Bitcoin Core contributor Jonas Schnelli was recently featured in a panel discussion about improvements to Bitcoin at the 2016 MIT Bitcoin Expo. During the Q&A portion of the panel, an audience member asked the participants about the previous presentation by the World Bitcoin Network’s James D’Angelo in which he articulated the idea of replacing miners with elected officials.
In general, the panel, which also featured Blockstream core tech engineer Mark Friedenbach, Blockstream mathematician Andrew Poelstra and Lightning Network co-creator Joseph Poon, had a negative reaction to the concept of using democracy to handle changes to Bitcoin’s consensus rules. Schnelli used his experience with direct democracy in Switzerland to make his points.
Voting Requires an Informed Public
Although Schnelli has a positive take on Switzerland’s use of direct democracy, he does not view the system as a useful option for Bitcoin. In his view, the intricate, technical details of Bitcoin make direct democracy a poor choice for governance. Schnelli explained:
“Voting or democracy is good, but I live in Switzerland ‒ one of the only countries where we have direct democracy ‒ and with democracy you need to understand the topic you’re going to vote about. Who is able to vote about Bitcoin technical topics? Even the miners ‒ they don’t really get the technical essence of the problem.”
Indeed, many representatives of Bitcoin’s network hashrate have decided to default to Bitcoin Core on development issues. Although there is widespread support for a 2-megabyte block size limit among Chinese exchanges and mining pools, those companies are, as of now, willing to accept that change only if it comes from Bitcoin Core.
On the topic of voting on changes to the Bitcoin protocol, Schnelli added:
“Voting means you really need to fully understand what you’re going to vote about. As soon as you say everybody needs to vote ‒ everybody needs to study the problem for a couple of days ‒ is it realistic? Who is able to judge?”
Lobbying and Propaganda Come with Voting
Schnelli also is uncomfortable with bringing some of the negative aspects of politics into development decisions related to Bitcoin. He noted:
“With voting comes also, kind of, lobbying ‒ people and companies collecting money to influence people. I see that back in Switzerland where we vote about law changes, not the president. It’s all about money and propaganda.”
Trace Mayer, a longtime investor in Bitcoin and Bitcoin-centric companies, recently shared similar thoughts on who should be making decisions related to the protocol. In his view, there is no competition for the experienced contributors to Bitcoin Core. Mayer also has stated that Bitcoin is a meritocracy, which is a form of governance where power is awarded to individuals based on their abilities.
Proponents of a more democratic approach to Bitcoin governance, such as Coinbase CEO Brian Armstrong and Bitcoin Classic developer Gavin Andresen, say their vision of Bitcoin governance would allow the protocol to evolve and adapt more efficiently over time.
Bitcoin Is a Technical Topic
Schnelli summed up his thoughts on democracy for Bitcoin governance during his final comments in regard to the audience member’s question. He stated:
“I mean, I like [the direct democracy in Switzerland], but it’s this political thing; it’s not technical stuff. It’s something everybody can talk about. But can the people in Bitcoin talk about what they really want?”
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, NASDAQ, RT’s Keiser Report and many other media outlets. You can follow@kyletorpeyon Twitter.
The post Jonas Schnelli on Why Elected Officials May Not Be Good for Bitcoin appeared first on Bitcoin Magazine.
At the Money 20/20 Conference in Copenhagen last week, both Bitcoin and particularly the Blockchain were discussed widely. The conversation has shifted vastly over the past 3 years, as established financial players are actively looking towards Blockchain technology to benefit their businesses. There were 4 Bitcoin centric presentations, and the following article summarizes them as follows.
Also read: Bitcoin Taxes 2016: Accurately Reporting Bitcoin Usage
On Wednesday morning, banking super star Blythe Masters, formerly of JP Morgan and now CEO of Digital Asset Holdings, delivered an evangelistic speech which hailed the justified business benefits of blockchain technology and its future in banking, even amongst the largest financial institutions. One of the Keynote speeches at Money20/20 Europe, Ms. Masters captivated the audience and stimulated an excitement for the seemingly inevitable implementation of blockchain-like technology into Wall Street. The entire day, Blockchain was a hot topic as executives from large banks and payments companies were curiously and attentively listening to the discussion around the blockchain that was kickstarted through Ms. Master’s enthralling and insightful talk.
One notion that will be scoffed at in Bitcoin circles, however, was that Ms. Masters talk generally discredited the work that Bitcoin has already provided in learning about distributed payments systems, and also did not mention the necessity to have an inventive token or fully independent miners managing these operations. Instead, Ms. Masters focused on the potential benefits of shared financial infrastructure for large banks provided through implementing a Blockchain equivalent as a means towards improving the existing, globally compartmentalized financial backbones. Ms. Master’s talk provided a unique and valuable window into the ways through which Wall Street is viewing the potential of Blockchain technology.
On Unlearning From Bitcoin and the Future of Blockchain Technology
Throughout her talk, Ms. Masters pronounced the benefits of shared database infrastructure across financial institutions, yet generally downplayed the connection of Blockchains to Cryptocurrencies and incentive tokens for miners. Large banks are definitely looking into distributed ledger technology, but having shared financial architecture across banking institutions, who will potentially own or solely monitor the nodes in the network, does not necessarily mean that the database architecture qualifies as a “blockchain”. Speaking to the topic of Bitcoin versus the Blockchain, Ms. Masters remarked:
Ms. Masters: “Everyone has heard enough about Bitcoin, cryptocurrencies, and Blockchains to have been confused in at least one dimension as to what this is all about. And therefore, when asked to explain this space, I often ask people to forget pretty much everything you’ve heard about blockchains, crypto-currencies, and bitcoin, and instead dumb it down a lot and think about something no more complex or intimidating than good, old-fashioned database technology… But when people realized or were able to distinguish between those two topics, and realized that many features of the public Bitcoin Blockchain are not a necessary feature, or are essentially technology specs that can be changed for use in different context, then this just becomes a discussion about enterprise technology.”
When asked about the separation of Bitcoin and a Blockchain in the following panel, Bobby Lee of BTCC said, “To me, it’s always linked at the hip. You can’t have Bitcoin without a Blockchain. Nor can you have the true, functioning blockchain without Bitcoin. So for the people out there trying to have a Blockchain without Bitcoin, that’s not realistic.”
On Working With Regulators and the Timeline to Integrate Blockchain into Banks
Blockchain’s implementation into banking seems inevitable, as the overhead required to monitor the flow of financial instruments across compartmentalized infrastructure is weighing down bank’s profit margins. Recognizing the business benefits of lowered costs, increasingly secure data maintenance, and shortened latency times, banks are keen to realize the benefits of shared, mutualized databases. Ms. Masters remarked that “The timeframe it (Blockchain) will take to get to be mainstream is more like 5-10 years.” Banks are working with the regulators to ensure that blockchain technology is implemented in a legally compliant way that will meet existing KYC and AML regulations. As Ms. Masters remarked:
Ms. Masters: “Now, bear in mind the regulators are already armed with a tremendous amount of power when it comes to sensitive market infrastructures. If you want to operate a sensitive market infrastructure, you are by definition a heavily regulated entity, and you have to answer to your regulators, obvious questions. Do you have the backup, the capacity, the resiliency, the redundancy, and all of the other features that you need if you want to be in that line of business, and if you don’t, you shall not be in that line of business, it’s pretty straightforward. So the ability that regulators have to control the development of technological infrastructures in the space is well established. It doesn’t require the re-invention of the law. It means that those like ourselves (Digital Asset Holdings) who are working on the technology need to be able to answer these sorts of questions satisfactorily.”
Do Regulators Have Increased Awareness Now?
Regulators around the world are much more aware of Blockchain technology and Bitcoin than the general public, and are working to research it and understand it actively. It is not a joke when people say that Bitcoin and the Blockchain are the most impactful invention since the Internet.
Ms. Masters: “They are many regulators who are publicly pronounced on the subject not unambiguously endorsing the concept, they are acknowledging that there are potential benefits. That if responsibly pursued, could be of great interest to them. Regulators absolutely, no question have more awareness and insight of this. ASIC (Australia), Bank of England, Federal Reserve, they are acknowledging that there are potential benefits that if responsibly pursued could be of great interest to them.”
On Creating Common Standards
Discussing the ongoing work of the Hyperledger project, Ms. Masters shared her optimism around progress in development. While there are no details around how this new platform will offer an incentive token, who will control the miners and how mining power will be distributed, plans to enable blockchain scaling, off-chain or lightning network implementations, or governance procedures, there are significant resources being put into the ongoing efforts.
Ms. Masters: “Common standards are being discussed. But perhaps more importantly, the creation under the auspices of the Linux Foundation,
OpenBazaar is integrating the InterPlanetary File System (IPFS) into their decentralized online marketplace. While no official announcement about this move has been made, OpenBazaar developer Chris Pacia, who is currently working on the IPFS integration, has shared some of the details related to this change with Bitcoin Magazine.
According to Pacia, the main advantage of integrating IPFS into OpenBazaar will be the increased availability of storefronts. Currently, a store operator must maintain his or her own server at all times or pay someone else to do it.
What Is IPFS?
IPFS is a hypermedia distribution protocol that enables the creation of distributed applications. The team behind IPFS is creating a peer-to-peer file system that can be accessed by all of the computing devices in the world. The brains behind this new protocol, Stanford graduate Juan Benet, has said that IPFS allows people to create websites and web apps with no central server. He added, “They can be distributed just like the Bitcoin network is distributed.”
What Are the Advantages of IPFS for OpenBazaar?
Since OpenBazaar is a marketplace with no central server, IPFS appears to be a solid option for hosting storefronts.
Pacia agrees with this sentiment. He told Bitcoin Magazine, “The main advantage is data will become more distributed and most of it should be viewable even if the originating node is offline.”
Pacia went on to describe the current issues with OpenBazaar when it comes to opening and operating a store on the network:
“We have a situation now where you have to fetch store data from only one person, and if they have a slow or buggy connection (or if they get attacked), then you can’t access that data, despite potentially hundreds of other users having that data from a previous download.”
Essentially, IPFS will allow OpenBazaar users to connect to specific stores via many other peers who already have that data rather than just the owner of the store.
“So IPFS seeds everything you download which makes the data much more permanent. It also provides a more robust DHT implementation than what we have written, and it’s better to spend our resources collaborating than trying to maintain our own.”
Many early users of OpenBazaar have complained about having to operate a server 24/7 to keep their stores “open” on the network, which is why the removal of this requirement has been a top priority for the development team behind the project.
Layering Anonymity on Top
Other commentators have wondered whether Freenet may be the best option for OpenBazaar, but it appears the network’s developers have no intention of going in that direction at this time. Pacia noted, “I don’t know [enough] about Freenet to comment on it. But what attracts us to IPFS is its scalable approach to data replication.”
Although OpenBazaar launched without native support for anonymizing networks such as i2p or Tor, OpenBazaar project lead Brian Hoffman recently reiterated the development team’s dedication to privacy.
“Anonymity can be layered on top of [IPFS],” Pacia told Bitcoin Magazine. “It won’t be too much work to enable onion nodes to connect to each other.”
OpenBazaar’s support for IPFS is not strictly theoretical, as code related to this change is already available on GitHub.
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured onVICE Motherboard, Business Insider, NASDAQ, RT’s Keiser Reportand many other media outlets. You can follow@kyletorpeyon Twitter.
The post OpenBazaar Integrating InterPlanetary File System to Help Keep Stores Open Longer appeared first on Bitcoin Magazine.
DTCC’s CEO remarked in a new shareholder letter that the company seeks a leadership role in the development of blockchain tech.