As many people here know, my interest in consensus mechanisms runs far and wide. In the KPMG research report I co-authored “Consensus: Immutable Agreement for the Internet of Value”, many consensus mechanisms were discussed. In Appendix 3 of the paper, many of the major players in the space discussed their consensus methodologies. One consensus mechanism which wasn’t in the paper was the Swirlds Hashgraph Consensus Algorithm. That whitepaper is a great read and this consensus mechanism holds quite a lot of promise. I have had many discussions with its creator, Leemon Baird and this blog post comes from conversations, questions and emails about the topic. Also at the end of the blog I asked Leemon to fill out the consensus questionnaire from the KPMG report and he graciously did. His answers appear at the end of this post.
We decentralists are committed to keeping blockchains open, neutral andimmutable. We’re committed to keeping blockchain systems decentralized. This informs all our actions and positions towards any developments in the crypto world and beyond. All attempts to violate any of the key blockchaincharacteristics should be fought. All changes to a blockchain’s rules thatintroduce new centralization risks or strengthen existing ones should be fought. Only developments that are clearly beneficial to decentralization or strengthen the three key blockchain characteristics should be supported and encouraged.The blockchain revolution won’t be centralized. Let’s make sure of it.
Over the past year, we have been working on a set of tools to issue, display, and verify digital credentials using the Bitcoin blockchain and the open badges specification. Today we are releasing version 1 of our code under the MIT open-source license to make it easier for others to start experimenting with similar ideas. In addition to opening up the code, we also want to share some of our thinking behind the design, as well as some of the interesting questions about managing digital reputations that we plan to continue working on.
The anarcho-capitalist incentive method is a bypass of societal payment systems. It allows bitcoin billionaires to make a fortune with crime and speculation on crime, or alternatively speculation on speculation on crime, without ever being traced (except maybe by the NSA), nor taxed.
Let me explain this reasoning in more detail, so you can let me know if any of it is wrong. All of the societally harmless uses of Bitcoin and Ethereum can be implemented in a safer manner using TALER, without bypassing the tax system which is, as flawed as it may be, the only instrument society has to redistribute from the wealthy to the poor. Without such a redistribution, the capitalist architecture collapses and humanity’s ability to exist on the planet dies with it. If everyone just cares about themselves, a future comes when the rich get chased by pitchforks while global challenges such as pollution and climate change would not be tackled by anyone.
Censorship has a long history and is practiced in many societies. There have been book burnings by fascist regimes, religions censoring texts, and even social media is being monitored and censored by governments. Uncensorme.xyz is a decentralized, censorship-free communication platform that runs on blockchain technology. The inherent immutability of the technology allows us to store messages in the massively shared and spread database that is the blockchain. Any data stored in the blockchain is permanent, and therefore free from any form of censorship. Information wants to be free. Uncensorme.xyz is not only here for freedom of communication, but also the preservation of information.
Dark web finds bitcoin increasingly more of a problem than a help, tries other digital currencies 13 Hours Ago | 00:53Criminals are dropping bitcoin in favor of other digital currencies that are harder for law enforcement to use in tracking activities in an anonymous corner of the internet known as the dark web, analysts said.Although hard numbers on criminal activity in digital currencies are difficult to pin down, Shone Anstey, co-founder and president of Blockchain Intelligence Group, estimates that illegal transactions in bitcoin have fallen from about half of total volume to about 20 percent last year.
Just discovered an on-page advert was mining bitcoin in my browser.
Remember kids: always use an adblocker
— Published Author Adam O'Grady (@adamjogrady) August 29, 2017
Just discovered an on-page advert was mining bitcoin in my browser.Remember kids: always use an adblocker
Key Network StatisticsDescription ValueBitcoin’s current estimated annual electricity consumption* (TWh) 16.36Annualized global mining revenues $3,643,528,563Annualized estimated global mining costs $818,077,659Country closest to Bitcoin in terms of electricity consumption CubaEstimated electricity used over the previous day (KWh) 44,826,173Implied Watts per GH/s 0.322Break-even Watts per GH/s (based on 5 cents per KWh) 1.434Electricity consumed per transaction (KWh) 174.00Number of U.S. households that could be powered by Bitcoin 1,514,959Number of U.S. households powered for 1 day by the electricity consumed for a single transaction 5.86Bitcoin’s electricity consumption as a percentage of the world’s electricity consumption 0.08%
Bitcoin’s underlying technology, the blockchain, is widely expected to find applications far beyond digital payments. It is celebrated as a “paradigm shift in the very idea of economic organization”. But the OII’s Professor Vili Lehdonvirta contends that such revolutionary potentials may be undermined by a fundamental paradox that has to do with the governance of the technology. I recently gave a talk at the Alan Turing Institute (ATI) under the title The Problem of Governance in Distributed Ledger Technologies. The starting point of my talk was that it is frequently posited that blockchain technologies will “revolutionize industries that rely on digital record keeping”, such as financial services and government. In the talk I applied elementary institutional economics to examine what blockchain technologies really do in terms of economic organization, and what problems this gives rise to. In this essay I present an abbreviated version of the argument. Alternatively you can watch a video of the talk below. First, it is necessary to note that there is quite a bit of confusion as to what exactly is meant by a blockchain. When people talk about “the” blockchain, they often refer to the Bitcoin blockchain, an ongoing ledger of transactions started in 2009 and maintained by the approximately 5,000 computers that form the Bitcoin peer-to-peer network. The term blockchain can also be used to refer to other instances or forks of the same technology (“a” blockchain). The term “distributed ledger technology” (DLT) has also gained currency recently as a more general label for related technologies.In each case, I think it is fair to say that the reason that so many people are so excited about blockchain today is not the technical features as such. In terms of performance metrics like transactions per second, existing blockchain technologies are in many ways inferior to more conventional technologies. This is frequently illustrated with the point that the Bitcoin network is limited by design to process at most approximately seven transactions per second, whereas the Visa payment network has a peak capacity of 56,000 transactions per second. Other implementations may have better performance, and on some other metrics blockchain technologies can perhaps beat more conventional technologies. But technical performance is not why so many people think blockchain is revolutionary and paradigm-shifting.The reason that blockchain is making waves is that it promises to change the very way economies are organized: to eliminate centralized third parties. Let me explain what this means in theoretical terms. Many economic transactions, such as long-distance trade, can be modeled as a game of Prisoners’ Dilemma. The buyer and the seller can either cooperate (send the shipment/payment as promised) or defect (not send the shipment/payment). If the buyer and the seller don’t trust each other, then the equilibrium solution is that neither player cooperates and no trade takes place. This is known as the fundamental problem of cooperation.There are several classic solutions to the problem of cooperation. One is reputation. In a community of traders where members repeatedly engage in exchange, any trader who defects (fails to deliver on a promise) will gain a negative reputation, and other traders will refuse to trade with them out of self-interest. This threat of exclusion from the community acts as a deterrent against defection, and the equilibrium under certain conditions becomes that everyone will cooperate.Reputation is only a limited solution, however. It only works within communities where reputational information spreads effectively, and traders may still defect if the payoff from doing so is greater than the loss of future trade. Modern large-scale market economies where people trade with strangers on a daily basis are only possible because of another solution: third-party enforcement. In particular, this means state-enforced contracts and bills of exchange enforced by banks. These third parties in essence force parties to cooperate and to follow through with their promises.Besides trade, another example of the problem of cooperation is currency. Currency can be modeled as a multiplayer game of Prisoners’ Dilemma. Traders collectively have an interest in maintaining a stable currency, because it acts as a lubricant to trade. But each trader individually has an interest in debasing the currency, in the sense of paying with fake money (what in blockchain-speak is referred to as double spending). Again the classic solution to this dilemma is third-party enforcement: the state polices metal currencies and punishes counterfeiters, and banks control ledgers and prevent people from spending money they don’t have.So third-party enforcement is the dominant model of economic organization in today’s market economies. But it’s not without its problems. The enforcer is in a powerful position in relation to the enforced: banks could extract exor