Hundreds of media accounts were just deplatformed. The need for a decentralized web is greater than ever.

Over the past few days Facebook and Twitter have deplatformed hundreds of accounts with millions of followers in total under the guise of fighting “clickbait” and “spam”. The Washington Post reports:

Facebook said on Thursday it purged more than 800 U.S. publishers and accounts for flooding users with politically-oriented spam, reigniting accusations of political censorship and arbitrary decision-making.

In doing so, Facebook demonstrated its increased willingness to wade into the thorny territory of policing domestic political activity. Some of the accounts had been in existence for years, had amassed millions of followers, and professed support for conservative or liberal ideas…

Just one day after the Facebook purge, Twitter followed suit, deplatforming the accounts of alternative media outlets Anti-Media and The Free Thought Project. Sputnik International reports:

Anti-Media and TFTP aren’t automated bot accounts or spammers. They are run by US citizens who used the internet applications Twitter and Facebook to exercise their First Amendment rights. For that they have been punished — first by Facebook, now by Twitter.

I have friends who were caught up in these purges. Their audiences have been significantly reduced because of this deplatforming. I am generally opposed to “censorship” by media platforms, preferring that readers use their power to mute or block content they do not like rather than have their web browsing experience curated by paternalistic algorithms and “content moderation” teams.

That said, we have to recognize the reality of the situation we find ourselves in: Facebook and Twitter are platforms owned by private companies who have the freedom and the right to deplatform any content they do not like.

https://twitter.com/lightcoin/status/1026688238281482240

The alternative is website owners being forced by the State to host content they disagree with, which seems even worse than the status quo. Hypothetical Lockean squatters rights aside, today’s legal regime supports a company’s right to moderate content off of their platform. So what can we do to protect ourselves from sudden deplatforming by social media administrators?

We get rid of social media administrators.

The future of social media, and the web itself, is decentralized. The same way bitcoin is a decentralized, open protocol that enables anyone to send and receive money without intermediaries, social media platforms will become decentralized protocols that enable anyone to publish and read without intermediaries. The web gets us most of the way there, but there are still vulnerable choke points, such as centralized servers that host content and the ICANN-owned domain name system that routes web requests.

The decentralized web is removing these choke points and replacing them with open protocols that advance the vision of the web’s inventors and early pioneers. Platforms like Blockstack and Ethereum are taking the vision of the web and building in censorship resistance that is stronger than anything possible with the technology of prior generations.

Using BNS and ENS, you can own a domain name that no corporation or government can take away from you. Using Gaia and Swarm you can self-host and back up your content on multiple geographically diverse hosts, preventing take-down by would-be censors. And rather than rely on the good graces of payment processors like PayPal to earn your keep on the web, you can get paid for your content directly by your fans using Lightning and Connext.

Putting this all together, what does the decentralized social media platform of the future look like? It could look like Afari, a Twitter-like application built on Blockstack:

lightcoin_afari2.png

Or it could look like Akasha, a Medium-like application built on Ethereum:

lightcoin_akasha.png

To be sure, it’s early days for these platforms, so they’re not quite ready for prime time yet. And in all likelihood, they could go the way of previous decentralized platforms that attempted to take on the centralized social media giants: at best a niche curiosity, at worst abandon-ware that gets buried in the graveyard of failed projects.

But what this new breed of open protocol-based platforms represents is a turning technological tide, where users don’t have to be sysadmins to take control of their data, where interfaces are familiar and functional, where censorship and deplatforming are nearly impossible. In this world, publishers can post without fear and have a direct relationship with their audience, secure in the fact that no third party can unilaterally take away their online voice and reach.

If you have any motivation to help – whether with design, development, documentation, or testing skills, or even just providing moral or financial support to these projects – I urge you to get involved. The decentralized web wasn’t mature enough yet to save the hundreds of accounts that were just purged by Facebook and Twitter and the many that have been purged before. But maybe, with your help, we can prevent something like this from ever happening again.

Reach out any time through my contact page or the comment section below, let me know how you’d like to help, and I’ll try to point you in the right direction. You can also click through any of the links to projects mentioned above to get in touch with them directly.

Thanks to all involved with organizing and supporting the Decentralized Web Summit.


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

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!

Getting artists paid

Last week I had the honor and pleasure of joining my friends Tatiana Moroz and Josh Scigala (with Brian Sovryn on tech) for a discussion on The Tatiana Show about Intellectual Property (IP) with Jeffrey Tucker and Justin Colletti. You can watch the full conversation here:

I had a chance to say most of what I wanted to say about IP during the discussion but ran short on time to discuss potential solutions for how to get artists paid in the absence of IP protection. While I did briefly mention what I see as perhaps the the simplest ways that artists have monetized their work without relying on IP – live performances, private lessons, and selling physical merchandise – there are other more interesting and experimental ways for artists to monetize their creative works that have only just recently become possible or scalable thanks to the internet.

Indiegogo

One of the most popular ways for artists to monetize their content is crowdfunding using a platform like Indiegogo. Indiegogo allows artists to fund projects by posting previews of their work and creating different “levels” of backing so that people who contribute money to the project can get special features or experiences in addition to a copy of the work being produced. For example, a $5 backer of a music album could get a thank you card personally signed by the artist, a $30 backer could get a signed copy of the album, a $100 backer could get a signed copy of the album plus tickets to any show on an upcoming tour, etc etc.

Since an artist gets paid up-front before the album is actually created, there’s no risk of losing money on producing the album. All money earned after the album is produced is pure profit. Subsequent runs of the physical album or CD could be crowdfunded in this same way, so that there’s no chance of losing money on each production run either. An artist or group of artists could even fund a whole tour this way, by pre-selling tickets to the shows before committing to each venue. In this way, artists can test new markets with less risk of losing money. Crowdfunding is by no means perfect, but it’s a great way for artists to fund their work and develop closer relationships with their fans.

Patreon

There are few services that I can say that I love but Patreon is one of them. Patreon is like a combination of a crowdfunding platform and an art subscription service. The platform allows artists to set up profiles that people can subscribe to at different contribution levels. Each time the artist releases a new piece of art, subscribers’ credit cards are charged the amount of the level they subscribed to.

For example, if someone subscribes to the $5 level of an artist’s Patreon profile, then each time the artist produces a new piece of art, that subscriber will get charged $5. Patreon “patrons”, as subscribers are called, are often given access to special deals, events, and unique pieces of art not available to non-patrons, providing a level of exclusivity to the experience. Again, a great way for artists to fund their work while developing closer relationships with their fans.

ProTip

ProTip is a bitcoin wallet that automatically sends a tip at the end of every week to bitcoin addresses that were on the webpages you have visited. You can choose to exclude certain bitcoin addresses, webpages, or even entire websites so that you don’t accidentally send every bitcoin address on your favorite blockchain explorer a tip when the wallet runs its weekly program.

For example, if you visited ten different Soundcloud pages throughout the week, and seven of them had a bitcoin address in their profile description, then those seven artists would each receive a tip from your ProTip wallet at the end of the week as long as you have not chosen to exclude any of them. The wallet can tip a certain amount to each address e.g. 0.001 BTC per address, or divide a certain amount evenly between each address e.g. divide 0.007 BTC seven ways.

All an artist has to do to make their content “ProTip-ready” is paste one of their bitcoin addresses on each webpage that hosts their content – whether that’s a YouTube video, a Soundcloud profile, a Bandcamp page, or even their own website. Then, fans who have ProTip installed will automatically send the artist tips if they’re not excluded from the wallet. This is a frictionless, passive way for fans to support artists that only requires a browser extension and some bitcoin, with a small amount of effort to exclude unwanted bitcoin addresses.

Mediachain

From the Mediachain website:

Mediachain is a peer-to-peer, decentralized database for sharing information across applications and organizations… Using cryptography, all data in Mediachain stays connected to the identity of the author, offering a channel for attribution, analytics and value to flow directly.

With Mediachain, artists can ensure that their work gets proper attribution no matter what application is used to distribute it, even if the artists themselves are not the ones who uploaded their content. This way, artists can get credit for their work and get a slice of any revenues that get directed towards the work and the curator that is hosting it.

Y’alls

From the Y’alls website:

Read and write articles, with Lightning Network micropayments.

Get ready to start reading what people are writing or join in and write what people want to read!

With Y’alls, creators or curators can post content that consumers can then pay for using the bitcoin Lightning Network. Pay and get paid for content – what a novel idea!

In conclusion…

Being an artist has always been tough. Heck, being any kind of entrepreneur has always been tough. And yet, many have found ways to be successful at it. I would consider anyone who makes a living doing what they love a success. Since the popularization of the web, it seems that more artists than ever are able to make a living doing what they love. The long tail of content has become more accessible than ever, and with new payment methods like bitcoin it is now possible for anyone anywhere to show artists love by paying for the content they create. I look forward to seeing the innovation to come in technology that helps artists get paid, and eagerly await the day when IP is no longer a hindrance on creativity and the sharing of artistic content.

Honorable mentions

Flattr, a micropayments platform.

Lighthouse, a p2p crowdfunding platform.

Rocketr, an easy way to sell digital products.

Supload, monetize images and gifs.

Tatiana Coin, a digital currency used to crowdfund Tatiana Moroz’s music.


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

Bitcoin tips accepted:

Bitcoin address (what’s this?)

1ER1tnjyeVHk2uoM1qpdVF87yb1VhjqX8q

Bitcoin payment code (what’s this?)

PM8TJSxeAdmFzCyejSZsKwD5AN1Zxqm5Y4px6bJYTS63Lvu9x6patBZKHo693QCHxYKjgvZwrZN5cmgzwQgNzUPpri42NYHkhTe7A8cZoC6fdHDhS7TJ

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.

[5]

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.

[9]

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.

[10] [11]

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.

[12]

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.

[13] [14] [15]

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.

[16] [17] [18]

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.

[19] [20] [21]

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.

[22] [23] [24]

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!

The Key Decision-Makers in Bitcoin

Over the past year, there have been intense debates about the future of the Bitcoin network. These discussions have mostly revolved around the topic of scaling Bitcoin, and several proposals have been put forward to address the question of how the Bitcoin network will scale to be used by the billions of people and machines we have on this planet. These scaling proposals are not all mutually exclusive, but nearly all of them involve a fundamental change to the Bitcoin protocol that would require what is called a “hard fork.” A hard fork is a change that would cause there to be multiple competing Bitcoin networks, all but one of which would die off as a majority of users decide to use the strongest network.i

Because of the potential to split the network, such fundamental hard fork changes are not deployed often. Planned hard forks require an orchestrated software upgrade by multiple stakeholders in the Bitcoin network. Since Bitcoin is a decentralized system that is not controlled by any central authority, whether or not such an upgrade is deployed and adopted by the network is determined by several key decision-makers that must agree to the change: Bitcoin developers, economic Bitcoin nodes, bitcoin-holding users, and bitcoin miners.

Bitcoin Developers

Bitcoin developers are the first group that must be convinced that a hard fork change is necessary. If the maintainers of popular Bitcoin implementations do not accept a proposed change, the only remaining options are to fork an existing Bitcoin node software repository or start developing a new implementation from scratch. Convincing developers of an existing implementation can be politically challenging, and starting a new implementation from scratch is a herculean task. Forking an existing project is the easiest route, but still requires convincing a majority of the network to use the fork in order for the change to be adopted by all Bitcoin users.

Economic Bitcoin Nodes

Economic Bitcoin nodes are full nodes that accept Bitcoin in exchange for other forms of value and include Bitcoin exchanges, wallets, payment processors, and businesses that accept Bitcoin in exchange for goods, services, and other currencies. If economic nodes do not upgrade their full node software when a hard fork change is introduced, then blocks that are produced by miners who do choose to upgrade will not be considered valid by nodes that have not upgraded and the blockchain will split. To everyone on the old chain, miners producing blocks with the new software will lose the block reward to a competitor producing valid “old chain” blocks. The economic majority will only choose to upgrade their software if they believe the change is a) beneficial for the long term value of Bitcoin and/or b) acceptable to most of their bitcoin-holding customers.

Bitcoin-Holding Users

Bitcoin-holding users that rely on the services of economic Bitcoin nodes have a choice of where to take their business. If an economic node such as an exchange, wallet, or merchant upgrades their Bitcoin node software to implement changes that their customers do not agree with, then those customers may choose to do business with another economic Bitcoin node instead. However, it is not always obvious what version of the Bitcoin software an economic Bitcoin node is running and so the best way for bitcoin-holding users to have influence over changes to the Bitcoin protocol is to run and rely on their own Bitcoin full node for block verification and transaction broadcasting. If a hard fork upgrade is proposed that a bitcoin-holding user does not want implemented, then they may voice their concern to the economic Bitcoin nodes they do business with in hopes of dissuading them from implementing the upgrade. Similarly, bitcoin-holding users can lobby the economic Bitcoin nodes they do business with to implement a hard fork change if that change is beneficial to them.

Bitcoin Miners

In the early days of Bitcoin, economic Bitcoin nodes were either nonexistent or not that important, and the roles of “full node” and “mining node” were largely bundled together. Bitcoin miners would use low-power laptop and desktop computers and did not have much of a reason to sell the bitcoin they mined to cover operational expenses. Since then, the price of bitcoin has risen dramatically and bitcoin mining has evolved to become a large-scale industrial operation. Bitcoin miners now rely on economic Bitcoin nodes to convert bitcoin into value that is then used to cover the costs of bitcoin mining. While a hard fork change will never be implemented if miners do not upgrade their software to support the change, miners will only upgrade their software if a majority of the economic Bitcoin nodes have also implemented the change.ii

It is a common misconception that Bitcoin miners are the final decision-makers about what version of the Bitcoin software is the “dominant” version that drives consensus in the Bitcoin network. The reality is that Bitcoin miners are just one of many stakeholders which must be convinced to upgrade their software, and for game theoretical reasons are actually most likely to be the last to upgrade their software in the event of a hard fork change being introduced. Most Bitcoin miners operate on thin margins and are therefore very conscientious of their revenue and costs. They will only run software that produces blocks that are accepted by a majority of the economic nodes in Bitcoin, who in turn will only upgrade their software if the change supports the long-term value of Bitcoin and/or is acceptable to most of their bitcoin-holding customers. Coordination is therefore required among all of these stakeholders to debate the merits of proposed hard fork changes and make hard but necessary decisions to ensure that the Bitcoin network continues to grow to support widespread usage.

Making Progress

If the Bitcoin protocol does not evolve to accommodate growing demand and new use-cases, then growth could stall and the unmet demand will be serviced by another competing network instead, potentially harming the long-term value of bitcoin and bitcoin mining equipment. It is therefore in the best interest of Bitcoin developers, bitcoin miners, bitcoin holders, and economic Bitcoin nodes to implement changes that support the growth of the Bitcoin network while maintaining Bitcoin’s key innovation as a decentralized solution to the double-spending problem.

iThe alternate networks may not die off if the hard fork change proposed is a change to the mining algorithm itself. In this case, there is a possibility that the miners on the old chain will continue mining and serving the users who prefer the status quo to the new mining algorithm.

 

ii A hard fork change could be implemented without miner support if the change is a change to the mining algorithm itself that renders the previous network of miners obsolete.


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

From Platforms to Protocols

Last night I attended a great Sharers of San Francisco meetup organized by Chelsea Rustrum, an author and sharing economy consultant based here in the city. The event featured two presentations, one by Chelsea and another by Felix Weth, founder of the Fairmondo cooperative. The topic of this meetup was value creation and distribution, exploring ways that people can take part in the monetary wealth generated by the platforms they participate in. There were echoes of the recent Platform Cooperativism conference throughout the event. People are definitely interested in an alternative to the “Death Star” platform model that is taking up increasingly large parts of the economy.

At the meetup there was a lot of interest in the coop model of Fairmondo, with some attendees mentioning alternative methods of distributing monetary value back to platform members using automated smart contracts e.g. blockchains. A common desire that was expressed was for members to have a say in the direction of the platform, and for the platform itself to express the values of its members. It was pointed out that the challenges of scaling a cooperative with this model are not unlike the challenges of scaling democracy itself. And if the American experiment has shown us anything, it is that democracy does not scale well. How to reconcile these desires for both democratic participation and scale to compete with the likes of the platform Death Stars?

I believe that there is a third option which breaks the “capital vs democracy” dichotomy of corporate and cooperative platforms, and that is open protocols. An open protocol is a set of rules enforced by code which anyone can implement and integrate into their application. Open protocols can also be forked or upgraded at-will if they no longer serve the interests of their users. Protocols govern the interactions between users without the need for third-party enforcement; protocols are self-enforcing and are usually governed by meritocratic rather than democratic processes i.e. changes are made based on the technical merit of a proposal rather than popular support alone (though technical merit can lead to popular support). The requirement for technical merit when deciding how to change a protocol can make protocols less susceptible to the corruption present in corporate settings and more resilient against the challenges with democracy present in cooperative settings.

The primary benefit of open protocols over both corporations and cooperatives is that an open protocol is owned by no one. There is a creator of the protocol who sets the initial parameters, but users are completely free to adjust the parameters to their own liking after the protocol is released. In the case of protocols which have strong network effects, the process for changing a protocol can be difficult once adoption reaches a certain threshold, since coordination between all necessary parties can be difficult without a central coordinating authority. Open protocols thus tend towards simplicity rather than complexity, making it more likely that more people will use the protocol since there are less details to debate over. Any advanced features that users desire are built on top of the protocol instead. Consider the history of TCP/IP vs OSI; TCP/IP, despite being a technically inferior protocol, won the network effect because it was “good enough” for most people who wanted to join the Internet.

Within the past decade or so, many open protocols have been invented that can be used to assemble platforms that can replace the corporate Death Stars. Here are a few of my favorites, with additional examples that are still in development:

Bitcoin – a protocol that can be used for transferring value, alternative to money transfer platforms like PayPal (see also: Ethereum, ILP)

Bitmarkets – protocol for trading goods and services, alternative to marketplace platforms like Amazon (see also: OpenBazaar, DropZone)

IPFS – protocol for file storage, alternative to cloud storage platforms like S3 (see also: StorJ, Sia, SAFE network, Syncthing)

Ripple – protocol for creating mutual credit networks, alternative to lending platforms like Prosper

Tent – protocol for content sharing, alternative to social media platforms like Facebook (see also: DattTrsst)

WebRTC – protocol for real time communication, alternative to video messengers like Skype (see also: Tox)

XMPP – protocol for asynchronous instant messaging, alternative to communication platforms like Slack (see also: MatrixTelehash)

Is there a protocol that you like which you think can help break the proprietary network effects of the corporate Death Star platforms? Leave a comment below and let me know!


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