A Brief History of Blockchain Name Systems

This past weekend I attended the Aaron Swartz Day Hackathon at the Internet Archive in San Francisco. This event, which celebrates the life and work of Aaron Swartz, is organized in multiple cities around the world every year around the time of Aaron’s birthday (November 8). Since 2015, I have been attending the SF event and giving variations of a talk about blockchain name systems.

Here’s the description of this year’s talk:

Aaron Swartz once published a blog post entitled “Squaring the Triangle“, hypothesizing that a blockchain could be used to create a name system that had secure, decentralized, and human-readable names, thus “squaring” Zooko’s Triangle.

Since that post was published, numerous blockchain name systems have been developed, putting Aaron’s idea into practice. This talk will give a brief overview of the most popular blockchain name systems in production and show some of their applications.

Systems covered include Namecoin (the OG BNS), Blockstack, and the Ethereum Name System. Without further adieu, here’s a video of my talk from Aaron Swartz Day 2017 Day 2, A Brief History of Blockchain Name Systems.

Aaron was an incredibly inspiring individual, and it was a great honor to be invited to speak at this special event celebrating and building on his legacy. If you have a chance to attend one of these events in a city near you, I encourage you to go and participate!

RIP Aaron Swartz, you are gone but not forgotten.

Email is probably the most popular decentralized messaging protocol. Add yourself to my email contacts if you would like to stay in touch!

Book highlights: “Swarmwise” by Rick Falkvinge

This year I started highlighting passages in books I’m reading on my Kindle. I have wanted to share these highlights in some way that is useful to other people, so I decided that I would start posting them here on my blog along with any useful commentary that I might have to add. I have tried formatting the highlights as best as possible for this medium. Kindle does not include precise page numbers with highlights, since book pages can change based on the size of the font and the screen the book is displayed on. If you want to look up any of the highlights in your own copy of the book, you can use the search bar in your ebook or PDF reader to find them.

The first book I’d like to share highlights from is called Swarmwise by Rick Falkvinge, founder of the Swedish Pirate Party. This book is a blueprint for launching a “swarm” organization, based on Falkvinge’s firsthand experience launching the first Pirate Party. He provides lots of practical advice throughout the book, including do’s and don’ts for prospective swarm leaders.

It is interesting to compare Falkvinge’s advice and experiences in Swarmwise with what has been happening (or not happening) in a swarm that I have participated in for a few years now, the Bitcoin network. For example, he says:

I believe that leaderless swarms are not capable of delivering a tangible change in the world at the end of the day. The scaffolding, the culture, and the goals of the swarm need to emanate from a founder.

Bitcoin had a founder, Satoshi Nakamoto, who provided some degree of leadership and direction in the early days. But Satoshi has since left his leadership position in the organization and did not leave a detailed roadmap behind for how Bitcoin would continue to evolve. The closest thing Bitcoin has to a “leader” today is Wladimir van der Laan, the lead maintainer of Bitcoin Core, who took over after Gavin Andresen, Satoshi’s successor, left his position as lead maintainer in 2014.

As people have begun to question the priorities of the Bitcoin Core developers, competing development teams have emerged that seek to make fundamental changes that would split the network away from Bitcoin Core. Of course, this is how it could have turned out even if Satoshi had stayed. No one was forced to follow Satoshi, and some people could have decided that his choices were not correct and that other strategies and tactics should be pursued instead, leading to similar hard-fork debates. Still, it has been educational to watch the drama that has played out in the leadership vacuum left by Satoshi’s absence.

I could provide similar Bitcoin-related examples for many of the other highlights I pulled from the book, but in the interest of brevity I will stop here and let you enjoy the highlights.

“Swarmwise” book highlights

Focus in the swarm is always on what everybody can do.

[S]ome work will be a duplication of effort since many people will be working on the same thing when nobody gets to tell other people what to do — but the result will be several solutions that are tried in parallel, and the swarm quickly learns which solutions work and which don’t.


The typical support functions needed are PR/media, activism, swarmcare, and web.

People should not be appointed to these positions just because it’s fun to have a title; rather, the organizational chart should lag slightly behind the observed reality.

If you’re not taking care of yourself, you’re not taking care of your swarm.

On the flip side of that coin, understanding, patience, collegiality, and passion are values that you want to show. Be aware of your own mood, and know that the swarm copies you — whether you are behaving in ways that set the swarm up for long-term success or catastrophic infighting, the swarm copies your behavior in more detail than you can notice consciously.

One value that you must absolutely communicate for the swarm to work is trust. You need to trust in people in the swarm to further the swarm’s goals, even if they choose a different way of doing so than you would have chosen, and even if you can’t see how it could possibly work.

[I]f three activists agree that something is good for the organization, they have a green light to act in the organization’s name.

Asking permission is asking somebody else to take accountability for your actions.

If something doesn’t go as intended, the swarm learns from it and moves on. On the other hand, if something is wildly successful, it gets copied and remixed across the swarm with new variants to get even better.

Control the Vision, but Never the Message

People’s friends are better marketers toward those people than you, for the simple reason that they are those people’s friends, and you are not.

[I]f you have a large assembly of people who are forced to agree on every movement before doing anything, including the mechanism for what constitutes such agreement, then you rarely achieve anything at all.

If the swarm were allowed to start discussing its purpose in life, then it would immediately lose its power to attract new people — who, after all, feel attracted to the swarm in order to accomplish a specific goal, and not out of some general kind of sense of social cohesion. If the goal is vague or even under discussion, the swarm will not attract people — because they wouldn’t see the swarm as a credible or effective vehicle for realizing their goal. After all, the goal of the swarm is uncertain and unclear if it is under discussion, so what goal would we be talking about in the first place?

The scaffolding, the culture, and the goals of the swarm need to emanate from a founder.

I believe that leaderless swarms are not capable of delivering a tangible change in the world at the end of the day. The scaffolding, the culture, and the goals of the swarm need to emanate from a founder.

I also believe in competition between many overlapping swarms, so that activists can float in and out of organizations, networks, and swarms that best match the change they want to see in the world. One swarm fighting for a goal does not preclude more swarms doing the same, but perhaps with a slightly different set of parameters from a different founder.

“If you see something you don’t like, contribute with something you do like.” This rule is absolutely paramount, and it is you who must enforce it.

[P]eople getting angry with you is a symptom that you’re starting to cause change, that you’re starting to succeed in your mission. This is expected and should not be feared.

When people in the swarm get criticized by the public and by influential people, that is a sign you’re on the right track. This is not something to fear, this is something to celebrate, and everybody in the swarm must know this.

If somebody says you’re all morons and clowns, that’s a sign you’re on the right track. If they get angry with you, that’s even better. This doesn’t mean you can’t listen to feedback and learn from it. But it should never, ever, be feared. This is paramount.

Having that folder with more information as a backup for the flyer helps in this scenario, too.

Ideally, the handers-out carry two stacks of items to hand out: one flyer, which is the main event of the day, and one folder with more information about the swarm to give to people who ask for more information. Some will.

[S]ome people will inevitably crumple up the flyer or tear it to pieces and throw it with contempt in the street. Make sure that everybody in the activity picks up such litter and throws it in proper trash cans — otherwise, people will register the swarm’s colors and symbol as trash in the street, and associate negatively from there.

Accountability and authority must always go hand in hand as they are delegated. The takeaway here is that authority and accountability must always follow each other in the concept of responsibility.

The trick, then, is how to communicate the vision. If I had to give a quick answer to that question, it would be “with all the passion you can muster, from the depths of your heart, through the fire of your voice and the determination of the depth of your eyes.” You need to be positively radiant with your desire to change the world for the better, and, above all, communicate three values:
— We can do this.
— We are going to change the world for the better.
— This is going to be hard work for us, but totally worth it.

A subtle but important part of leading a swarm is to always talk in “we” form.

Keep saying “This is hard work”, “This will change the world”, “We can do this.” We are going to change the world for the better: Keep repeat- ing your vision of how fantastic the world will look after the swarm has succeeded in its ambitions, and how great it would be for humanity as a whole.

[A] swarm built on distrust would quickly be devoured from within by its own negative feelings, and collapse, splinter, and fragment into irrelevance.)

This is going to be hard work: One key value you must never falter on is your honesty. You must always communicate the situation of the swarm and its place in the world exactly as you perceive it, even if that means telling people that the swarm has problems or isn’t gaining momentum. (However, you should always think of at least one way out of a bad situation, and communicate that, too — as in we can do this.) The key point here is that people should not think that changing the world for the better is going to be easy or come lightly. You said totally possible. You didn’t say easy.

A key tool in project management is the timeline. Between now and success, you will need to set subgoals to be met that are spaced about eight weeks apart.

The key to shipping on schedule at the end of a project is to stay on schedule every day. This doesn’t mean that a failure to adhere to the schedule is a failure of the swarm; rather, you as a project manager should have anticipated possible deviations in both directions from the start and allowed for them in the plan. When making development plans, it is typically prudent to leave 10 percent of the time of every subgoal unallocated for unforeseen events. Only you can know how this translates to your swarm, but the key is to adjust the schedule and the plan every day to account for changes in a fluid reality.

Make all the targets visible and show the progress toward them.

Anything that you measure in public, people will strive and self-organize to improve.

You should pay particular attention to the fact that as you increase the number of metrics visualized, the tasks that don’t get measured at all will get less priority. Some of them may be important.

It is a vital part of the leadership role to personally train those who regard you as their leader. When somebody is entirely unskilled in an art, you need to give direct, specific, and explicit instructions.

You need to assess every individual you work with here — you need to assess where everyone is on this scale in his or her specific context. He or she may be in several different places at once if he or she is working in multiple contexts.

Finally, the fourth and final stage is when somebody is self-motivated and self-reliant. At that point, he or she has more or less ascended to be your equal and doesn’t require much in the way of maintenance. The only important thing is that you periodically recognize him or her when he or she walks an extra mile.

The third stage comes when somebody is proficient in the skills needed, but still not in his or her comfort zone. He or she has the skills and the ability to deliver, but just doesn’t know it yet. This makes for yet a third type of leadership, which basically is endless encouragement.

The next stage and type of leadership is applied when people have mastered the basic actions, but are getting frustrated over their lack of context. They don’t see the road ahead and don’t feel progress. At this stage, you need to drop the direct handholding leadership and encourage and explain why these actions lead to positive results.

At this stage, you need to focus on the actions to take and how to do them properly, rather than explaining their purpose in the greater scheme of things.

Groups, too, will pass through stages. When new people first meet in a working environment, you can observe them being very polite and friendly with one another.

Over time, as these individuals learn to work together, they also explore where their limits go, and these limits of people’s roles will start to collide and flow into one another. This is when they start fighting between themselves over rules and culture in the group. This is a significant step forward from overfriendly politeness and shows that the group is well on its way to becoming a well-functioning team.

Finally, in the third phase, you see nothing of the clearly marked distances that were there at the outset. A functioning team can be observed by everybody seeming to know what to do without any- body spelling it out; the group has learned how to work together. (If new people are added to the mix, the group temporarily reverts into determining roles, culture, and boundaries.) You need to be aware of these group phases in group psychology, and, in particular, you need to know that a small amount of conflict is actually a step of progress. A group that remains polite to each other has not learned to work well together.

People that are polite to each other have not yet learned how to work as a team.

The swarm must have mechanisms for conflict resolution, for decision making, and for reward culture. There are many ways to accomplish this. A traditional voting democracy is one of the worst.

So, in effect, there are two good ways to resolve conflicts in a swarm. The first is organizational, and means that we negate the possibility of one person determining what another can do in the first place. Nobody gets to tell anybody else what to do. This is the norm for a swarm. Some people call it a “do-ocracy.” The second effective method is a consensus-making decision process where everybody can veto the way forward. This method is much more costly, but can (and should) be used in rare and carefully selected scenarios where the number of people concerned is graspable – typically 30 or less. Be careful with establishing consensus decisions as an organizational requirement, though – it would be extremely cheap for an adversary to kill the operational ability of the swarm by putting one person in the group to veto every significant decision.

[A] swarm is legitimate only because it lets every individual include himself or herself on his or her own terms in order to further the swarm’s goals. Therefore, “democratic legitimacy” is a contradiction in terms in a swarm organization. The process of voting actively reduces the legitimacy of decision making and involvement, and should be avoided as much as possible.

Asking permission is asking somebody else to take accountability for your decision.

For if it doesn’t matter how many safeguards you put in place against PR gaffes, there is no point to bother with such safeguards in the first place. Instead, you can focus on optimizing the swarm for speed, trust, and scalability, and we can communicate to the swarm that mistakes will happen, and when they do, we fix them, learn from them, and move on. My approach for a very basic sanity check was to have three people agree on an idea as good for the swarm. One person can come up with ludicrous ideas, but I’ve never seen two more people agree on such ideas.

By communicating clearly that in this swarm, you’re not only allowed to make mistakes, but expected to do so from time to time, you encourage the bold attitude required to change the world. You need not only your own crazy ideas, but the crazy ideas of many others to succeed, and you need to create the climate where they are welcome and rewarded.

You must let the unknown be tried and evaluated to find the good stuff.

We have discussed the importance of optimizing the swarm for speed — as in minimizing the time from somebody’s idea to somebody’s action. But to truly outrun the competition, you need to minimize the iteration cycle — the time from a failure to the next attempt at succeeding. Make it possible to learn and try again, learn again and try again, and so on, and communicate that this is not only allowed, but expected.

[I]t’s not necessary to speak of failures, as most people won’t see a failure — they will see something that went reasonably OK, but which can be done even better the next time. That’s also the appropriate mind-set for maintaining a positive attitude.

Activists make friends and change the world, and that’s it, from their perspective.

The swarm is a disorganization by design. Some would prefer to call it a self-organization. In either case, there’s nobody assigning everybody to boxes, tasks, and activities. That’s why the organization works so well. Organizing it in the manner of organizational astronauts kills the swarm’s ability to function as a swarm. You need to make absolutely clear to these people that the swarm works by its own consensus, that decisions are made organically by individual activists flowing to and from initiatives of their own accord, and that this swarm is your initiative; if the wannabe fixers and organizational astronauts don’t want to play by the swarm’s rules, they need to use the law of two feet themselves, and go somewhere else. Watch out for organizational astronauts that want to “fix” the organization.

At the end of the day, we have a structure that can handle budgets and money, and that is the supporting scaffolding structure we discussed in chapter 3. It becomes the duty of the officers of the swarm to distribute resources in the most effective way to support the end goals through the initiatives of the activists. In this particular aspect, the swarm will resemble a traditional top-down organization in terms of allocating its resources in a decentralized manner. You, in control of the swarm’s formal name and resources, allocate budgets to officers, who subdivide their budget in turn. With this said, once the swarm has any money to speak of, a sizable chunk of it should be devoted to supporting individual activists’ initiatives where they can reclaim expenses. The swarm lives and dies with the creativity and initiatives of its activists.

It follows that we reward exemplary activist behavior with our attention, and completely ignore things that we want to see less of. Anything that we focus on in the swarm, for whatever reason, will grow in the swarm.

So what behavior do we want to see growing? Initiatives. Even initiatives that fail. Supporting others. Actually, this one is quite important. I frequently emphasize that helping others excel is just as valuable as excelling on your own. Creativity and sharing ideas. Helping people get along. While these are just examples, the criteria for rewards tend to converge on three key factors — helping the energy, the focus, and the passion of the swarm.

[I]f you should ever need to repurpose or regoal the swarm, you need to get a very high level of buy-in for this. You need to be aware that there will be a high degree of pushback, as your new goal or method isn’t why people have joined. The costs will be high, but sometimes, it will also be the only way through, if the swarm has learned that the initially pictured goals or methods for attaining them weren’t possible. In such a scenario, voting may be the only way through. In doing so, you will create losers, many of whom will leave the swarm permanently with a bitter aftertaste. But if the alternative is to accept the failure of the swarm as a whole, it is still the preferable option.

This brings up a number of problems. How do you determine who has the right to vote in a loose network? Everybody who wants to? Everybody who has left his or her contact details as an activist? Anybody who is a paid-up member of something? The last option will certainly be perceived as offensive to a lot of activists, for example — that influence can and must be bought and paid for, rather than deserved through effort and ideas, which is the swarm way. In such a process, it is absolutely imperative that everybody is feeling included. This sounds easier than it is. There are many ways to exclude people in practice from influencing the final outcome. If you call a physical meeting in a specific location, you exclude the people who are unable to get to that location on that time, for whatever reason. If you choose to discuss and vote during several hours on a Saturday, you are excluding parents who prefer to spend time with their kids. If you instead pick evening hours on weekdays, you will exclude people who work late. If the issue to vote on is reasonably complex, you are excluding people who can’t take themselves the time to absorb the details of it.

[Y]ou need to identify the reward mechanisms within the subgroup that has formed around the maverick. Odds are that they’re forming a group identity around not being recognized as individual activists. You can shatter this identity by recognizing good contributors in the group who are hang-arounds of the maverick; odds are that there are several good contributors in that group who are just temporarily wooed by the maverick’s charisma. If you pick away a couple of key people in this group and recognize them for good earlier work — unrelated to the maverick’s yells — you will isolate the maverick, and the disturbance will lose critical mass. Always remember that an organization is people, and that attention is reward.

You should keep reminding the entire swarm about the organization values regularly, as part of your heartbeat messages, which we’ll be discussing in the next chapter — both to reinforce the values to old activists and to introduce them to new activists. Describe one value in every or every other heartbeat message. Needless to say, you also need to practice what you preach.

You also need leadership guidance and tons of empty positions in the organization that new activists can fill…

Above all, we need to defend two things in all our actions:
— The organization’s focus. We’re going to make the parliamentary threshold. Everything we do must be aimed at that.
— The organization’s energy. It is incredibly easy to get drained of energy if you start feeling negative vibes. There is a need for a constantly reinforced we-can-do-this sentiment.

Monkey see, monkey do. We are role models. We act just the way we want other people in the organization to act.

Attitudes are highly contagious, so, therefore, we make sure to have a positive and understanding attitude. We spread love, trust, energy, and enthusiasm.

[A] decision that makes harmfully large portions of the organization upset about the decision in itself should be rescinded. This calls for an independent striking of a balance between making independent decisions and our dependence on the trust of the affected to keep making decisions…

Decisions shall be used to strengthen the organization’s energy and focus, and a decision that makes harmfully large portions of the organization upset about the decision in itself should be rescinded. This calls for an independent striking of a balance between making independent decisions and our dependence on the trust of the affected to keep making decisions, and the grayscale is quite large.

In a swarm, nobody can or should be told what to do. We do not have any kind of mandate to point at people and tell them to do things. Rather, we must inspire them to greatness.

We reward our colleagues as often as we can, both in public and private, when they display a behavior we want to reinforce. In particular, this goes for activists who advance their colleagues. We praise and reward individual brilliance as much as helping others to shine. This is important.

Every behavior that gets attention in an organization is reinforced. Therefore, we focus and give attention to good behavior, and, as far as possible, we completely ignore bad behavior.

Even if we have great tolerance for mistakes and bad judgment, we do not show tolerance when somebody shows disrespect toward his or her colleagues, toward other activists. Condescending argumentation or other forms of behavior used to suppress a co-activist is never accepted.

If the bully continues despite having the behavior pointed out, he or she will be shut out from the area where he or she disrespects his or her peers, and if some friend reinvites him or her back just for spite, we will probably shut off the friend, too. We have absolute-zero tolerance for disrespect or intentionally bad behavior against co-activists.

We communicate using the model “When you perform action X, I feel Y, since I perceive you think Z,” possibly with the addition “I had expected A or B.” An example: “When you give the entire budget to activism, I feel frustrated, as I feel you ignore our needs for IT operations. I had expected you to ask how much it costs to run our servers.” This creates a constructive dialogue instead of a confrontational one.

We never say “Many people feel…” or try to hide behind some kind of quantity of people. Our opinions are always and only our own, and we stand for them. The one exception is when we represent an organization in a protocolled decision.

We try to keep administrative weight and actions to a minimum, and instead prioritize activism. It is incredibly easy to get stuck in a continuously self-reinforcing bureaucratic structure, and every formal action or process needs to be regularly questioned to evaluate how it helps activism and shaping the public opinion.

We build social connections. We meet, and we make others meet.

We develop our colleagues. We help everybody develop and improve, both as activists and leaders. Nobody is born with leadership; it is an acquired skill. We help each other develop our skills, even in our roles as officers and leaders.

Having fun in the swarm is crucial to growing the activist base. Having fun in the organization is crucial to success. You need to make sure that you and your colleagues, all several thousand of them, have fun.

Success in a swarm doesn’t happen smoothly and fluidly. It happens in hard-to-predict enormous bursts. You may have spoken about a subject for a good year or two, seeing no return on your efforts at all. Then, something happens, and more or less overnight, tens of thousands of people realize you have been right all along and join your swarm for the fight.

However, we should not confuse persistent day-to-day grinding with a refusal to see roadblocks for the uptake of the swarm’s ideas. If people tell you that your website is confusing, that the officers of the swarm are inaccessible, or that new people who come to gatherings aren’t feeling welcome, those are real issues and should absolutely not be taken as a sign to just keep doing what you’re already doing. Everybody needs to listen for real blocks to adoption of the swarm’s ideas, all the time — but it’s when there are no such blocks coming, and there’s still no momentum, that everyday motivation can be hard to muster up. It is precisely at this point that one must keep grinding.

Don’t ever risk trading your swarm culture for temporary cash. Keep one value base.

Every single challenger party I spoke to that had failed pointed out the creation of several parallel organizations with their own legal identity as the one reason, or one of the primary reasons, that the party had failed. There’s an important lesson to learn from that. So keep your swarm to being one legal entity (if you bother to make it a formal legal entity at all).

The real strength of the swarm comes from cross-using online and offline friendships. Offline friendships are much, much stronger than online friendships and connections.

Thus, we need to use the reach of online tools and communication to make people want to talk about the swarm’s goals in their respective offline environments, where the possibility of recruiting new activists is much, much better than on a random web page.

[T]he people who are most active can’t recruit any new activists to the swarm themselves by talking to their friends. The people leading a swarm must be acutely aware that they cannot directly influence a single individual directly to join the swarm.

To enable such recruitment at the edge, a couple of key components must be communicated to the entire swarm at regular intervals in heartbeat messages.

Send a weekly letter with newsflow, sample rhetoric, urgency, and confidence.

Activation is a gradual process with many steps on the activation ladder.

The metric that matters is how many people you can mobilize to take action.

A lot of people in general want to be on the winning team in most contexts and will adapt their behavior to match it. Therefore, if you can make your swarm look like the winning team, regardless of your actual strength, 90 percent of your work is done. In marketing, this principle is based on the mantra that “perception is reality” — in other words, what’s real is what we perceive to be real. But the mechanisms go beyond that idea; perception also shapes reality… Control perception of who’s the winning team, and you become the winning team.

In the Swedish Pirate Party, a significant portion of our homepage was devoted to “People blogging about the Pirate Party.” Anybody who mentioned the Pirate Party’s name in a blog post — no matter in what context — got their blog post highlighted and linked from our front page. This could be accomplished fairly easily with automated processes.

People will behave as you behave on public discussion boards about the swarm’s ideas. Teach them to be polite and friendly, no matter how harshly and viciously attacked, and you’ll win wonders. Politics is a spectator sport, and so is arguing your case anywhere on the Internet. As they say in other spectator sports, “win the crowd.”

You need to be able to send a press release in 25 minutes, from idea to transmission.

[B]e provocative. If you’re not making somebody angry, you’re probably not doing anything useful. Have fun and make your adversaries angry at the same time: this does not only lead to more activists in the swarm, as we saw in chapters 7 and 8, but it also makes you really enjoy your work in the swarm. Plus, it guarantees you a load of media. Oldmedia just love provocative. Let’s take that again, because it is important: if you’re not making somebody angry, you’re probably not doing anything useful. Don’t be afraid of people yelling. That’s a sign you’re doing something right.

Gandhi once said, “First they ignore you, then they ridicule you, then they fight you, then you win.” This is eerily accurate in oldmedia’s portrayal of any disruptive or provocative swarm.

A key concept in dealing with oldmedia is “owning the issue.” Basically, it means that your swarm needs to be so tightly associated with the issues you drive or things you sell that whenever oldmedia come across a story on the topic, they call you for comments.

When working with oldmedia, the swarm needs one outward face, and one face only. This would typically be the swarm leader or founder (you). It is important to realize that this is an avatar face — it is not you as a person, but a face that represents a larger and very specific movement.

As your swarm starts to rise to prominence and success, you personally will invariably do so, too. This was probably never a goal of the swarm as such, but it is the way oldmedia’s logic works — they need a face to associate with every movement or organization, and if the movement is successful, so is that particular face. The danger lies in not realizing that people will regard everything you say as having much more weight than you place on it yourself at the time you say it. If your swarm is political, anything you do — or don’t do — will be interpreted as a political statement, everything from your choice of groceries to your pick of vacation resort.

Getting visibility in society is hard. Keeping it is even harder. As the founder, it is your job to explain that when things appear to be at their peak, all those lavish jobs and expensive toys are farther away than ever. At that point in time, the swarm has two of its toughest challenges ever to overcome — to remain steadfast on the extroverted track, despite the distracting glimmering riches on the horizon, and the fact that the visibility and success will fade even if the swarm continues exactly on its current course of action, and this can be a very tough thing to face emotionally.


You want to provide artificial light and heating to a billion people in developing countries? Or clean water? A swarm can make it happen. How about teaching five billion people rational thinking and scientific approach, in an attempt to end religious conflicts? Totally within grasp. Don’t shoot for the moon. Shoot for Mars!

Change doesn’t just happen, I say. Somebody always makes it happen. The final words of this book will therefore be the same words that close my presentations and workshops about cost efficiency in management and volunteer activism: Do you want to be that person?

Email is probably the most popular decentralized messaging protocol. Add yourself to my email contacts if you would like to stay in touch!

Ten Ways Governments Threaten Bitcoin

Governments are strange beasts. Not quite market, not quite commons, governments occupy a unique space in the economy where societies permit (or tacitly tolerate) territorially-bound corporations that have fiat monopolies on important social functions and institutions. Governments use these exceptional permissions to create and enforce laws and regulations that inhibit the free flow of goods, services, and ideas within their jurisdictions, simultaneously creating and limiting opportunities for entrepreneurs, investors, and workers in the economy. All the while, governments engage in covert campaigns to undermine and neutralize foreign and domestic targets that are seen as threats to “national security” (read: government power and/or the profits of incumbent corporations), creating blowback and bad precedents that have come back to haunt governments and their citizens years later.

The Bitcoin network is a relatively young but growing part of the economy, spawning hundreds of businesses and nonprofit groups that support the fledgling technology, fueled by over $1 billion in venture capital and angel funding that has been invested since Bitcoin’s invention. While the Bitcoin network itself is decentralized, transcending government borders and legal jurisdictions, there is an uneven patchwork of government regulations bound by geography and international treaties that are creating centralizing forces and vulnerabilities in various parts of the Bitcoin economy. This is a cause for concern among members of the community that value resiliency and decentralization of power in the network. Unless there is a focused movement to eliminate the government interventions that threaten Bitcoin companies and distort the market to create these centralizing forces, we can expect this drama to continue to play out for years to come.

Note: This is not an exhaustive list of government threats to Bitcoin.

1. Bitlicenses and banking regulations

A “Bitlicense” is a specific license required to operate a business that serves as an exchange or brokerage firm for bitcoin and other “virtual currencies.” This kind of license prevents competition by limiting the number of companies that can legally do business within a jurisdiction, and puts customers at risk by requiring businesses to collect and store sensitive personal identity information.

First implemented by New York, some version of a Bitlicense has been proposed or implemented in states and countries around the world, including tech hubs such as California and growing financial hubs like the Isle of Man. In jurisdictions that have not adopted a Bitlicense, previously existing banking, money transmission, and money services business regulations have been used instead, producing the same cartelizing effects as a Bitlicense.

[1] [2] [3] [4]

2. Bitcoin bans

The alternative to licensing of Bitcoin exchanges has been the consideration or actual implementation of bans on Bitcoin exchanges, which further centralizes power in the remaining exchanges throughout the world and pushes people into underground market exchanges. While not an existential threat to Bitcoin, this concentration of power in regulated exchanges puts pressure on customers to comply with onerous KYC/AML requirements that put them at risk for identity theft and financial surveillance. This added friction slows down the adoption process, excludes people who are undocumented or security-conscious from the exchange market, and pushes people into slow, expensive, and risky gray or black market exchanges.


3. Energy subsidies

The largely unregulated nature of Bitcoin mining makes it a nearly free market with nearly perfect competition. Miner profitability relies on many factors, including connectivity with the rest of the network, the cost of operating expenses, and hardware quality. The miners that survive these competitive conditions are the ones that are able to reduce their costs while increasing their hashrate and block propagation speeds as much as possible. Electricity is by far the largest operating expense of Bitcoin miners today, and so the miners that are most profitable today are the ones with the cheapest electricity costs – and the lowest cost is “free.”

Energy is highly controlled by governments in most parts of the developed world, either directly through government-run energy companies or indirectly through government-sanctioned energy cartels/ monopolies/ duopolies/ oligopolies. When energy companies have a surplus of electricity, governments will sometimes decide to give this electricity away for free. Governments also subsidize the production of energy by providing preferential tax treatment or direct cash subsidies to energy companies, artificially reducing the costs of certain kinds of energy.

Energy subsidies by governments create an uneven playing field in the energy markets, leading bitcoin mining to consolidate around areas with access to artificially cheap or free electricity. Given that there are only a relatively small number of places in the world with these kinds of subsidies, the hashpower responsible for Bitcoin network security is concentrating in just a handful of legal jurisdictions. This makes it easier for a government or coordinated group of governments to take control of the Bitcoin mining network through nationalization or de facto nationalization by regulation.

[6] [7] [8]

4. Labor and immigration laws

Much of the Bitcoin industry relies on highly specialized knowledge in the fields of ASIC manufacturing, cryptography, computer science, finance, and economics. Labor and immigration laws restrict the movement of workers with this specialized knowledge, preventing a free market for labor from arising. Labor is artificially cheaper in some areas, or more expensive in others, because of government intervention that distorts the supply and demand curves of these markets. This creates concentrations of power in areas where these specialized skills and distorted labor markets exist: China for ASIC manufacturing, Europe and North America for cryptography and software development, London and New York for finance and economics, Silicon Valley for startup capital, etc.


5. Research grants

Within the past couple of years, governments have become increasingly interested in Bitcoin. In 2015, the RAND Corporation published U.S. government-funded research about the ways that governments can disrupt “virtual currency networks” like Bitcoin. Governments have also become interested in blockchain data analytics, creating a cottage industry of companies devoted to tracing illicit flows of funds and other criminal uses of Bitcoin. In June 2016, the U.S. Department of Homeland Security announced that they had awarded research grants of approximately $100,000 each to Block Cypher and RAM Laboratories for “Blockchain Applications for Homeland Security Analytics.”

These kinds of government grants create incentives to do research that the market might not otherwise demand. They also create incentives for grant recipients to attempt to block certain changes to the core protocol that would impede such research e.g. automatic CoinJoin, Confidential Transactions, ZK-SNARKS, etc, in the case of analytics research. There is no evidence as of the time of this writing that the companies that have been awarded research grants for blockchain analytics are making any concerted efforts to block fungibility improvements in Bitcoin software. The general principle here is that core developers and full node operators will have to remain vigilant about spotting conflicts of interest by those that would seek to influence core protocol development.

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6. Legal tender laws

Legal tender laws are laws that give special privileges to bank-issued “fiat” currency above all other currencies. Fiat currencies issued in a legal tender regime (such as the U.S.) must be accepted for settlement of debts, public or private, such as a lawsuit settlement or payment of taxes. It’s like if McDonald’s was the only place you could legally eat in your area, and you had to pay for everything with a currency they issued called “McBucks.”

Since everyone who earns income is required to pay taxes, this means that everyone who earns income has an incentive to have at least enough fiat currency at the end of the year to pay their taxes. Since most businesses only accept their local fiat currency, consumers have an incentive to have much more than the minimum amount of fiat currency needed to cover their tax burden so that they can easily make purchases from local businesses without needing to exchange for fiat currency first.

The incentive structure created by legal tender laws privileges fiat currencies and hampers adoption of alternative currencies, even if the alternatives have more desirable characteristics. Such an uneven playing field is bad for bitcoin. The playing field must be leveled for bitcoin to truly compete with fiat currency on its own merits.


7. Key disclosure laws

Key disclosure laws are laws that require suspects to turn over their decryption keys to police if a court order or warrant demands access to encrypted materials. Failure to comply with the order could result in contempt of court charges and lengthy prison sentences. Bitcoin uses private keys to sign and authorize transactions to transfer bitcoin. Encryption is used to encrypt private keys and messages containing transaction data, protecting this sensitive information from hackers. Courts may one day use key disclosure laws to force suspects i.e. people who have not yet been convicted of a crime to turn over the keys needed to decrypt such sensitive data. Courts may also force the disclosure of Bitcoin private keys so that the court can appropriate the bitcoins on behalf of the government or a plaintiff in a lawsuit.

Key disclosure laws put bitcoin owners at risk by creating a legal avenue by which they may be forced to disclose the private keys that control ownership of their assets and protect their transaction data, even if they are not convicted of a crime. This could open bitcoin owners up to theft by corrupt government agents or hackers who gain access to the private keys that have been involuntarily disclosed to the government.

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8. Intellectual property laws

Intellectual property (IP) laws turn ideas into private property. Such laws grant companies and individuals a government-granted monopoly over unique innovations, such as certain kinds of bitcoin wallets or mining chips. Once this monopoly is granted, the company that owns the IP via copyright, patent, or trademark can send government agents to attack anyone that copies the idea and compel the copier to either stop their IP infringement or pay rents for each copy.

This kind of monopoly on ideas slows down technological progress by making it a crime for people to copy or improve upon already existing ideas, blocking off certain avenues of innovation. While Bitcoin itself is free software, open for all to copy, remix, reuse, and redistribute, the same is not true for innovations built on top of Bitcoin. This has the potential to centralize control of important innovations in Bitcoin in the hands of a small group of people, who can then use this control to extract rents from the ecosystem or even take control of the network itself through e.g. mining centralization.

There is good work being done to counter-act the negative effects that intellectual property laws have on innovation in the technology industry. To fully protect creativity and innovation, intellectual property laws must be abolished so that people are once again free to copy, modify, and reuse ideas and information as has been done since the dawn of our species.

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9. Internet controls

As a peer-to-peer digital currency, Bitcoin is almost wholly dependent on the internet for its existence. In theory, Bitcoin can be used without the internet, but the inconvenience of “sneakernet” transactions makes the technology impractical to use and eliminates the majority of benefits offered by Bitcoin. The internet has become essential in other parts of modern life as well, from academia and business to entertainment and social services.

In recognition of the internet’s importance and power in society, governments have begun enacting various laws that impose controls on the kinds of content that people within their jurisdictions may publish and consume. In China, these controls on the internet are so pervasive and totalitarian that they have been given a nickname: the “Great Firewall of China,” a reference to the famous wall that once separated China from its northern neighbors.

Internet controls have the potential to negatively affect Bitcoin in several ways, including:

  • Privileging or harming miners by manipulating internet speeds in and out of the country.
  • Filtering out Bitcoin transactions passing through unencrypted connections.
  • Limiting the information that locals can find about Bitcoin, distorting their view of the technology in ways that may be good for the government but bad for Bitcoin.
  • Limiting the dissemination of dissenting viewpoints that would question government policies about Bitcoin, alternative currencies, the internet controls themselves, and other relevant issues.

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10. Corporate espionage

Allegations of corporate espionage by governments around the world are among the most troubling revelations to come out of the classified documents leaked by Edward Snowden. Governments have allegedly gone so far as to have their agents infiltrate private companies without the knowledge of those companies to spy on internal processes and interfere with the security of information technology products. In early 2015, it was revealed that spies working for the U.S. and U.K. governments allegedly hacked into the network of a German company called Gemalto, compromising private keys produced by the company for cellphone SIM cards and enabling the spies to decrypt the communications of potentially billions of cellphones without a warrant.

While the Bitcoin network is not yet large enough to warrant the kinds of expensive infiltration tactics seen in previous government operations, it’s possible that Bitcoin companies may become influential enough in the future to become serious targets for corporate espionage by governments around the world. Bitcoin hardware manufacturers, miners, wallet developers, exchanges, and other influential members of the Bitcoin industry could all be targeted, and will need to prepare accordingly.

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Free Bitcoin

Like all government regulations, these interventions are creating distortions in the Bitcoin economy that prevent the market and technology from growing naturally and organically, instead crippling Bitcoin in some areas and subsidizing growth in others. As Bitcoin’s influence grows, it will become increasingly important that Bitcoiners recognize government interventions that affect Bitcoin’s growth and then work with others in their area to put an end to these interventions so that Bitcoin can grow to its fullest potential without unfair help or hindrance.

Email is probably the most popular decentralized messaging protocol. Add yourself to my email contacts if you would like to stay in touch!


It’s been a while since my last post; so much has happened that I’ve hardly had any time to stop and consider the awesomeness of it all. Towards the end of 2014, I began working with the okTurtles Foundation to help them with a crowdfunding campaign that they’d been planning. I met okTurtles co-founder Greg Slepak after I became interested in his DNSChain project and reached out to interview him for my P2P Connects Us podcast. Shortly after this interview, Greg posted a blog post about how okTurtles needed a fundraiser, and I offered to help.

As I have previously discussed on this blog, identity is an important part of the human experience, and I believe people should have a more secure alternative to the legacy identity systems in use today where someone else is in control of our identities. Whether by a website, an employer, or a government, identities have been controlled by third parties for too long. DNSChain, to me, looked like an opportunity for individuals to break free of that control, and I was – and still am – happy to support that effort.

Around the same time that I started working with the okTurtles Foundation, I began having conversations with my friend Harlan about projects we were working on and daydreaming about what it would look like if we put our ideas together. We started talking about what a “decentralized application stack” would look like, something that could be used to build a bunch of different apps – photo sharing, messaging, collaboration, etc – which could all seamlessly interoperate with open protocols. Harlan called it “the last social network,” because it would make all the centralized, proprietary walled gardens that people mistake for their social networks irrelevant.

This idea excited me, so I got to work jotting down some ideas and Harlan built a website that pulled all the info off of GitHub. We ended up calling the stack “DStack,” short for “Decentralized Stack.” All I did was point to some projects that already existed and said, hey if we put these all together somehow, we could build a lot of cool apps on top which are completely decentralized. We would just need something for user identities, some way to store and transfer user data, and interfaces for the apps. Then Harlan and I both got busy with other projects, and we haven’t really touched DStack since.

Around this same time, in early 2015, I met an entrepreneur named Jay Feldis through my friend Mike Doty, who I knew from the local bitcoin meetup. Jay and Mike had been working on a product they called “CoinBox,” since rebranded to “Bitseed,” which was essentially a small computer that you could use to host blockchain full nodes for mining, staking, or just relay transactions on one of these networks. Jay presented a Bitseed prototype at a bitcoin meetup hosted at the Internet Archive, and I was intrigued by the possibility for Bitseed to solve the problem of low bitcoin node count by giving users an easy way to run their own full node.

Jay and Mike were working with a guy from SoCal named Konn Danley, who was helping them build the ecommerce store for Bitseed, and they just needed someone to help out with writing content for the website. I had some free time so I offered to help. When the website was almost done, I scheduled a tweet to go out a few days later, went back to work writing content for the site, and promptly forgot about the tweet.

Right on time, the tweet auto-posted and ended up going semi-viral, getting over thirty retweets on Twitter while a Reddit post about Bitseed simultaneously shot to the front of r/bitcoin. Bitseed was out of stock within 48 hours. It seemed there was demand for plug-and-play bitcoin full node hardware, validating our initial hypothesis. The Bitseed team then went to work over the next few months fulfilling orders and working on version two of the device.

During the R&D period for Bitseed v2, I was invited to join a new community of decentralized application developers called Blockstack. The mission was to build common infrastructure for the development of decentralized applications, a common “decentralized stack,” if you will. Sound familiar? I had found my tribe! I soon started helping them out, writing content for the website and inviting more people to join in the effort. Summer 2015 has been, for me, the summer of Blockstack.

Today, the Blockstack community is comprised of some of the smartest and most talented developers working on decentralized applications today, growing to include developers from 2WAY.IO, Bitmarkets, Bitseed, Chord, Creative Work, Mine, Nametiles, OB1, the okTurtles Foundation, Stampery, Tierion, and ZeroNet. Developers for these projects have all have faced daunting challenges when thinking about how they will develop their applications – start building components from scratch? Use this or that library? Is this the right tool? Can that software be optimized for building decentralized applications? As Blockstack matures, many of these questions will be answered for developers, who will then be able to focus on building beautiful interfaces and great user experiences instead of worrying about infrastructure development and maintenance.

Using Blockstack, developers will be able to create decentralized versions of popular online services like AmazonYoutube, Twitter, and Reddit, and even a whole new way of publishing and browsing websites, all while costing less in time and deployment costs then was previously possible. Developers will be empowered to eliminate central points of control and failure in their applications, weaknesses which have previously led to Internet censorship, repression of political or social dissent, mass surveillance, billions of dollars in financial losses, and hundreds of millions of compromised identities.

As I recently mentioned on a panel at the American Banker Digital Currencies and the Blockchain conference, decentralized applications change the economics of hacking by eliminating the ability to compromise millions of accounts with one successful hack; instead, criminals will have to hack into every device owned by individuals in a network of potentially millions of people, meaning that the hacker has to work that much harder, most likely making the attack cost more than it’s worth. Combined with payment systems like bitcoin, which can enable microtransactions, do not require identity information to work, and are not subject to chargeback fraud, Blockstack could be used to build a new kind of network that is more secure and more resilient than the web 2.0 that came before it.

For all these reasons and more, Bitseed and okTurtles have both joined the Blockstack effort. At Bitseed, we believe our dedicated full node device is a natural fit for software like Blockstack, and we look forward to working with the community to spread Blockstack nodes far and wide. In the spirit of the Blockstack mission to collaborate on common infrastructure, Onename recently announced they are working with the okTurtles Foundation to merge their blockchain ID projects and help advance the state of the art of decentralized identity technology.

Bitseed and okTurtles will both be participating in the first Blockstack community event, Blockstack Summit 2015 at NYU in New York City on September 12th. This event will bring together over a hundred of the top developers working on decentralized applications and blockchain technology today. I’m helping to organize Blockstack Summit, and couldn’t be more proud and excited about the great lineup of presenters, panelists, and attendees who will be participating in this event.

Blockstack is effectively taking the late-night conversations I had with Harlan from dream to reality, with actual working code and a vibrant, enthusiastic community contributing to the effort. There are still some issues to iron out, particularly around the exact definition of the stack and the governance of this new community organization, all which we plan to discuss and work towards resolving at Blockstack Summit. I believe that if we work smart enough and agree on a shared vision, this community has the passion and talent to make something truly amazing and world-changing. If this sounds like something you want to be a part of, I invite you to join our community and come say hello at Blockstack Summit.

Email is probably the most popular decentralized messaging protocol. Add yourself to my email contacts if you would like to stay in touch!