There is an episode of Black Mirror called Nosedive that explains some of the reason for the creation of bitcoin as a proof of work system. As bitcoin has been growing up, the value has not been high enough to attract real corporate miners. The first of these has appeared. CoinGeek has become the first real corporate miner in bitcoin. (By “corporate miner”, I am referring to a significant private business that mines on its own, rather than individual miners or pools of smaller miners). Their investment into the infrastructure, not as a means of gambling and speculation between coins but with the goal of delivering global money signals the start of a new era and one that bitcoin was always destined to reach.
Other entities (such as SBI) will follow the leadership of CoinGeek. The importance of this cannot be understated. Bitcoin is a system has always been designed to end in data centres and corporate competition. The reason for this is to achieve stability. It is to achieve the creation of the first money that is set in stone and invariant. It is this stability that is needed for the long-term creation of contracts and which delivers the ability for bitcoin to achieve stable global money.
In the Nosedive episode of Black Mirror, the primary character seeks acceptance in a world based on social credit. Before the value of bitcoin increased long enough to become sufficient to attract corporate miners, the first stage of its development demonstrated analogously what I had termed proof of social media (PoSM).
We saw the beginnings of this with the pseudo-attack based on an old psychological deception. The use of techniques such as the UASF have no technical merit but have acted through proof of social media. The reason that this worked in the past with bitcoin comes from the distributed nature of the system. Before the overall reward increased to become large enough to attract a corporate miner, the state of the system was created through a distributed pool system. These pools are groups of many small miners with some estimates of over 150,000 miners having an association with the various pools.
The small miners are easily swayed through social media. They do not have the resources to adequately investigate many of the false claims made by developers and others who use social media platforms such as Reddit and Twitter to promote fear uncertainty and doubt (FUD) throughout the industry. This is one of the most critical reasons why the rise of corporate miners is so essential.
The mechanism used in attacking bitcoin in its early phases is similar to the oligarchical attack that is associated with proof of stake (PoS).
The transaction cost associated with investigating false claims is outside the reach of many small mining organisations. It is not outside the reach of the large groups and as these large groups start to compete we will see a more professionalised and stable version of money start to appear. Rather than switching between many coins, the large professional miner will start competing on long-term investment cycles.
It was for this reason that the US founding fathers created a representative democracy within the USA. They foresaw how a demagogue could sway the popular opinion and allowed Democratic systems to be subverted for short-term interests. This has already occurred within the US and the push to become more and more demagogic has led to a system that is less democratic.
The proof of social media attack is about using false information to sway miners into short-term interests designed to allow experimentation even when people know problems. We saw this with the introduction of CLTV and CSV. Both of these opcodes were determined by core developers to be dangerous and detrimental to bitcoin, yet those same developers renamed the proposal and implemented these opcodes in order to subvert bitcoin when they sought to introduce lightning:
We can’t safely do OP_BLOCKNUMBER. In the event of a block chain reorg after a segmentation, transactions need to be able to get into the chain in a later block. The OP_BLOCKNUMBER transaction and all its dependants would become invalid. This would not be fair to later owners of the coins who weren’t involved in the time limited transaction.
OP_BlockNumber is merely a form of OP_CLTV and was rejected by Satoshi with all Core developers admitting that it would introduce vulnerabilities into bitcoin. After people had forgotten about the vulnerabilities, these opcodes were introduced.
There is a mistaken understanding of the article referenced within the Genesis block. The reference for this article relates not banks, but demagoguery. The problem of government in a democratic system is the ease with which we have allowed politicians to enact changes to our monetary system based on political concerns and fashion. In many ways, this is analogous to the bitcoin-based social media attack we have seen in the early days. Fiat is subject to alteration on the whims of bureaucrats and politicians. This leads to instability in a system of rolling failures. As politicians and bureaucrats seek to shore up their positions using short-term alterations of money, all of which lead to long-term failures, we are left with the system that grows far slower than it would if governments kept out of the economy.
In the article from The Times, we see how government sources planned “to keep the banks on the boil” using injections of taxpayer’s cash.
Diogenes the Cynic demonstrated the fallacy associated with relying solely on social consensus and the belief of the crowd. According to one story, Diogenes visited the oracle at Delphi who instructed him to “deface the currency”. To achieve this, he sought a life based on challenging existing customs and values. For the last few years, I have stridden a similar path in public. I have created a public persona designed to challenge in a way that gets some to question and others to attack based on the mere perception of social disagreement.
I have achieved this and as a result shall change yet again.
My nature in teaching has always been Socratic. I do not answer questions directly but rather seek other people to question and query and test themselves in a manner that leads to understanding and more in-depth knowledge. This alienates many, but it is not the many that matter but the few who can continue along the path that leads to knowledge.
Money, when handed to government and bureaucrats under the control of fiat dictates become subject to the popular vote and suffers to fashion. It becomes the simple measure of political power to debase money to sacrifice long-term gains and growth to achieve short-term political outcomes.
The article listed in The Times as referenced in the Genesis block was never about the destruction of banking or government. It was referencing the political and social manipulation of money. At scale, Bitcoin is designed to be a system that cannot be easily debased. That is why it can be trusted. Money can be trusted when after greater than 20 years it remains the same. It is set in stone as once the game has started the rules cannot change. Bitcoin is designed to be stable money. It is a system that foresaw the dangers of social consensus and the attacks that will come to society through social media; the problems of social currency displayed in the episode Nosedive.
Following the path is taken by Diogenes, I have demonstrated the folly as best I can in social media, that of perceived anonymity where people do not have skin in the game. If applied to money, it is a dangerous system that leads to decay.
In a recent post, I made what some seem to be an error. It was intentional and designed to capture those with a social agenda seeking to prove my errors. There were several such pronouncements from me in the recent past.
A modem is a modulator/demodulator. This term is falsely attached to DSL devices and other systems that are not, in fact, a modem. Conventional marketing has used the term incorrectly, which is an aspect of the social flaw.
The misconception that many have is the nature of a modem. When I worked for the ISP, OzEmail in the early 90s I headed up the corporate services engineering division. Those clients who were not large enough to have 2Mb leased lines would commonly use a bonded modem service. This is not something that most home users would ever consider, in this, corporate users would connect multiple phone lines into a single virtual line.
A device containing 10 modem (for the correct plural of the term modem in this use is modem not modems) would make a single connection allowing a higher speed connection than would be possible on a single phone line. Multiple analogue modem attached to multiple dial-up links over POTS would be bonded to form a single channel link. The aggregate throughput achieved using bonded connections comes close to the aggregate bandwidth of the bonded links. It is a play on words as many now use the term modems though not technically correct for these are a single modulation-demodulation system contained within a bonded connection that this was the intention of my post. To gain social favour to show and demonstrate the error of jumping to conclusions without fully considering the entire situation.
In his series, Foundation, Asimov talked of future history. We already see many within the bitcoin community and others within alt coins crying for the creation of off chain solutions. All of these lose the benefits that come with the pseudonymous system that holds global data and network patterns for an eternity.
Nietzsche talked of the difference between slave and master philosophies. Unfortunately, the nature of such systems has been taken to a horrible misrepresentation by those interested in socialist control. Nietzsche did not seek a system of the strong dominating the weak. He proposed the system where the tough act as stewards or governors, as business leaders offering guidance through their action and work.
It is little-known outside a few that know me well that I was heavily involved with the Uniting Church in Australia. I was a pastor for some time and was heavily involved with uniting financial services where I acted for several years as a trustee to the banking operations of the church organisation.
Presbyterian churches are founded as most Protestant organisations on a work ethic. One of the main reasons that many listen to the false idolatry of proof of social media is the deceptive cry, ‘Do less’. People who have not finished university raised on (social media) platforms that make them believe achievement doesn’t require work and effort.
The reason for this false and deceptive claim is a call for power. They seek others work less so that they can achieve more and deliver more using the efforts of others without delivering just returns. Bitcoin is not proof of stake and forms a system of enduring work. This is something many such as Bitmain seek to alter. In proof of stake, once you have achieved, you do not need to keep trying, to struggle to be better. Bitcoin is a Red Queen game. This allows new entrants and ensures that all parties focus on the development of solutions designed scale and grow bitcoin. Perversely, proof of stake does the opposite; it allows those who have power and money to maintain control without doing any more.
It is a stable capitalist system, sound money that can deliver the requirements outlined in detail in Adam Smith’s Theory of Moral Sentiments (1759) to achieve an equitable capitalist system designed to deliver growth and enable more people than ever before to escape poverty.
It was necessary for bitcoin to pass through this stage of its growth. As it matures, there will be other battles following this one. This is but the first. In this initial struggle, we see it seek to throw the shackles of social control from off its shoulders and as with Atlas to shrug.
We will see the next two years solidify the first stage of bitcoin. Following this, six and ten years will mark radical changes within the market. In each of these, we will see the stronger growth and development of corporatisation within bitcoin. Global competing groups will emerge each seeking to gain further control of a smaller and smaller reward that increments only through transactional growth. The result, larger and larger block sizes and hypercompetitive systems.
Bitcoin is stable global cash. It is through international competition, not of small home users and hobby nodes but from large corporate entities that we will gain this stability and solidity of the world’s first stable money.