“Why… I oughta merkleize ya!”
I mentioned Hogan’s Heroes to my son the other day who is in his late 20′s and he had never heard of them, so Dave would guess that more than 50% of his readers have never heard of Moe’s murdalizing ways on The 3 Stooges. Whether you can appreciate the finer points of nyuk, nyuk, nyuk or not, there’s a line being drawn in the sand known as the blockchain protocol.
In the tradition of you’re either with us or your with the terrorist stooges, the demarcation gauntlet has been thrown down and you’re either blockchain agnostic or token dependent. If you’re token dependent you may even take it one step further and be what Meher Roy describes as a Bitcoin Maximalist sidechain (which is presumably Blockstream exhibiting all the traits of a WWGT Larry Summer’s production).
Ethereum is the Angela Merkel of Bitcoin in the security/privacy debate which is expressed by the well worn presidential declaration of trust 2.0; ”The only people who don’t want to disclose the truth are people with something to hide.”
“Choice Architecture” and the Sunstein “Nudge” Doctrine expressed in terms everyone can appreciate and understand from the man who said “Beer is proof (of stake with steak) that God loves us.”
Make That 101 Bottles
When it comes to utilizing resources for recalculating merkle trees and slowing down processing time, Ethereum is the Guiness Stout of cryptofermentation. You could contrast this with Bitshares leveraging the trust of a mere 101 delegates and their servers that provide lightweight proof of stake and you’ve got the Miller Lite tastes not so great but most definitely less filling of Ethereum gas costs (burp). Pardon me.
What are the chances that a group of Bitshares delegates are going to violate your trust when that would result in the bums getting thrown out with the mop water (and therefore stop receiving payments)? Well, you may not see a direct correlation like Dave does, but your friends over at the Swiss National Bank did precisely that when they rolled back their credibility blockchain and took the global foreign exchange market for a ride. I can hear you now saying “But Dave, you can’t roll back the blockchain.” I realize that… but somebody needs to tell it to Federal Reserve Bank of St. Louis VP and research director David Andolfatto because…
“The way I view the Fed, and any institution, is it’s basically a computer program. Just like bitcoin, it’s an open-source computer program. You ask yourself, ‘What is bitcoin?’ It’s a protocol, it’s a computer program, it’s a constitution, it’s a law, it’s a legal code, it’s basically a constitution that governs the supply of its money and that governs the processing of payments.” David Andolfatto, VP Federal Reserve
Do you need a better example of a central bank reiterating their commitment to the Euro peg… not exactly, and then throwing the foreign exchange market makers under the Hertz bus… exactly? Saying one thing while doing another is exactly what blockchains are designed to prevent and the last time Dave looked, Central Banks Blue Ribbon reputation for truthiness is turning out to be Pabst-like.
“The central bank warned it is prepared to buy foreign currency in unlimited quantities to enforce the minimum exchange rate.” (not)
We all know what happened a few weeks following this CEOTweet.
— Christoph Lahrs (@CJOLars) January 16, 2015
So, what’s a beer tender to do? Pony up to the bar and prepare to pay up for a bunch of Ethereum gas so that you can have bulletproof security to avoid the double-spending of cat pictures, or put your trustless network in the hands of 101 trustworthy beershare drinkers that successfully lobbied the Bitshares community into upvoting them into Head Brewmaster status?
Dave admits it. I trust drunk people to guard over the trustless network of Preston Byrne’s Grumpy Marmot pet portfolio, but I’m not so sure that I want to trust the internet of money to 101 rapidly descending bottles of beer on the firewall when the next Swiss National Bank rings the Happy Hour FX bell. Then again, daylight’s burning and does Dave really want to build his own home brewery from scratch when the the convenience store of cryptography is open 24/7? Even Vitalik gave up on that.
So you want to, but you can’t do this asynchronously because you would have to do the entire process in ten seconds of real time to account for all the network changes. Alright, so who cares? Dave was just looking at his passport the other day when I realized it is expiring. A passport is a blockchain worthy thing-a-majig, so how long is Dave going to be waiting for the United States Postal Service to hash their blockchain and send Dave a new Proof of Bud? I guess it takes weeks… if you’re lucky with those little white Jeeps all crammed full of boxes from Amazon.com.
So… let’s use trust where it makes sense and don’t use trust where trust isn’t needed and for everything else we’ll go postal (as in Kony 2012). Let’s use speed where it makes sense and let’s let people wait whenever speed doesn’t matter. Just imagine you’re trying to settle on a house purchase using a next generation Factom solution to search the title. Do you really care if it takes 24 hours for the hash to hash its hash? Didn’t think so.
Do you want to pay Vitalik Buterin et al. so that you can have a completely secure hash of your local courthouse (which by the way would be out of business in this scenario) property titles in ten seconds? Didn’t think so. Would you enjoy seeing your local courthouse put out of business? Maybe… then again maybe not… at least not until we’ve completed a final hash of “God’s Laws” and “Man’s Laws”.
h/t Andy Perry – The United States of Everywhere there are cultural constituencies
Daniel Larimer makes a very important distinction about debt-based systems when he explains that there is a difference between trusting information and trusting someone’s ability to pay off a debt. Daniel says “banking can’t be trusted because it’s a debt-based system.” Dave has spent more than thirty years teaching people how to increase the topline revenue of their businesses and Dave can tell you the first thing he tells people; if you’re going to make a sales pitch, make it to someone with the ability to buy what you’re selling.
In God’s Law, we learn that He is no respecter of persons. In other words, God is not concerned with your ability to pay a debt because you can’t. That’s where Jesus entered the picture and that’s why there was an old covenant (think Abraham father many nations – 3 in particular that are killing each other) and a new covenant (forgiveness – not an ingredient of the blockchain). People on the other hand who are trying to sell to other people can beg and plead and bend over backwards beyond the zero lower bound and into the land of negative interest rates. In an attempt to pitch you4 wares, if the buyer does not have the ability to buy what you’re selling (or retire on a negative interest rate on their savings) you may as well be offering Free Beer Tomorrow because you’re not going to sell anything.
Daniel Larimer’s point (38 minute mark) isn’t lost on Dave. A debt that cannot be paid off will not be paid off. The other side of the chessboard is a mathematical certainty, but when you’re dealing with math-based assets you are unlocking the abundance of what otherwise appears to be a resource-based global economy. So which is it; Abundance or Scarcity? Tune in again and find out… but I digress.
So where exactly will Ethereum’s Lite Beer (lightweight validation) version fall on Meher Roy’s spectrum of beerlievers in Guiness Stout and the Pabst bathwater? Meher predicts that the blockchain agnostic sweetspot (FREE BEER TODAY!) is the winner in an increasingly crowded space occupied by the likes of his Hyperledger, Eris Industries, Codius and Ripple/Stellar (see below). If time is money and security is a priority because you don’t trust the folks in your network then be prepared to pay up. Then again, if the beer tender trusts you enough to put it on your tab, then time may still be of the essence, but trust is of no concern, until such time as you’re entirely tapped out.
“You always have the ability to tell the truth, but you don’t always have the ability to pay someone a debt.”
Daniel Larimer – Invictus Innovations
It’s tough to argue with Daniel’s tastes okay… less filling transactional model and the significant funding of development without creating an intolerable bill payable to the local power company is downright buzzworthy. Is it legal? Dave’s pretty sure that Daniel has covered the tax issues quite thoroughly, but I’m not so sure that he’s didn’t blow past the legal limit on the securitization issues. What’s the mechanism for lending assets into existence backed by bitshares equity itself? Feels alchemical to Dave, but I still like it. What liability might the delegates have in their agency role? I’d been interested in hearing your thoughts.
If you’re looking to take advantage of everything the blockchain has to offer, but you don’t want to buy a bunch of rapidly depreciating bitcoins (never say never) so that you can get started, then you may want to consider both what Eris Industries and Invictus Innovations Bitshares have to offer (beyond a resettable website countdown clock). We’re even looking forward to discovering more about MaidSafe.org in the near future. There are options for creating your own Distributed Autonomous Organization or running in an instance that already exists and then converting at a later date and designing parameters that are suited to your strategic objectives while allowing for flexibility in the future.
If you’re ready to learn more about The Blockchain For Business, make sure to sign up to receive information about our Blockchain For Business online seminar. If you like, you can even enjoy a beer during the seminar, just remember to sing responsibly. Click here.
The Fed’s Bitcoin Strategery 2.0: https://www.cryptocoinsnews.com/federal-reserve-bitcoin-strategy/