that.” Privately, Huffman imagined The_Donald as a misguided teen-ager who wouldn’t stop misbehaving. “If your little brother flicks your ear, maybe you ignore it,” he said. “If he flicks your ear a hundred times, or punches you, then maybe you give him a little smack to show you’re paying attention.” Although redditors didn’t yet know it, Huffman could edit any part of the site. He wrote a script that would automatically replace his username with those of The_Donald’s most prominent members, directing the insults back at the insulters in real time: in one comment, “Fuck u/Spez” became “Fuck u/Trumpshaker”; in another, “Fuck u/Spez” became “Fuck u/MAGAdocious.” The_Donald’s users saw what was happening, and they reacted by spinning a conspiracy theory that, in this case, turned out to be true. “Manipulating the words of your users is fucked,” a commenter wrote. “Even Facebook and Twitter haven’t stooped this low.” “Trust nothing.” The incident became known as Spezgiving, and it’s still invoked, internally and externally, as a paradigmatic example of tech-executive overreach. Social-media platforms must do something to rein in their users, the consensus goes, but not that. Huffman can no longer edit the site indiscriminately, but his actions laid bare a fact that most social-media companies go to great lengths to conceal—that, no matter how neutral a platform may seem, there’s always a person behind the curtain. “I fucked up,” Huffman wrote in an apology the following week. “More than anything, I want Reddit to heal, and I want our country to heal.” Implicit in his apology was a set of questions, perhaps the central questions facing anyone who worries about the current state of civic discourse. Is it possible to facilitate a space for open dialogue without also facilitating hoaxes, harassment, and threats of violence? Where is the line between authenticity and toxicity? What if, after technology allows us to reveal our inner voices, what we learn is that many of us are authentically toxic? The only way to understand the Internet, at least at first, was by metaphor. “Web” and “page” and “superhighway” are metaphors. So are “link,” “viral,” “post,” and “stream.” Last year, the Supreme Court heard a case about whether it was constitutional to bar registered sex offenders from using social media. In order to answer that question, the Justices had to ask another question: What is social media? In sixty minutes of oral argument, Facebook was compared to a park, a playground, an airport terminal, a polling place, and a town square. It might be most helpful to compare a social network to a party. The party starts out small, with the hosts and a few of their friends. Then word gets out and strangers show up. People take cues from the environment. Mimosas in a sun-dappled atrium suggest one kind of mood; grain alcohol in a moldy basement suggests another. Sometimes, a pattern emerges on its own. Pinterest, a simple photo-sharing site founded by three men, happened to catch on among women aspiring to an urbane life style, and today the front page is often a collage of merino scarves and expensive glassware. In other cases, the gatekeeping seems more premeditated. If you’re fourteen, Snapchat’s user interface is intuitive; if you’re twenty-two, it’s intriguing; if you’re over thirty-five, it’s impenetrable. This encourages old people to self-deport. Huffman and his college roommate, Alexis Ohanian, founded Reddit a few weeks after graduating from the University of Virginia, in 2005. The first people to show up were, like the co-founders, the kind of strong-headed young men who got excited about computer programming, video games, and edgy, self-referential humor. Reddit’s system was purely democratic, which is to say anarchic. Anyone could post any link, and the ones that got the most “upvotes” would rise to the top of a page. At the time, Facebook was available only to college students, and before joining it you had to provide your real name, your birthday, and a valid school e-mail address—the equivalent of being carded at the door. To join Reddit, all you needed was a username that hadn’t been claimed yet. You could start as many anonymous accounts as you wanted, which gave rise to creativity, and also to mischief. Back then, Ohanian was ungainly and clean-shaven, and he was often photographed in a hoodie and with a goofy smile. At his wedding, last year, wearing a beard and an Armani tuxedo, he was nearly unrecognizable. (The paparazzi weren’t too interested in him, though, given that his bride was Serena Williams.) Huffman, on the other hand, has always looked more or less the same: bright-blue eyes, chipmunk teeth, and a thatch of blond hair. A few months after Reddit launched, Huffman created the first constraints. People were posting links to vulgar and violent content—which was fine, except that Huffman wanted users to have some idea of what they were about to click on, so that they could avoid, say, inadvertently opening porn in front of their bosses. Huffman labelled some content N.S.F.W.—not safe for work—and separated it from everything else. That was the end of pure democracy. In 2006, Ohanian and Huffman sold Reddit to Condé Nast, a media conglomerate that owns more than twenty magazines, including this one. (Reddit now operates independently.) The sale made them twenty-two-year-old millionaires, but they didn’t fit in at a large corporation, and three years later they left. In their absence, the party got bigger and weirder, and ominous cliques started to gather in the corners. One popular subreddit, Jailbait, was devoted to sexually suggestive photos of young-looking women. This was profoundly creepy, but probably not illegal—the subreddit’s users swore that all the women in the photos were eighteen or older—and Reddit allowed the community to grow. In September of 2011, Anderson Cooper discussed the subreddit on CNN. “It’s pretty amazing that a big corporation would have something like this, which reflects badly on it,” he said. Traffic to Jailbait quadrupled overnight. Twelve days later, after someone in the group apparently shared a nude photo of a fourteen-year-old girl, the community was banned. And yet the founder of Jailbait, an infamous troll who went by u/Violentacrez, was allowed to stay on Reddit, as were some four hundred other communities he’d created—Jewmerica, ChokeABitch, and worse. (Yes, it gets worse.) Yishan Wong, an engineer who had worked at Facebook, was then Reddit’s C.E.O. He implied that he’d banned Jailbait only because the subreddit had violated U.S. law. “We stand for free speech,” he wrote in an internal post, in 2012. Reddit’s goal, he continued, was to “become a universal platform for human discourse.” Therefore, “it would not do if, in our youth, we decided to censor things simply because they were distasteful.” At the time, Wong’s free-speech absolutism was ubiquitous in Silicon Valley. Twitter’s executives referred to their company as “the free-speech wing of the free-speech party.” Facebook’s original self-description, “an online directory that connects people through social networks at colleges,” had evolved into a grandiose mission statement: “Facebook gives people the power to share and make the world more open and connected.” With the Arab Spring fresh in everyone’s mind, few questioned the assumption that “giving people the power” would inevitably lead to social progress. Barack Obama, who had been carried into office by a social-media groundswell, often expressed a similar optimism about the salubrious effects of the Internet. “In the twenty-first century, information is power,” Obama said in a 2011 speech on Middle East policy. “The truth cannot be hidden. . . . Such open discourse is important even if what is said does not square with our worldview.” Wong left the company in 2014, after two and a half years. His successor was Ellen Pao, a former venture capitalist. She lasted eight months. Early in her tenure, Reddit announced a crackdown on involuntary pornography. If you found a compromising photo of yourself circulating on Reddit without your consent, you could report it and the company would remove it. In retrospect, this seems like a straightforward business decision, but some redditors treated it as the first in an inevitable parade of horrors. “This rule is stupid and suppresses our rights,” u/penisfuckermcgee commented. A few months later, Reddit banned five of its most egregious communities, including FatPeopleHate and ShitNiggersSay. Again redditors were apoplectic (“We may as well take a one way ticket to North Korea”). Almost every day, strident misogynists called Pao a tyrant, an “Asian slut,” or worse. (Yes, it gets worse.) She resigned in July, 2015. “The Internet started as a bastion for free expression,” she wrote in the Washington Post. “But that balancing act is getting harder. The trolls are winning.” Over time, social networks have turned into institutions. More than two billion people now use Facebook. In other words, the company has achieved its mission of making the world more connected. In 2016, that meant, among other things, making the American electorate more connected to white supremacists, armed militias, Macedonian fake-news merchants, and micro-targeted campaign ads purchased in rubles. “I continue to believe Mr. Trump will not be President,” Obama said that year, despite the mounting aggression in some online forums. “And the reason is because I have a lot of faith in the American people.” (In response to Obama’s remarks, a commenter on The_Donald wrote, “FUCK THAT LOW ENERGY CUCK!”) Shortly after the election, Brad Parscale, the Trump campaign’s top digital strategist, told Wired, “Facebook and Twitter were the reason we won this thing.” Reddit was also an important part of Trump’s strategy. Parscale wrote—on Reddit, naturally—that “members here provided considerable growth and reach to our campaign.” The_Donald, in particular, proved a fecund host cell for viral memes. On July 2, 2016, Trump tweeted a photo collage of Hillary Clinton, piles of cash, and the phrase “Most Corrupt Candidate Ever!” written inside a six-pointed star. When Trump’s critics called attention to the image’s anti-Semitic implications, The_Donald’s users rushed to Trump’s defense, posting photos of other six-pointed stars in innocuous contexts. “Where is the outrage from the liberal left on this one?” a user wrote, beneath a photo of a “Frozen”-themed sticker book with a star on its cover. A few hours later, Trump tweeted the same photo, with a version of the same question, followed by “Dishonest media! #Frozen.” During the campaign, Trump, or someone typing on his behalf, participated in Reddit’s signature interview format—an A.M.A., for “ask me anything.” In response to a question about the “protected class of media elites,” Trump wrote, “I have been very concerned about media bias and the total dishonesty of the press. I think new media is a great way to get out the truth.” This drew hundreds of jubilant comments (u/RAINBOW_DILDO: “daddy YES”; u/CantContheDon: “WE’RE THE MEDIA NOW”). The_Donald, with more than half a million subscribers, is by far the biggest pro-Trump subreddit, but it ranks just below No. 150 on the list of all subreddits; it’s roughly the same size as CryptoCurrency and ComicBooks. “Some people on The_Donald are expressing their genuine political beliefs, and obviously that’s something we want to encourage,” Huffman said. “Others are maybe not expressing sincere beliefs, but are treating it more like a game—If I post this ridiculous or offensive thing, can I get people to upvote it? And then some people, to quote ‘The Dark Knight,’ just want to watch the world burn.” On some smaller far-right subreddits, the discourse is more unhinged. One, created in July of 2016, was called Physical_Removal. According to its “About Us” section, it was a subreddit for people who believe that liberals “qualify to get a helicopter ride.” “Helicopter ride,” an allusion to Augusto Pinochet’s reputed habit of throwing Communists out of helicopters, is alt-right slang for murder. The_Donald accounts for less than one per cent of Reddit’s traffic, but it occupies far more than one per cent of the Reddit-wide conversation. Trolls set a cunning trap. By ignoring their provocations, you risk seeming complicit. By responding, you amplify their message. Trump, perhaps the world’s most skilled troll, can get attention whenever he wants, simply by being outrageous. Traditional journalists and editors can decide to resist the bait, and sometimes they do, but that option isn’t available on user-generated platforms. Social-media executives claim to transcend subjectivity, and they have designed their platforms to be feedback machines, giving us not what we claim to want, nor what might be good for us, but what we actually pay attention to. There are no good solutions to this problem, and so tech executives tend to discuss it as seldom as possible, and only in the airiest of platitudes. Twitter has rebuffed repeated calls to ban President Trump’s account, despite his many apparent violations of company policy. (If tweeting that North Korea “won’t be around much longer” doesn’t break Twitter’s rule against “specific threats of violence,” it’s not clear what would.) Last fall, on his Facebook page, Mark Zuckerberg addressed—sort of, obliquely—the widespread critique that his company was exacerbating political polarization. “We’ll keep working to ensure the integrity of free and fair elections around the world, and to ensure our community is a platform for all ideas and force for good in democracy,” he wrote, then stepped away as a global howl of frustration grew in the comments. I asked a few social-media executives to talk to me about all this. I didn’t expect definitive answers, I told them; I just wanted to hear them think through the questions. Unsurprisingly, no one jumped at the chance. Twitter mostly ignored my e-mails. Snapchat’s P.R. representatives had breakfast with me once, then ignored my e-mails. Facebook’s representatives talked to me for weeks, asking precise, intelligent questions, before they started to ignore my e-mails. Reddit has more reason to be transparent. It’s big, but doesn’t feel indispensable to most Internet users or, for that matter, to most advertisers. Moreover, Anderson Cooper’s CNN segment was hardly the only bit of vividly terrible press that Reddit has received over the years. All social networks contain vitriol and bigotry, but not all social networks are equally associated with these things in the public imagination. Recently, I typed “Reddit is” into Google. Three of the top suggested auto-completions were “toxic,” “cancer,” and “hot garbage.” Huffman, after leaving Condé Nast, spent a few months backpacking in Costa Rica, then founded a travel company called Hipmunk. In July, 2015, he returned to Reddit as C.E.O. In a post about his “top priority” in the job, he wrote, “The overwhelming majority of content on reddit comes from wonderful, creative, funny, smart, and silly communities. There is also a dark side, communities whose purpose is reprehensible, and we don’t have any obligation to support them. . . . Neither Alexis nor I created reddit to be a bastion of free speech.” This was shocking, and about half true. When free-speech absolutism was in vogue, Reddit’s co-founders were as susceptible to its appeal as anyone. In 2012, a Forbes reporter asked Ohanian how the Founding Fathers might have reacted to Reddit. “A bastion of free speech on the World Wide Web? I bet they would like it,” Ohanian responded. “I would love to imagine that ‘Common Sense’ would have been a self-post on Reddit, by Thomas Paine, or actually a redditor named T_Paine.” Still, Ohanian and Huffman never took their own rhetoric too literally. The site’s rules were brief and vague, and their unwritten policy was even simpler. “We always banned people,” Huffman told me. “We just didn’t talk about it very much.” Because Reddit was so small, and misbehavior relatively rare, Huffman could do most of the banning himself, on an ad-hoc basis. “It wasn’t well thought out or even articulated, really. It was ‘That guy has the N-word in his username? Fuck that.’ Delete account.” As C.E.O., Huffman continued the trend Pao had started, banning a few viciously racist subreddits such as Coontown. “There was pushback,” Huffman told me. “But I had the moral authority, as the founder, to take it in stride.” If Pao was like a forbearing parent, then Huffman’s style was closer to “I brought you into this world, and I can take you out of it.” “Yes, I know that it’s really hard to define hate speech, and I know that any way we define it has the potential to set a dangerous precedent,” he told me. “I also know that a community called Coontown is not good for Reddit.” In most cases, Reddit didn’t suspend individual users’ accounts, Huffman said: “We just took away the spaces where they liked to hang out, and went, ‘Let’s see if this helps.’ ” Reddit’s headquarters, in a former radio tower in downtown San Francisco, look like a stereotypical startup office: high concrete ceilings, a large common area with beer and kombucha on tap. Each desk is decorated aggressively with personal flair—a “Make Reddit Great Again” hat, a glossy print magazine called Meme Insider. Working at Reddit requires paying close anthropological attention to the motley tastes of redditors, and it’s not uncommon to see groups of fit, well-dressed employees cheerfully discussing the most recent post on CatDimension or PeopleFuckingDying. The first morning I visited the office, I ran into Huffman, who was wearing jeans, a T-shirt, and Adidas indoor-soccer shoes, as he tried to persuade an employee to buy a ticket to Burning Man. Huffman is far more unfiltered than other social-media executives, and every time he and I talked in the presence of Reddit’s head of P.R., he said at least one thing that made her wince. “There’s only one Steve,” Ohanian told me. “No matter when you catch him, for better or worse, that’s the Steve you’re gonna get.” I had a list of delicate topics that I planned to ask Huffman about eventually, including allegations of vote manipulation on Reddit’s front page and his personal feelings about Trump. Huffman raised all of them himself on the first day. “My political views might not be exactly what you’d predict,” he said. “I’m a gun owner, for example. And I don’t care all that much about politics, compared to other things.” He speaks in quick bursts, with an alpha-nerd combination of introversion and confidence. His opinion about Trump is that he is incompetent and that his Presidency has mostly been a failure. But, he told me, “I’m open to counterarguments.” That afternoon, I watched Huffman make a sales pitch to a group of executives from a New York advertising agency. Like many platforms, Reddit has struggled to convert its huge audience into a stable revenue stream, and its representatives spend a lot of time trying to convince potential advertisers that Reddit is not hot garbage. Huffman sat at the head of a long table, facing a dozen men and women in suits. The “snarky, libertarian” ethos of early Reddit, he said, “mostly came from me as a twenty-one-year-old. I’ve since grown out of that, to the relief of everyone.” The executives nodded and chuckled. “We had a lot of baggage,” he continued. “We let the story get away from us. And now we’re trying to get our shit together.” Later, Huffman told me that getting Reddit’s shit together would require continual intervention. “I don’t think I’m going to leave the office one Friday and go, ‘Mission accomplished—we fixed the Internet,’ ” he said. “Every day, you keep visiting different parts of the site, opening this random door or that random door—‘What’s it like in here? Does this feel like a shitty place to be? No, people are generally having a good time, nobody’s hatching any evil plots, nobody’s crying. O.K., great.’ And you move on to the next room.” In January, Facebook announced that it would make news less visible in its users’ feeds. “Facebook was originally designed to connect friends and family—and it has excelled at that,” a product manager named Samidh Chakrabarti wrote on a company blog. “But as unprecedented numbers of people channel their political energy through this medium, it’s being used in unforeseen ways with societal repercussions that were never anticipated.” It wasn’t the most effusive mea culpa in history, but by Facebook’s standards it amounted to wailing and gnashing of teeth. “We want to make sure that our products are not just fun, but are good for people,” Mark Zuckerberg told the Times. Direct pronouncements from him are so rare that even this pabulum was treated as push-alert-worthy news. (Continued Part Two of Two - https://www.reddit.com/CapitalistParadise/comments/842ouv/reddit_and_the_struggle_to_detoxify_the_internet/?st=jepf79wf&sh=eaa395fc ) https://archive.is/Z9O4E
Bitcoin is just Miners Making Choices at each Block and Getting Paid if they Satisfy the Ecosystem
Each miner is like an operator sitting at a control panel. He has levers and dials and ACCEPT and REJECT buttons. He can mine any kind of blocks he wants, and reject or mine on top of anyone else's block as he pleases. He has no constraints on his actions other than his own motivation to have his blocks be accepted by other miners and have his equipment remain valuable, which is effected by keeping his blocks acceptable to the ecosystem of Bitcoin users and businesses. There is no control by software; that is only an illusion. The software is like an optional screen the guy at the control panel can use to automate some of his decisions. However, over time, the guys sitting at the control panels apparently got some kind of decision fatigue and it became common practice to just leave the automating software running as is because everyone else is running it that way. That practice created a sticky Schelling point. However, nothing about the software takes away their choice; it's the Schelling point that "limits" their choice in that they should stick to the Schelling point if they want to profit in the immediate term, and yet it is entirely changeable all the same if they coordinate. What's the point of posting this? BCH already split away and we don't have to worry about Core's Schelling points any more. But the same principles apply. If we mess up the language we mess up our thinking, delaying progress going forward at a time when we cannot afford to be slow. Lessons for BTC and BCH alike:
There is no blocksize cap. Just miners making choices at each block.
Dev teams are do not govern. Only miners making choices govern, directed by investors and other stakeholders.
Everything independent development teams do is just "decision automation software-packaging". Miners make the choices at each block, and may or may not use any other dev team(s)' software in whole or in part. It would be silly for a team to act as if they were the "reference implementation" or that their software shouldn't be modified, as the whole point is to help miners make decisions more conveniently. Likewise, threatening to quit of miners don't use your software or if they modify it is like a cruise control manufacturer threatening to quit if you don't use or buy their cruise control. The correct response is, "So what?"
The software is not the spec. Miners making choices are the spec, and those choices are dictated by Schelling points that bring the miners into agreement. If every miner runs the same software and never mods or deviates from it, the software sets the Schelling points and effectively becomes the spec for a time, yes, but this is incidental, because in a system like BCH where 8 dev teams create software that miners run, and since miners mod their own software and may even make personal ad hoc choices, the spec is again clearly shown to be fluid as determined by a bunch of guys sitting at control panels, yet solid by the powerful game theoretic dynamics of Schelling points. This is even more readily apparent thanks to the fact that BU, ABC, XT, and others allow miners to adjust their settings on the fly and don't try for the Pyrrhic victory of setting a temporary Schelling point by making it really inconvenient to modify certain settings, especially controversial ones. Once again, miners making choices are the spec, and those choices are dictated by Schelling points that bring the miners into agreement. Attempts to create consensus before the fact by lording it over miners through "hardcoded" limits and slipping changes in through sneaky softforks are exactly backwards and should be met with a smoothly extended middle finger. Devs are not governors, and Bitcoin creates consensus through incentives, not silly hardware parameter lockdown gambits like Core's 1MB "cap."
Miners should have their own dev teams and their own standards organizations. It's their money at stake, not the independent dev teams'. The idea that volunteer devs can do their job for them is a little odd, but I'm sure miners like it like that at present.
Implementation team roadmaps should be seen as business proposals to miners, which they can accept or reject or combine, in full or in part. Another reason it is natural that teams work for miners. I think in the future the teams will be hired by miners, or consortiums of miners.
A modest proposal (radical pruning for long-term scaling)
I hesitate to post stuff like this, because I'm really not close enough to the project, may not know about past discussions of the same idea, and am not volunteering to do the significant work involved. But still, maybe the suggestion, or the reinforcement of the ideas, is valuable...
I think the unlimited growth of "permanent" data gets too little attention in blockchain currencies, including Monero. People obviously do pay attention to scaling. In the case of Monero, the roadmap talks about using sidechains to take stuff off of the main chain. In the end, though, the main chain grows without bound. If Monero really succeeds, that chain could in fact get very, very big, regardless of optimization. Wikipedia says there are 7.4 billion people on this planet. What if each of them makes one transaction a week? One a day? The problem seems worse for Monero than for, say, Bitcoin, because Monero can't even identify (and therefore merge or selectively prune) spent outputs. You could, however, bound the chain size by simply throwing away everything older than some particular age; not partial pruning, but complete elimination of the blocks. Obviously you could still end up with a huge chain, but there'd be a finite limit on its size. The biggest cost would that outputs ended up with an expiration date. If Monero is lucky, something like that may eventually be a technical necessity. For political and governance reasons, if there's any real chance it will ever have to be done, I think it should be done soon. It may not be possible to do it later.
The phrase "without bound" is intrinsically scary, but permanent retention has other bad effects.
Raw cost and node incentives: Cryptocurrencies generally compensate miners, but not nodes. Once something is on the chain, the network has to store it for free. In the limit, permanent storage (and bandwidth for starting up new nodes) will always become the biggest actual cost, exceeding mining or anything else. Even if "the limit" is never reached, it's still a big cost. It's hard to imagine many people carrying that cost out of love, so you could get weird disruptions caused by the node operators using ad-hoc tactics to get some kind of compensation. Those could be economic disruptors or they could be privacy disruptors. On the other hand, if the network finds a way to build in node incentives, high storage costs may simply mean those incentives have to be more than anybody actually wants to pay.
Centralization: The bigger the chain, the more centralization you have, and the fewer nodes you have. You may be able spread out the storage, but in the end there are only going to be N replicas of any given part of the chain.
Freeloading: The only critical reason to keep old blocks forever seems to be to guarantee that an output you got however long ago will be spendable forever, without you doing anything to maintain it. But that's not necessarily a good thing. Blockchain permanence encourages "store of value freeloading". People who just want to hold the currency pay no fees (and generate no cover traffic), even though they create a real cost to the network at large. Holders are subsidized by the people who actually do transactions. So are people who just want to use the chain as a notary for non-currency purposes, although I don't know if that can happen in Monero the way it can in Bitcoin.
Lost-money waste: If some outside event prevents money from ever being spendable, the blockchain still has to track that money. If somebody totally loses all her private keys, the chain still holds onto her outputs forever, even though they'll never be spendable. If a multisig escrow runs into an unresolvable dispute, the chain is left holding the bag.
Unreliability: Something could unavoidably invalidate old data (Hello, quantum...). At that point permanence has no value, and anything that requires permanence breaks.
Complexity: If you have to split or spread a large data set, you're going to have to do something relatively complicated. Even tiered storage is complicated compared to non-tiered storage. Distributed storage is worse. Spreading things out looks especially tricky for a currency where any given transaction may mix in any given set of outputs. Complexity is bad for reliability, bad for security, and bad for being able to understand your privacy guarantees.
Performance: Bigger data sets are just slower; there's a cost to getting data from the next tier or from another shard or whatever. That's especially true if the data set may not have very good locality properties... and large anonymity sets don't usually like locality.
Privacy: I suspect, but have no actual knowledge, that it's harder to pick a plausible set of mixins if the chain has a huge range of transaction ages.
Why do it now?
Unless the expectation of permanence is quashed early, I'm afraid various factors will lock it in. And the best way to quash that expectation is to decide early, then actually remove permanence ASAP. Obviously there's no certainty that permanence will ever have to be removed, or that conditions will change to make that difficult. But that's the safe way to bet. Removing permanence now is relatively inexpensive.
Remember how Bitcoin sudden couldn't agree on even slightly contentious changes? In a few years, I think changing permanence will be very hard politically. I'd expect it to be about as hard as changing the proof of work, and almost as hard as changing the emission curve. And those will be very hard changes to make if adoption keeps growing.
Don't touch my money!
Cryptocurrency seems to attract people who want money that can never go away. Many want it to be as durable as gold, and think of it mainly as an untouchable "nest egg". If you suddenly tell them it can evaporate unless they do some new thing like renewing outputs, then surely many of them will see that as a takeaway and a betrayal. They'll have that reflex even if the reasons are obvious and the actual cost and effort are tiny. You might say that'd be silly, and I'd agree with you... but I think it'll happen nonetheless. I think it may happen even if permanence goes away now, and I'm sure it'll happen if permanence goes away later. Wouldn't it be better to try to keep such expectations from building up? What happens to the currency if people go around claiming it's a ripoff?
Fear for the uninvolved
Perhaps a more justifiable concern: suppose somebody buys Monero next year. They assume it's permanent because nobody told them otherwise and that's how blockchains work today. They pay no attention for 10 years, and then discover their money's gone away. Sure, that person should have paid more attention, but that doesn't mean anybody should want them to get screwed. Changing now minimizes the number of people who might be in that postion later. And even if you, the reader, don't care about oblivious people, others will. There will be those who really want to protect them, and some of those protectors will have influence. They won't necessarily all be in the community, either; what happens if regulators tell major exchanges that they are on the hook if any unprepared person loses money because of this "unannounced change"? Imagine the outcry if a government decided to expire cash in circulation. Actually, you don't have to imagine it; it happens from time to time. Look how much work those governments put into warning everybody, and how much heat they get if they don't. The Monero community can't warn people that way. So it pays to avoid it being a big issue.
"Monero's been infiltrated! They want you to renew your money so the NSA can trace the transactions! Wake up, sheeple! (obXKCD)". The more relatively casual users Monero accumulates, the worse this will get. And mass adoption is all about the casual users.
Not invented here
Don't forget the political and technical issues you get with trying to do a protocol change once there are a lot of implementations. Today, Monero has one node implementation and a handful of wallets. In the future, a lot more people will have to coordinate on any change. I really like Monero's periodic hardfork system, but it doesn't solve everything.
On the technical project management side, there's also the risk of "technical debt" making it really hard to actually remove permanence. Permanence assumptions could get baked into Monero itself, or into critically important related technology. They might not even always be obvious assumptions. Undoing that could be hard.
Get ready now
There's a chance that non-permanence could be forced on the community, if not by sheer chain size, then by something like quantum computing making old signatures fundamentally meaningless. It should be fairly easy to move new transactions to a new signature scheme, but you would still lose the old ones. It would be good to be prepared in advance if that happened, and the best way to prepare for something is to make it the normal and expected thing.
Here's a crude outline. I'd suggest announcing something like this as The Plan immediately, and building it into the software as soon as reasonably possible. I've written it to talk about times in years, because real time is easier for users to deal with than block counts. If the time accounting has to be done in blocks instead, that's not the end of the world.
Immediately fix wallets
Starting as soon as possible, wallets prepare for impermanence:
Wallets automatically renew old outputs by sweeping those outputs back to themselves. By default, each output is renewed when it's about a year old. The exact timing is randomized, mostly to improve renewals' value as cover traffic. An output is eligible to be put in a renewal transaction when it reaches an age drawn from a uniform distribution between 9 and 15 months. Such renewals are batched up in some sane way. Anything older than 15 months is always renewed immediately. Users can change those parameters, and can manually renew their balances if they know they'll be offline for a while.
A wallet will warn you if you try to make the renewal time more than about 2 years
It will also warn you if you seem to be using it very infrequently.
2020 hard fork
As of about the beginning of 2020, outputs more than three years old cannot be spent, full stop. After that same time, nothing is expected to keep any chain data more than three years old. If you haven't run your wallet for very long time, it may not have been able to renew older outputs, and may show a lower balance when you do run it. If you haven't run your wallet for three years, your balance will be zero.
There's no traceability to the genesis block. The main evidence that any given three-year collection of blocks is "the" chain is the hashpower that's gone into creating that collection, although you could of course "pin" some old blocks in the software itself. I think this implies that there can never be proof of stake mining, but I could be wrong. Money is conceptually only traceable to the oldest retained block, not necessarily to the one where it was mined.
Sidechains and whatnot, when implemented, are expected to "check in" and confirm their relationships with the main chain at least annually (I assume they would anyway, but this would be a hard requirement).
You could blame me for trying to find a delusional post hoc justification for past actions and/or keep the circlejerk going, but I consider hoarding a deflationary currency like BTC a good thing. Why? Allow me to present you the following (simplistic) scenario. Suppose all money is replaced by BTC and everyone is a Gordon Gekko-like BTC hoarding sociopath. Eventually all hoarders HAVE to "unhoard", i.e. sell. You can't live on bitcoins. If you put all your possessions, savings and earnings plus your grandma in BTC, every day of the year, you would still need to trade some of those BTC for food and shelter - otherwise you'd be dead. So even the most greedy hoarders will have to exchange BTC for physical commodities and services. The economy will not suffer from a "hoarding to death" scenario - there will always be trade! HOWEVER, this has implications. Watching your bitcoins appreciate in value means you'll think twice what you're going to spend them on. Why buy a car once every two years when they easily last five years (the Japanese ones at least)? Why spend 2(?) BTC on filling up a Hummer when you can spend 0.5 on filling up a Prius? In a few years time, the 1.5BTC you save will not buy you 3 Prius refills, but many more (assuming the effort to make gasoline stays the same). So, I think a deflationary currency will lead to an economy in the true sense: one with an emphasis on efficiency (hence the term "economy"), not on consuming like there's no tomorrow; an economy where only the truly necessary spending takes place. This is, I think, why Bitcoin is successful so far: it encourages efficiency by making people NOT spend. (Note: spending != investing != speculating) Will this affect lending, investment, innovation, and ultimately human progress? Discuss!
Investors Cheat Sheet – community clarification requested, to be updated.
The following is for new investors
Please note, the following is a result of several hours of research in reading posts, an endeavour of time I hope to save the next possible investor and possibly add value to the community. It is written from the perspective purposely of a new investor reading, and attempts to cut through the noise and confusion of having the two coins, different perspective, etc. I ask the community determine what is correct for clarification and in turn I will update the information accordingly. I’m not an expert in DENT, but feel at this juncture that is an advantage because no assumptions are made.
Thank you to those whom have responded with answers, not rhetoric or FUD debates. ** Current update: Price per appDent is confirmed by the DENT Wireless LTD development team. Can someone provide a link to where that official statement has been made. Thank you.
Fundamentals Questions DENT investors view:
For clarification : name labels for reading purposes only
appDENT : 90bln Fixed - Mobile app use (only)
xDENT: 10bln Fixed - Crypto Trading Exchange use (can be transfer to app one way only)
Points to consider:
appDENT is to be set to xDENT + a margin (statement of DENT co-founder mikko) (*Update pending see below)
This price adjustment of appDENT will not occur in real time. >"The mobile app prices are reacting slowly to the market prices, these manipulative dips will not be caught in real time, the mobile users would be confused by the rapid changes" - Mikko https://imgur.com/lLLPiE6
Price per unit of appDENT is NOT connected in any way to the price of xDENT
appDENT price is set by market price of mobile data (competitive market)
xDENT price is set on exchange market price (trade)
Assumptions of profit:
DENT Wireless LTD (company) provides a service, which will grow with the use of the DENT application.
xDENT will rise based on investors interest/faith of the company.
Issues with those assumptions:
xDENT is not a share in the company (no dividends for example).
DENT Wireless LTD success does not equate to a higher value in xDENT based on this above point.
xDent is not a commodity (product vs. service). A commodity demonstrates utility value (water).
No comparison to bitcoin as a store of value(xDENT is not mined)
No comparison to xrp as a transfer of value (unless xDENT is used as appDENT which is possible). For those who aren't very researched in XRP, strongly suggest you disregard many "pump" comparisons (XRP = % up, therefore DENT = % up)
xDENT can be used in app, however based on the human nature's need for simplicity of availibity, immediate satisfaction, ignorance, the majority will not buy from the exchange (assumption).
Advantage (as I can see, looking for clarification)
If buying xDENT now and it appreciates, equates to getting data cheaper at a future date.
appDENT received in exchange for data, can only be used for data, not be exchanged into fiat.
DENT Wireless LTD when asked what the plan is for future use of xDENT was "you can use them for filling up your Dent data in the app". No other future uses specified.
xDENT value may rise when in appDENT are in demand (shortage) only to be reset in the event of a resupply.
Persons of interest:
Mikko Linnamäki, Co-Founder DENT Wireless is backed by Mikko Linnamäki, Internet pioneer and serial entrepreneur with a track record of founding successful Internet businesses since 1994. Mikko, also from Finland, is Co-founder of DOVECOT Oy, the company behind DOVECOT, the world‘s most popular IMAP Server with a world market share of 72% and over 4 million installations. An estimated 2,5 billion users are entrusting their Email storage to Dovecot every day. Mikko recently received a patent for his invention "Ad Hoc Injection of IMAP Objects".
*Question of price:
If appDENT is to be set to xDENT + a margin, that would result in the price of data being determined by the exchange, not by the market in which that data is being purchased. It's been proposed that if the value of xDENT exceeds, what the mobile market is willing to pay (xDENT = appDENT - margin), would that not undercut its viability? As commented below, appreciation of DENTs price means you can buy more data with one DENT, it does not mean that dollar price of data is going up. This leads to the next question then, what will then the price of xDENT be determined upon? Whitepaper:
"The amount of DENT available will not increase, this might cause the value of DENT to appreciate due to increased demand, the supply being fixed. With DENT being the token in the mobile data space, the rate of appreciation might follow the size of the mobile data market traded in DENT."
*Question of target market:
Several have suggested the target market is those countries without access to unlimited plans or a complexity exist making it difficult to access data. Based on the rule of accessibility or simplicity DENT would be used instead. The question: Is there multi-language support for DENT, and if not when will that be included?
Why aren't we using Ripple as an exchange instead of MtGox?
According to ripple.com: "The Ripple currency exchange system is ad hoc and distributed so you can make trades yourself between BTC and USD, GBP, or any other currency. The platform doesn’t require you to go through any central exchange but makes buying and selling Bitcoins free and easy." This makes it sound like the perfect fit for Bitcoin. A decentralized exchange for a decentralized currency. I must admit I don't understand completely how it works, and not that many people are using it - but maybe if more did, it could help alleviate the pains of relying on central exchanges (MtGox in particular) for everything? What do you think?
Here is a transcript from the Ripple Consensus Presentation (May 22nd)
https://www.xrpchat.com/topic/5203-ripples-big-demo-and-why-you-missed-the-big-deal/?do=findComment&comment=49659 MY TRANSCRIPTION... 0:19 PATRICK GRIFFIN: All right I think we're gonna get started. There's total capacity. People at the door - there's a little room over here inside. There's chairs here - there’s chairs over here don't be shy. All right in case you don't know this, you are in “XRP In Action,” a live demo and expert Q & A. I’m Patrick Griffin [with] David Schwartz and Stefan Thomas. We've got an hour today. We'll walk you through, we’ll do a quick round of introductions. Stefan is going to do a demo. We have a self-guided Q&A where I basically tee up some questions for these guys that will all be softballs don't worry! Then we'll turn it over to you guys to ask questions for the technical experts. Maybe we'll do it the quick round of intros, starting with Stefan: 1:07 STEFAN THOMAS: Yeah so, my name is Stefan Thomas I am CTO with Ripple. Before Ripple I was involved with BitCoin for several years and now I work on the vision and technical direction for Ripple. 1:22 DAVID SCHWARTZ: My name is David Schwartz. I'm the chief cryptographer at Ripple. I’ve been working on Ripple since 2011 and public ledger tech. Before that I was working on cryptographic messaging systems and cloud storage for government and military applications. 1:35 PATRICK GRIFFIN: I am Patrick Griffin. I’m the head of business development. I don’t know why I’m up here, but there’s our CTO and our head of cryptography, but actually I think we are the, to be honest here, I think we are the, we are the one two and three first employees of Ripple. Well, two one and three. We've been here for quite some time and it's been a long journey. So why don't we first start off with the demo and I think I'll tee it up: This is a demo that demonstrates our technical our technology start of the inter ledger protocol, moving payments in and out of XRP and Stefan will do a better job of articulating what you are about to see. 2:22 STEFAN THOMAS: All right thanks Patrick. So here we're gathered to have a quick round table on XRP. I want to go through the demo pretty quickly so we can get to the actual discussion Q&A which I thin is the meat of this session. Basically, what we're trying to do at Ripple is we're trying to make money move like information. This has been our mission since day one, and it has never changed and so we're building a number of different technologies that all integrate to make this vision a reality. And so what we think about how information actually moves I think it's really it's really this chart that captures it. So what's happened is that the cost of moving information has really declined over the last couple decades and very strongly so. And as a result the volume of information that’s been moving has exploded. And so, very often you know, our customers will be talking to me about, you know: Oh are you focused on corporate payments? Are you focused on consumer payments? I think what you have to realize is that we're somewhere down here in that curve and so you know when you say like two-thirds of all payments are corporate payments you're really talking about two-thirds of almost nothing. I think what we're focused on is this growth that you can create if you increase the efficiency of the system enough. And so the way that we're kind of approaching that is we want to streamline the way that liquidity works today. So today you have 27 trillion dollars in float sitting around the world that is essentially there to facilitate real-time payments when the underlying systems are not real time. 3:59 STEFAN THOMAS: So, for instance, I swipe my credit card somewhere there has to be an actual creditor or money available to pay that merchant if that's supposed to happen instantly if the underlying money can't move in real time. And so that's been the case ever since we were using gold and fiat currencies in order to move money internationally, but with digital assets there's actually opportunity to improve upon that and actually move real assets in real time. So if you have something like XRP you don't need to pre-fund float all around the world. You can actually just have this digital asset and if you want to transfer value to somebody, you want to transfer value internationally, you can just transfer that asset and that moves instantly okay? 4:40 STEFAN THOMAS: So that's really the improvement. So with that I want to give you sort of a case example in a demo. This is something that already happens on blockchains today where there are money sources business that are using, businesses they're using block chain in order to move funds so they might sort of offer this as a service to small and medium businesses where if I want to let's say pay somebody in a different country I can go to one of these companies and they will move that money for me. 5:09 STEFAN THOMAS: So, in this example, we're kind of pretending that we're a publisher, we have a reporter in the field. and we’d like to pay them. And so, you know we don't really build apps, but we enable banks and other money service businesses to build apps on top of our platform. So this is kind of a mock-up that we’ve developed where, you can imagine, this would be just built into the the particular app of that company. And so I can basically pick any amount, so let’s say I want to send, say $7, and what happens is that you can see is that amount updates so what happens during that time is that we actually try to find the cheapest path from where the sender is to which are provided at the recipient uses and then once we found that cheapest path, we figure out what the exact cost is going to be, so we have that transparency upfront. What is the cost of this payment and this is all powered by the open source protocol InterLedger. Now, when I send this payment, it goes through right away. I don't have to wait for a ton of confirmations and so on. 6:11 STEFAN THOMAS: So let's talk a little bit about what is happening there in the background. So first, we basically look at the topology of the network and then we try to find a path. So say it found a path through XRP. Once we select the path, we basically send a code request to figure out what we think that cost is going to be and then we send the money through in two phases as per InterLedger Protocol, and that's enabled on XRP using a feature called escrow that we just launched earlier this year and so now XRP is it's fully InterLedger enabled. 6:50 STEFAN THOMAS: So, if we look at the kind of a cost calculation, this is kind of some fictional numbers but it's correct in terms of order of magnitude, right. So you have Bitcoin, you have Theory, we have XRP, we have Swift, and so our algorithm basically goes in and it tries to select the best option and so people often ask me like why does InterLedger help XRP? or why are you guys working on InterLedger as a completely neutral protocol when you actually have this vested interest in XRP? 7:18 STEFAN THOMAS: Well, because the reason is that XRP is right now by far the best digital asset but it's not being used as much as Bitcoin, for instance, and so in order to close that gap we want to get to a point where the selection of asset is kind of automated and you have algorithms to just pick the best one in which case, right now, XRP would get picked all the time. So that's why we have such a vested interest in just enabling more efficient selection. All right. So as you can see, it's the lowest fee right now and it’s the fastest turn right. 7:48 STEFAN THOMAS: Now, going a little bit further into the future, I was kind of talking about that huge explosion in volume and I think where that comes from is completely new user inter faces that we don't necessarily think about today. So one example would be, you have something like a publisher and a reader and a reporter and the reader is actually browsing an article and they're not having to sign up and go through a paywall in order to do that Their browser just pays them on their behalf automatically and then as a publisher I can see the money sort of coming in, in real time as users are browsing my website. And so you're basically providing the sort of metered access to your content. There's just one example. I think there's a lot of cases of APIs and other parts the industry that could benefit from micro-payments as a more granular way of transacting. So I don't have time to talk about that, but with that I hope you've got sort of a taste of both what XRP looks like today as well as what the future holds in terms of doing micro payments through payment channels, and so on, on InterLedger. So with that, I'll hand it over to Patrick to start the discussion. 9:00 PATRICK GRIFFIN: Very cool. So maybe it’s worth stepping back and also looking at our company strategy and having a conversation around what it means when we talk about an Internet of Value, which I think well this is a Silicon Valley company and for most people that doesn't mean a whole lot so maybe we can take a first stab at trying to explain what is an Internet of Value and Stefan, I’ll start with you. Actually, why don’t we start with David and give you a break. 9:24 DAVID SCHWARTZ: Yeah, so what is the Internet of Value and what are we working on? Well, the Internet has brought connectivity to billions of people around the world. They have smart phones. They have easy access to the movement of information but money is still siloed. It's still trapped in systems that don't talk to each other. Moving payments are expensive. They're slow. There's high friction. There's trillions of dollars that moves across borders and that's moved mostly by financial institutions, and we need to move that money more efficiently. We need to know where it is. We need to improve that flow. 10:02 DAVID SCHWARTZ: I don't know if any of you have made international payments or most of you have on traditional systems and you know that it's very hard to know where that money is. It’s very hard to know how much it's going to cost you ahead of time. The user experience is not great. A significant fraction of those payments fail. It takes several days. It's almost easier to ship money than it is to use our existing payment system. So we want to provide an Internet of Value where there is instant payment. Payment on demand, without failure. When you know ahead of time how much money is going to deliver. You know what path is going to take and because that transaction is set up using modern internet protocols you know ahead of time exactly what the requirements are at the destination so you don't have a failure because you didn't have the right information at the beginning. 10:45 STEFAN THOMAS: Yeah so um whenever I think of the Internet of Value, I think the number one thing that happened with the internet was that it kind of commoditized reach. So, before the Internet, if you wanted to be an online service provider like AOL or CompuServe the number one thing that you needed to have in order to be competitive is a lot of users. And if the main thing you're competing over is just having a lot of users it's very hard to get into that market for obvious reasons because you start out with zero users so how do you attract the first couple? But once you have something like the internet where all the different networks are actually tied together, suddenly the number of users you have is completely irrelevant, right? Because all of the networks are tied together you can reach all the websites, you can email all the people on the internet and so the competition has to be about something else and what does it become about? It becomes about about the efficiency of the system. 11:35: STEFAN THOMAS: And so, this fundamental transition has not happened with money yet. Like right now the the biggest consumer payment systems are things like Visa and MasterCard and they're very much competing on: We’re the biggest. We have the most merchants. We have the most customers, and so how are you going to compete with us, right? We would not even have to try to be efficient, necessarily, right? Because we're only competing with each other. It's very hard to get into that market, and so what we're trying to do with InterLedger, by creating an internet working protocol we're allowing you to go across multiple hops across multiple steps through the financial system and as a result you can tie a lot of smaller providers, a lot of smaller banks together and as a result make a system that’s much more competitive. 12:15: PATRICK GRIFFIN: I’ll just add my two cents in. I when I talk about the Internet of Value with customers it's typically the conversation on the cost and opportunities and for us you know, one of the analogies it's overused in the internet I think the Internet of Value, at least for me, is the function of bringing the marginal cost of payment processing down to as close to zero as possible. Now you can do that in one of two ways: Lower the cost of payment processing. Just for the sake of conversation these two things are 50/50. Payment processing: the messaging going between institutions and the cost of reconciling transactions as they go from one siloed network to another siloed network. Those are huge costs that the system currently bears just as a function of tracking down lost payments or fixing mistakes and broken transactions. 13:00 PATRICK GRIFFIN: Something like 12% of all international wires fail. That is an astonishing number if you come from Silicon Valley where you're typically used to five nines of reliability. The financial system isn’t working even with one nine of reliability. The other side of the equation so that it’s a processing function. We are able to achieve better processing by starting that sort of settlement layer, it’s a little bit academic, but then ultimately what our customers are buying from us today is just a payment processing capability. 13:30 PATRICK GRIFFIN: The second stool, leg of the stool, if you will, this two-legged stool, for this Internet of Value, is liquidity. And this iquidity cost is a huge component of the payments that infrastructure today. And so, when you think about the cost that you pay when you wire money internationally, it's not just processing costs and fees. Banks and financial institutions and payment processors have to cover their cost of capital. They are laying out a massive amount of cash in different overseas accounts to make sure that when you send a payment to Japan there's cash on hand in Japan to service your payment. 14:05 PATRICK GRIFFIN: The whole visual that we saw here with XRP that's really where we see there being a large opportunity to bring the liquidity costs down if you can fund your payment instantly on demand without pre-floating cash or opening up credit lines with your counter-parties you can really bring down this component of that cost so those two things together in my mind at least that's that is what really comprises the internet of value. You tackle those two things: processing and liquidity really starts to open up and level the playing field. And on leveling the playing field maybe a question back to you Stefan is and a little bit about the strategy so as we go out and roll out these new APIs for bank to bank or financial institution processing, this narrative around using the digital assets upon payment certainly there's no reason why you couldn't insert Bitcoin in there or Etherium or some other digital assets do you view this as maybe leveling the playing field for all digital assets and creating an opportunity for other digital assets to come in and basically compete for that case? STEFAN THOMAS: 15:12 Yeah so, we definitely look at it as as a way to create more competition I think that I'm just looking at the market today, most of the digital assets out there are not really designed for enterprising spaces, right? There they're coming from a background of direct to consumer use. They're kind of designed in a way that maybe isn't always necessarily totally in line with how regulators think about the financial system and as a result it’s quite difficult for companies to use these assets, so I think maybe some of people in the room are Bitcoin entrepreneurs and so you may know some of these struggles and you know some of these difficulties of using an asset like Bitcoin. I think you know me, speaking as CTO, more from the technical side, there are definitely big differences between the different digital assets, and so if you look at things like settlement speed on Ripple you get below four seconds most of the time four seconds on average. On Bitcoin you have to wait nine minutes between just to get one confirmation. 16:14 STEFAN THOMAS: There's things like finality. On Ripple when you get one confirmation you can hundred percent trust it, it cannot get reversed because the set of validators that are known so it can't be some validator you've never heard of suddenly coming up with a different answer. Whereas on Bitcoin, there can always be a longer chain that you just haven't heard of yet so you have to wait for multiple confirmations to gain more confidence. Another difference is that you know Ripple is non-deterministic and so bitcoin is is random so what that means is that the actual delay between blocks on Ripple is pretty consistent. It's four seconds with the standard deviation of 0.8 seconds so it's almost always exactly four seconds. And so, with Bitcoin it's more variable, right? So you could have a block after a minute. You can have a block after half an hour. And so, it's much harder for businesses to kind of rely on a system that has that high variability because it increases your risk as you holding an asset. 17:12 STEFAN THOMAS: So these are just some examples of why we think that XRP is best suited for payments use cases. And I think I'll give, be giving a talk later today on on going into a bit more depth on some of these differences 17:28 DAVID SCHWARTZ: And and we're not afraid of a level playing field. As Stefan said we think we can succeed on a level playing field but also you can get people to build a level playing field. It's very hard to get other people to stand behind something that has a built-in bias in favor of one company. Twitter doesn’t, it doesn't mind the fact that the internet wasn't built for Twitter. Facebook doesn't mind. They like the fact that there's an open platform that everybody can support and use and they're willing to compete on that level playing field and if they lose on that level playing field you know, so be it, somebody else will win and the world will be a better place for it. We believe that we have the advantages today and we believe that we can get the industry behind an open standard that facilitates these types of instantaneous payments. 18:07 PATRICK GRIFFIN: So David, this is a question coming back to you. In this level playing field obviously there are digital assets can compete on different characteristics. Obviously I think that Bitcoin as scalability challenges have been I think very famous recently could you comment a little bit on Bitcoin’s recent lows some of the things that have come up around resiliency scalability and maybe draw a contrast to XRP and how XRP is working. 18:32 DAVID SCHWARTZ: Sure. I think the idea that you don't need governance. The idea that you can just have this decentralized system that magically government itself doesn't really work. The internet is a decentralized system it has governance. Bitcoin currently is experiencing a little bit of a governance failure due to with dis-alignment of incentives. Historically the minerss have had an incentive to keep the system working. Everybody needs the Bitcoin system to work, whether you hold, whether you try to do payment’s, whether you're mining. This system has to work or nobody has anything. Everybody's benefited from the value of Bitcoin going up. If you’re a miner, you want the value to go up. If you hold Bitcoin, you want the value to go up. If you're using it for payments having more liquidity and lower risk and holding bitcoins is good for you. 19:11 DAVID SCHWARTZ: So everybody's incentives were aligned. They're starting to become dis-aligned recently because miners have been getting a lot of revenue from transaction fees Miners like high transaction fees. Users obviously would prefer to pay less for their payments. People who want to use Bitcoin as a payment platform want frictionless payments and they're not getting them because of the fees. So there's been a little bit of a governance breakdown due to that misalignment of incentives and it's not clear how you resolve that. It's not really clear how the stakeholders can realign their incentives. 19:39 DAVID SCHWARTZ: I’m confident that Bitcoin will come out come through it but I think it shows that governance is important. You should understand how a system is governed whatever system it is because there is going to have to be governance. It’s not going to magically govern itself. Now Ripple, the stakeholders are the validators and the validators are sort of chosen by the other validators, so right now Ripple is obviously very big in that space. We’re the major stakeholder on the network, but the recent interest into the price increase has begun diversifying the stakeholders and so we hope to see different jurisdictions, different companies and those will be the people who will be the stakeholders and they'll make the decision if there are going to be changes in the rules behind in that market. We think that that will work better and I think if you, once you accept that there has to be governance, you really want it to be the people who are using the network. You don't want the technology to force you into having other stakeholders whose interest may be adverse to the people who just want to use the system to store value and make payments. 20:32 PATRICK GRIFFIN: So what stuff, I mean do you have anything to add just in terms of the underlying design of the systems and how they're confirming transactions? I think when you go way way way back to our company's beginning it was billed as Bitcoin 2.0. And you know we felt like there was another way you could build a decentralized digital asset without without mining. So maybe talk a little about the confirmation engine behind XRP and some of its advantages over other systems 21:04 STEFAN THOMAS: Yeah, so as I mentioned in the introduction, I was fairly involved in the in the Bitcoin community back in 2010-2011 and one of the features that I contributed to was paid to script hash as a reviewer it was one of the first people to re-implement Bitcoin and I pointed out some flaws and you know we ended up with a much better solution. And so, through that experience going through the cycle of new feature on Bitcoin, even back then when the committee was much smaller I realized that it was actually very painful to do even a uncontroversial improvement to the system and that was partly because people had a very strong tendency to be conservative which is a good thing, for any, like whenever you're modifying a live system. But there was also just like no good process for introducing changes. 22:00 STEFAN THOMAS: We had to come up with a process ad hoc. We came up with this whole voting on mining power and so on. Now, from that experience I remember going back to a wiki page on the big part of working called the hard fork wish list and I kind of looked at and is sort of the list of things other things that we wanted to do and a lot of them were in my opinion, in my humble opinion, must haves for any kind of mainstream or enterprise adoption and so I was kind of like putting numbers next to them like this would take eight months this would take 12 months this would take two years and it started to add up like I'm not going to see this get to that point if we go at this rate. 22:38 STEFAN THOMAS: And then you know Ripple approached me and they had a lot of that hard fork wish list already implemented but maybe more importantly they had a different idea on the governance structure and I think there's sort of two key differences: The first key difference is there is an entity that's actually funding the development of the asset and all the technology behind the asset. And so you know, I was looking at the Bitcoin foundation website the other day and they're currently, their most recent blog post is to promote this lawsuit in New York to try to strike down the bit license and apparently the foundation feels that it's strategically important for Bitcoin to kind of fund this lawsuit and they looked at how many people had actually donated to the donation address that they were giving and it was just over a thousand dollars basically. Almost nothing 23:31 STEFAN THOMAS: And I was thinking like well if XRP you know had any strategic issue like that there would be millions of dollars immediately that just Ripple would put behind the issue and so as a holder of the asset that's really important for me to know that, you know, there is some some entity that's actually defending it from a technical standpoint, from a legal standpoint, from a business standpoint. That makes a big difference 23:53 STEFAN THOMAS: And then the second big difference that I saw was how features and how generally the evolution of the technology is managed. So on Ripple, there's voting among the validators, which is not too dissimilar from you know the kind of mining voting that we're doing on Bitcoin. However the validators on Ripple are largely chosen by the users or they are chosen by the users. And so they're not chosen by so this algorithm or just by their virtue of being very efficient in mining. And so as David pointed out earlier, the incentives are very different. On Ripple, the incentives are you know I want the people who are appointing me to be validators to be happy with my validations because otherwise you know there's what they will stop paying me. And so you know there's a much more closely aligned incentive for the value of some Ripple to do what the actual users want to do. 24:46 DAVID SCHWARTZ: And I would add that there there are sort of vulnerabilities in both types of systems. Like with the miners, it would be a double spend. With the validators, they could simply stop validating and the network would halt, but one tremendous difference is that you know how to fix one and it's not clear how you would fix the other so if you had the miners that were being pressured, let's say by a friend in government, or they were double spending or for whatever reason they are holding transaction fees high, let's say the block size issue got to the point where it was absolutely critical and there was no ability to come up with an agreement. It's not clear how you solve that. You change the mining algorithm? Like that's the nuclear option? Nobody knows what you do. With the system on consensus it is clear what you do. You can, you can change the validators. The validators work at the pleasure of the users, the holders, the real stakeholders of the network. 25:33 DAVID SCHWARTZ: That, I think that is a fairly significant advantage once you realize how important governance is. And it's not just a handle of failure as Stefan pointed out there's going to be evolution of the system unless you think the systems are absolutely perfect today. Well bitcoin is already proven that there they're not absolutely perfect today. I can’t, I certainly wouldn't try to claim the Ripple is perfect today. We have a wish list of features too, limited by engineering time, but we have to get people to agree to implement those features and I think that's also an argument why you can't have one blockchain to rule them all. There are features that also have costs and every feature has a cost because if you have a public blockchain everybody that uses that public blockchain, at a minimum, when there's a new feature they have to do a security review and make sure that that feature doesn't create a vulnerability for them. So there's a fixed cost that's fairly high. There's a huge bug bounty on Bitcoin and on Ripple right? Billions of dollars if you could steal money on the system. So the cost to implement a feature is high. So if there's a feature that somebody really wants it would be really useful for them they're probably not going to get that's not enough to get any feature on the system, so you're going to have a diversified system of multiple block chains and multiple ledger systems of all kinds competing with each other for share. that's why I think InterLedger is important because InterLedger will permit people who use different block chains and different systems, for good reasons, to be able to make payments to each other quickly seamlessly and without the risk associated with little pays problem. 26:53 PATRICK GRIFFIN: hmm Maybe just a last question before we turn it over to the audience and you've mentioned InterLedger. Stefan is the creator of InterLedger or the chief architect of it. When you walk around the conference today, you'll see a lot of companies that have blockchain offering. So, sort of going back to 2014, now if you remember, the the terminology and the marketing was all about it's not about Bitcoin it's about the blockchain. And so now we have some sound perspective on that. What's your take on the fundamental premise of a de-centralized distributed database without a digital asset and what's the trade-offs in terms of functionality versus utility? What's your opinion given the architecture IOP. 27:42 STEFAN THOMAS: Well that's a question I could easily spend hours on, so let me try to summarize. So as you mentioned, my colleague Evan Schwartz and I, we we came up with this protocol InterLedger and that came out of actually in a couple of different work streams but one in particular I remember was I was trying to figure out how to make Ripple more scalable and I was thinking about a particular kind of scalability which is similar to what David just mentioned, which was scalability in terms of functionality not just in terms of how many transactions can you do per second. Like how do I serve very different use cases that have you know mutually conflicting trade-offs. So as I was thinking about that problem I was kind of saying well maybe you don't even have to keep that one set of global state. Maybe you can have state in different places and a lot of that is honestly just rediscovering database knowledge that we've had since the 70s. Now just looking at Jim Gray's papers and just oh yeah that works for blockchains too 28:41 STEFAN THOMAS: So we took those ideas and we combined them with ideas around from the internet from the internet background in terms of networking and the concept of internet working and so on. And so, when I look at these private blockchains type approaches I think they are doing the first of those two steps namely they're applying sort of modern data, modern database thinking or classical database thinking to blockchain but I don't think they're really applying the Internet thinking yet because they're if they're attempting to achieve interoperability just by homogeneity which does not give you that diversity of use cases and so if you want that you have to think about what are the simple stateless protocols they can actually tie these different systems together without dictating how they work internally. So I can have my private blockchains that has all these like special features and it works in this way and you can have your private box and it works in the other way but we can still talk through a neutral protocol and you know the way that we're thinking about InterLedger, we're not married to InterLedger being a thing like I'm completely happy if it's lightning or if it's something else but I think as an industry to agree on some kind of standard on that layer. 29:51 STEFAN THOMAS: I think one of the reasons that we can is because unlike a blockchain a standard is neutral you know there's no acid anyone's getting rich off of. There's no there's a lot less to agree on. The list of decisions you have to make is a lot shorter. You know my colleague Evan, he makes a point, a very good point about with InterLedger only like seven eight major decisions that you have to make in the architecture to really arrive at it and so I think we have really good reasons for each one of them and so we think that there will be a certain convergence on on one standard protocol for again not just blockchains, but like any kind of ledger. 30:26 DAVID SCHWARTZ: I just ant to add that InterLedger is completely neutral to how the ledger works internally. Any ledger that can support a very short list of very simple operations. Every banking ledger can perform those operations. Almost anything the tracks ownership of value of any kind is capable of confirming that value exists, putting that value on hold, transferring that value between two people and those are the only primitives that InterLedger builds on. It's just by the clever combination of those operations in a way that provides insurance that all of the stakeholders get out of the transaction the thing that they're supposed to get out and get back whatever they were going to put in if they don't get out what they're supposed to get out. It’s, it's astonishingly simple at the protocol level. 31:08 PATRICK GRIFFIN: Okay, with that I will turn it over to the room for questions and some Q&A Aany questions in the back? QUESTION: Yeah, I’m kind of new to this and I just have some really basic questions. I read something recently where, Ripple was now the second most funded, or invested. Bitcoin was first, and Etherium was third. Can you tell me how you got to that position? You seem like you’re poking up about Bitcoin and how Ripple probably is more efficient and better. Then I had a second question - Where do I get a Ripple T-Shirt? 32:06 PATRICK GRIFFIN: The first question is how did, how did we get to this position we're in and does that generally capture the essence of that question and then Ripple t-shirts I'm not sure about that (Come work for us!) I will attempt to answer the first question and if you guys want to jump in. I think that is a function of one: Silicon Valley companies do one thing I think very well, they pick a lane and they go deep on it. For us, what we've been very very focused on it the use case. as a company we but we picked a long time ago to go deep on cross-border payments and in particular wholesale cross-border payments that’s financial institution to institution. It’s at the enterprise level and so when we look at digital assets today we think that there is a very very very use case around the consolidation of capital to fund payments overseas, which is exactly what we just demonstrated. Being able to transfer an asset from a server in one country to a server in another country and basically allow for payments companies to operate with much less capital deployed overseas. It's a, it's a quantifiable use case. Today there's 27 and a half trillion dollars in float in the banking system just wait sitting idly waiting for payments to arrive. That's compounded when you go to look at corporates and you look at payment service companies. So there's a very very very very very big number and I think that the recent traction that we've gotten has been an acknowledgement of the use case how it fits into our overall product offering. Ssome of the technical benefits of XRP itself and then when you look around, I mean I think that its head, you're hard-pressed to find another digital asset with as clearly articulated the use case that where the time horizon is now. I think there's lots of really exciting things going on in IOT and device-to-device payments and sort of the future some of things that I that Etherium people talk about for example, but it still feels like it's still at the horizon and I think this is being deployed today. There is a a path to commercial production and ultimately I think that's part of the reason why we're getting some traction. 34:18 DAVID SCHWARTZ: I think we also sort of crossed an important threshold. If an asset doesn't have value and it doesn't have liquidity you can't really use it even if it has the properties that are perfect for your use case simply because you can't you can't get enough of it without moving the market and I think we crossed a threshold (not the end) - *use the link above to view the entire transcript.**
News und Wissenswertes zum Thema Kryptowährungen, Blockchain-Technologien, Investment und Kursanalysen. Die Welt von Bitcoin & Co. - schnell erklärt. Bitcoin is one of the biggest buzzwords in the financial space, but many people don't know how to buy the leading cryptocurrency, a task as simple as downloading a mobile app. To understand Bitcoin, it is important to understand Bitcoin mining, which is the process by which Bitcoin are created. While mining is complex, the basic idea is that each time a Bitcoin transaction is made between two people, the transaction is logged digitally by computers in a transaction log that describes all the details of the transaction (like the time, and who owns how many Bitcoins).  Bitcoin.org is a community funded project, donations are appreciated and used to improve the website. Make a donation Coinspeaker Palantir Set to Go Public via Direct ListingPalantir Technologies is set to get its public listing on the New York Stock Exchange by the end of the month. The firm has chosen the Direct Listing process.Palantir Set to Go Public via Direct Listing
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