Reflection · Tech

#TrumpHeartsBitcoin

I’m not usually one to remark on the president’s tweets. But this is a ‘yuge’ exception. For the first time ever, a sitting US president made a public statement about Bitcoin.

Of course Mr. Trump is not a fan of Bitcoin…

Bitcoin is free speech money. Bitcoin cannot be censored. Bitcoin cannot be used to reliably tax Americans. The Federal Government has no monetary authority in a Bitcoin economy.

Volatility

Trump states that Bitcoin’s value is volatile. This is true. But it’s a special kind of volatility. Its a volatility that trends upward.

The yearly lows of Bitcoin’s price have consistently been getting higher and higher. For 10 years, the value of BTC has been trending upward and the rate at which it grows is increasing.

Bitcoin is volatile because it is a pure reflection of the market. Based purely on supply and demand. The value of USD is artificial. Set by the Federal Reserve and through a mess of unnecessarily complicated schemes like fractional reserve banking and federal interest rates, is the value of USD kept relatively stable. Albeit, the USD looses 1-3% of its value each year to inflation.

If you held Bitcoin for 3 years starting at any point since it’s inception, you have gained significant value. Imagine if you knew that your money would be worth more tomorrow than it is today! You’d probably save more of your money and only spend on what is necessary to live. If you saved it long enough, you might treat yourself to a new car, or nice house.

Oh no! What about the economy?! Surely, theres no room for economic progress under a Bitcoin-backed economy! Who would work, if their money was working for them?

It is true that the economy would suffer initially. But not in the way we’re used to seeing the economy suffer.

We use GDP as a measure of economic health. GDP is a terrible measure of economic health. GDP measures how much stuff a country produces. Optimizing GDP leads to a short-term (high time preference) mentality. Optimizing GDP is why our oceans are filling with plastic, most people hate their jobs, and most people are in debt.

A Bitcoin economy would lower society’s time preference. We would make less stuff, but the stuff we did make would be of better quality.

Based on Thin Air?

Trump says Bitcoin’s value is based on thin air. This seems to be the case, until you start to dig in to what really makes Bitcoin valuable.

People value scarcity.

An artist sells prints at lesser price than the original. Limited editions cost more than the factory model. There will only be 21 million BTC.

People value connectedness.

Bitcoin is money to connect the world. Before BTC, sending money to another country was difficult. Sending BTC to my neighbor is no different than sending it across the world.

People value security.

Banks charge fees to protect your money. People pay those fees. Bitcoin is secured by the fundamental laws of physics using math carried out by an astronomical amount of computing power. It’s getting more secure every day.

So you’re a Criminal then?

I can guarantee that more criminal activity is funded with USD than BTC. This is mostly because BTC is very easy to trace. There are methods to increase privacy with bitcoin but bitcoin is not yet private by default. It’s much easier to achieve sufficient privacy through in-person cash transfers.

Society is just starting to wake up to privacy cancers thanks to some royal goofs over at Facebook Inc. We’ve given up much of our privacy online but stop and think about how much we give away every time we swipe our credit card.

The fact that Bitcoin is used for criminal activity is a sign that it’s better at guarding your private data than PayPal or wire transfers. Private money is a tool just like free speech. You can use it for good like anonymous donations or protesting or you can use it to break the law like laundering money or yelling “fire!” in a theater.

The fact that our president is against such liberties as free speech money shows how far our country has deviated from its founding values.

First they ignore bitcoin. Then they laugh at bitcoin. Then they fight bitcoin. Then bitcoin wins.

Tech

The Future of Privacy in Bitcoin

Ahh, the early days of Bitcoin… Back when everyone thought they were buying weed on the Silk Road anonymously.

Bitcoin has since become so easy to trace thanks to KYC (Know Your Customer) regulations and blockchain analysis. Today, it would be a DEA agent’s wet dream if every drug cartel used BTC to transact.

For a time, the counterattack was to use BTC mixing services. These services would send your bitcoins to many addresses before reaching the destination, obfuscating the actual transfer of value.

Mixing is kinda old school now. Thanks to SegWit (a change added to Bitcoin within the last few years) you can now send multiple payments in a single transaction. This is called coinjoin and it makes it really hard to tell which wallet sent money to which address.

Basically, you use a wallet that supports coinjoin like Wasabi or Samurai and you submit your coinjoin transaction to be included in the next round along with other anonymous transactions. If the threshold number of transactions is met in time, the coinjoin succeeds. Otherwise it fails and you’ll have to try again later.

Second layer networks built on top of Bitcoin, like The Lightning Network, are already enabling people to send BTC with almost no fees and increased privacy. In another few years we won’t even have to go through extra steps, sending BTC will be private by default.

Transactions on the Lightning Network are separate from the blockchain. Transaction information is not public on this network. The lightning network (LN) is a graph of nodes connected by payment channels. If A and B are nodes in LN, then A can pay B some bitcoin if they are connected via a channel. Even if A does not have a channel open with B, they can still transact as long as there exist some path A->C->B where C is any number of nodes connected together with channels.

When a payment happens on LN, it is sent from one node the next and passed along until it reaches its destination. The beauty of this construction is that any particular node in the path only knows two things about the transaction: which node was before it in the path and which node to send it to next. No single node knows that A sent money to B except for A and B.

There are currently proposals being developed that will allow interoperability between BTC base layer and Lightning payments. As the Lightning network matures, people using BTC for payments (as opposed to stores of value) will be incentivized to move their funds to Lightning Wallets for lower fees, instantly confirmed payments, and enhanced privacy.

In the near future, sending digital money will use LN as a second layer to BTC just as sending digital information uses IP as a layer to TCP.

Long live TCP/IP

Long live BTC/LN

Tech

The Web Without Ads: A Web 3.0 Funding Model that Values People More than Attention

Humanity has been graced with The Internet for a few decades now. It seems as if we as a society are asking ourselves the question, “Are we better off now than we were before” with regards to the conectedness (or lack thereof) brought on by the Internet we know today.

In Digital Capitalism, a Sam Harris podcast interview with Douglas Rushkoff, best-selling author and technology/media theorist, the case is made that the economics and incentives driving the internet are fundamentally flawed.

Web 2.0 services are almost completely funded by paid advertising in a model where more attention = more profit. Therefore, the incentive for multi-billion dollar tech giants is to make their products addicting and turn their “customers” into addicts; which brings an eerie new meaning to the software development term for “users”.

Loneliness, depression, anxiety, laziness, sleep disorders, and filter bubbles — this is what the current model has caused for millions of individuals. Where is the Cyber-Utopia we were promised? Thanks to the ubiquity of technology and internet access we have today, there is a better way!

While none of these problems will go away over night, the next generation of Internet seems to be a step in the right direction. A Web 3.0 built with decentralized technologies shows promises of eliminating the systemic downsides of Web 2.0 and it all starts with how Web 3.0 services get paid.

A Proposed Web 3.0 Funding Model

Micro-payments. Hold on, don’t click away yet! I’m not saying that you should have to pay a fraction of a cent to read this blog post. What I’m saying is that you should become a partial owner of the internet as a whole, and as such, earn your right to use it as you please.

Let me explain…

Projects like the Inter-Planetary File System (IPFS) and Storj are building the backbone for a decentralized Web 3.0. Both projects are abandoning the client-server model in favor of a peer-to-peer file storage protocol. Anyone in the world with an internet connection can rent free space on their hard-drive to the network and be compensated in a cryptocurrency token.

Distributed cloud storage projects make a lot of economical sense. In this model, the content we access on the web is not housed in a multi-million-dollar data center with paid 24/7 security guards and a $1M/day bandwidth bill. Instead, it lives in people’s homes, encrypted, and stored with redundancy, using people’s extra bandwidth that they’re already paying for.

Now imagine if you’re new Web 3.0 capable router had a few terabytes of free space onboard. Plug it in, stuff it in your closet and forget about it. Every day, it earns Internet Access Tokens for storing and serving up the bits of data that make up the content on Web 3.0. You’re Web 3.0 browser keeps track of your Internet Access Token balance and sends micro-payments to the services you use as you browse the web.

This model puts the control in the consumer’s hands and lays the groundwork for a internet where value added is rewarded more than attention stolen. It maintains the set-it-and-forget-it user experience of web 2.0 as well as the convenience of the free-to-use model we’re used to.

Tech

What I Tell Crypto Non-Believers

We’ve seen this before

When a revolutionary technology comes around, it’s easy to get caught up in the hype without really understanding what the fundamental disruption really is.

I saw this happen in the dotcom boom when anyone with a website claiming to be a company got showered with money from investors. The investors and entrepreneurs who won after the crash were the ones who understood what the internet really did that could have never been done before.

The internet provided a new information exchange. For the first time ever, anyone with a connection could send and access information globally.

I saw a similar play happen with “crypto-mania” in late 2017. It seemed that anyone with a whitepaper and an ICO could rake in at least $1M USD. There’s the Useless Ethereum Token and, of course, Dogecoin.

I believe the fundamental disruption of cryptocurrency is that for the first time ever, we have a value store that is both digital and scarce.

What do I mean by this?

chart showing how bitcoin compares to gold and cash

Well, before, we had a currency like gold. Gold is scarce – there’s only so much of it on the planet – but it is clunky and not easy to trade around. Imagine mailing Netflix $10 in gold coins every month.

Of course, this is why we have fiat currency or dollars. Dollars are great because we can carry lots of them in our pockets and banks can even digitize them so paying for Netflix (and that gym membership) happens automatically each month.

But dollars are not scarce, the Federal Reserve can always make more. There’s nothing wrong with this – in fact, it causes healthy inflation. This is just one of the inherent properties of fiat.

A cryptocurrency like Bitcoin is scarce – based on math and cryptography, we know that there will never be more than 21 Million BTC in existence. Bitcoin is also fundamentally digitalin fact, it’s programmable.

Just like gold and cash have different properties, so does a new class of currency like Bitcoin.

With a cryptocurrency, not only could you pay for Netflix, but your self-driving car could earn it by delivering take-out and use it to pay for gas on your behalf.

The simple truth is that nobody can “un-invent” cryptocurrency. It’s already here and millions of smart driven people are figuring out how it will fit into your daily life.

What do you think? Will there be another crypto-mania? Or have we seen the last of crypto for a long, long while?

Tech

Blockchain and the Libertarian Uprising: The Bitcoin Example

This is part 1 of a 5 part series adapted in blog format from my senior research paper titled “Blockchain and the Libertarian Uprising“.

Why do we trust a currency backed by a government that is fourteen trillion dollars in debt? Ever since 1971, when Nixon announced that US dollars could no longer be redeemed for gold, the value of the dollar has been based on our faith in it; we trust that a dollar with be worth something tomorrow, so we accept dollars today (Source). Everyone who uses the dollar has put their trust in the central authority of the US Government (The Treasury, Federal Reserve, etc.).

If you are a government, you create currency by manufacturing tokens of exchange and stimulate the flow by requiring that all taxes and fees be paid in your approved token. If you are Satoshi Nakamoto, you create currency by releasing ingenious code designed to run on an infinitely scalable network of globally distributed computers. Enter bitcoin; enter the blockchain. “Now we have a small piece of pure, incorruptible mathematics enshrined in computer code that will allow people to solve the thorniest problems without reference to ‘the authorities’” (Source).

With blockchains, individuals no longer have to trust in an authority to keep secure records. Blockchains are to trust what the internet is for information (Source). If the internet has taught us anything it’s that when change comes, it comes fast. Suddenly, central government may seem as archaic as the feudal system. Perhaps, society no longer needs a government-backed currency to facilitate exchange. What if individuals had total control over their data online? Maybe a liquid democracy is not only possible but necessary in today’s blockchain economy. Libertarians have long advocated that the sole purpose of government is “to protect individual rights to life, liberty, and property, and not abrogate these rights” (Source). By this Libertarian view, the United States government is bloated with unnecessary duties that blockchain technology is poised to organically force into obsolescence. Should the blockchain fulfill its full potential, it will become the backbone of the Libertarian uprising.

THE BITCOIN EXAMPLE

Bitcoin is the first and largest implementation of a digital globally distributed decentralized ledger or “blockchain”.

“A blockchain is a shared, distributed database that acts as an immutable ledger, recording entries and verifying them across a number of independent participants. Once an entry is made, it’s marked with a unique hash code that places it sequentially in the ledger” (Source).

In the last decade, bitcoin has demonstrated that a currency can exist without any government to endorse or perpetuate it.

Bitcoin is like digital gold that can be traded from person to person without a bank to keep track of all the transactions and levy fees (Source). However, the gold analogy is misleading. An individual’s bitcoins are not stored in a computer file or as a record in a central database like a bank account balance. All of the bitcoins in “circulation” lie in bitcoin’s blockchain which is an active record of every bitcoin transaction since bitcoin came into existence in January 2009 (Source).

Every transaction recorded in the bitcoin blockchain includes the sender, the receiver, and the amount of bitcoin sent in the transaction (Source). Therefore, any individual’s bitcoin balance can be determined by simply adding up the individual’s incoming bitcoin and subtracting the outgoing bitcoin for every transaction that individual has ever taken part of. The bitcoin blockchain is assembled by a globally distributed network of computers that verify each and every transaction (Source).

Roughly every 10 minutes, like the heartbeat of the network, all the transactions that have occurred in that span are placed into a “block” and are cryptographically signed in such a way that it mathematically relates to the all the transactions in the block that came before it (Source). The computers that do this verifying and cryptographic hashing are called “miners”. Other computers, called “nodes”, store complete or partial copies of the entire blockchain and are updated as new blocks are appended (Source).

The computers that comprise the network that builds and verifies the Bitcoin blockchain are owned and operated by individuals who are incentivized for their service to the bitcoin network by automated bitcoin payouts proportional to the amount of computing power they provide (Source). There is a fixed supply of 21 million bitcoins that can ever exist (Source). Currently, 12.5 bitcoins are created every time a new block is added to the blockchain (Source). These newly created bitcoins serve as the payout to miners mentioned earlier. Individuals who wish to use bitcoin need only a small piece of software called a “bitcoin wallet”. Each wallet issued has a unique address made of a string of random numbers and letters (Source). In order to send someone bitcoin, only their wallet address must be known; thus making bitcoin a pseudo-anonymous currency.

Part 2: The Blockchain Principles

Tech

Blockchain and the Libertarian Uprising: The Blockchain Principles

This is part 2 of a 5 part series adapted in blog format from my senior research paper titled “Blockchain and the Libertarian Uprising“.

THE BLOCKCHAIN PRINCIPLES

The bitcoin example allows us to contextualize the disrupting effects blockchain. Don Tapscott, the co-founder of the Blockchain Research Institute, outlines “7 Design Principles of the Blockchain Economy” as follows:

  1.  Networked Integrity
  2. Distributed Power
  3. Value as Incentive
  4. Security
  5. Privacy
  6. Rights Preserved
  7. Inclusion

These are the disruptive key features offered by blockchain technologies. (Imagine a similar list, “Design principles of the Internet Economy” with features like instant communication, information commoditization, universal access, etc.) Each principle will be explored further with reference to bitcoin’s blockchain structure.

Networked Integrity

Bitcoin maintains integrity across a scalable network by relying on the infallible nature of mathematics. Every step in the process is mathematically verified and any attempt to commit fraud at any point in the process will be detected by the rest of the network and rejected (Source). In this way, blockchains can create automated consensus about what happened in the real world. In the case of bitcoin, the millions of miners on the network must come to an agreement about “who” sent “how much” to ”who”.

Distributed Power

Bitcoin is not owned by an individual, corporation, organization, or government. Bitcoin belongs to everyone who uses it and rewards everyone who works on it (Source). This means that there is no single point to attack, no individual to prosecute and no corporation to shut down. The entirety of bitcoin is sustained by the millions of wallets, nodes, and miners all acting interdependently over the internet. No single entity can shut down bitcoin or enforceably ban its operation or use (Source).

Value as Incentive

The bitcoin blockchain protocol perfectly aligns the incentives of everyone involved (Source).

Merchants are incentivized to accept bitcoin because transactions can settle in minutes rather than days (Source).

Users who value anonymity are attracted as well as those who regularly send international payments (remittances) because bitcoin bypasses currency exchanges who can charge hefty fees.

Miners are incentivized to strengthen the network for bitcoin payouts.

The truly paranoid and heavily invested are incentivized to maintain a complete copy of the blockchain (and become nodes) to make absolutely sure their bitcoin is safe in the event of a network malfunction or massive attack.

Even attackers are incentivized to strengthen the network. For the amount of computing power it would take to overwhelm the bitcoin network and successfully write a fraudulent transaction on the bitcoin blockchain, it would be much more profitable to use that computing power to earn bitcoins by mining (Source). If a significant portion of miners go offline, the payout for new miners increases (Source).

Governments are even incentivized to support bitcoin or at least refrain from banning its use. When China’s authoritarian government declares its plan to enforce its 2014 ban on bitcoin, its people flock to the cryptocurrency in droves (Source). Enforcing such a ban is nearly impossible without targeting each and every individual using bitcoin.

“Like holding a handful of sand: the harder [governments] squeeze, the quicker it slips away” (Source). 

Coin-based blockchains like bitcoin create value to incentivize its support and growth.

Security

Everyone using bitcoin must use secure protocols. Encryption makes up the “crypto” in “cryptocurrency” and encryption is used at every step to ensure data is only readable by the parties that data is intended for. Damage as a result of an individual’s recklessness is limited to that individual. There’s no single point of failure.

Privacy

Before bitcoin, individuals needed to trust a central authority like a bank or PayPal to send money electronically. Bitcoin eliminates the need to trust another individual. As such, it eliminates the need to know the other’s identity. It is sometimes possible to trace a bitcoin address to an individual through some detective work. It is also possible for an individual to remain anonymous while using bitcoin through various external methods. Other cryptocurrencies, like Monero, have discovered how to create truly anonymous identities using blockchain (Source).  Blockchains allow the possibility for transacting information with anonymity and privacy in a world where individual privacy is being encroached at every level by governments and corporations alike.

Rights Preserved

An individual’s right to ownership of his or her bitcoins is recorded on the bitcoin blockchain. It is openly transparent for anyone to see. This makes everyone’s right to ownership of his or her bitcoins apparent and enforceable. Blockchains can record records of any kind in a way that is permanent, apparent, and unalterable.

Inclusion

Finally, bitcoin is inclusive; it can be used by anyone with access to a method of sending data. Although most people use computers and smartphones to transact with bitcoin, the bitcoin protocol is agnostic about how it receives transaction data. This allows individuals in developing countries to transact bitcoin using text messages from a decade old flip-phone (Source). Bitcoin’s inclusion principle makes it accessible to everyone without discriminating against credit history or economic status, opening the door for the estimated six billion people worldwide with no access to banking (Source).

Remember that cryptocurrencies are a very narrow use case of blockchains. These seven principles are not limited to bitcoin but rather are made possible by the blockchain technology that underpins it.

Tech

Blockchain and the Libertarian Uprising: The Libertarian Philosophy

This is part 3 of a 5 part series adapted in blog format from my senior research paper titled “Blockchain and the Libertarian Uprising“.

THE LIBERTARIAN PHILOSOPHY

Any argument claiming the fulfillment of a political philosophy must first define the tenets of such a philosophy. Additionally, in 2014, PEW research revealed that one in ten Americans identified as libertarian yet nearly 45% of respondents failed to identify elements of the libertarian ideology from a multiple choice list (Source).

Libertarianism is not characterized by a single viewpoint. Libertarians range from anarcho-capitalists who advocate the elimination of the state in favor of a free market to libertarian socialists who are anti-capitalist and would prefer to merely decentralize government (Source; Source; Source). However,  all Libertarians are united by a belief in individual liberty, economic freedom, and government skepticism (Source).

David Boaz, author of Libertarianism: A Primer lists the “Key Concepts of Libertarianism” as follows:

  1. Individualism
  2. Individual Rights
  3. Spontaneous Order
  4. The Rule of Law
  5. Limited Government
  6. Free Markets
  7. The Virtue of Production
  8. Natural Harmony of Interests
  9. Peace

Individualism

Libertarians hold that the basic unit of analysis in a society is the individual (Source). “Only individuals make choices and are responsible for their actions” (Source).  

Individual Rights

All individuals have a right to life liberty and property. These rights are not given to them by government but are inherent to being a human being (Source).

Spontaneous Order

While order is necessary for individuals to survive and thrive in a society, order does not necessarily need to be imposed by a central authority (Source). “The great insight of libertarian social analysis is that order in society arises spontaneously, out of the actions of thousands or millions of individuals who coordinate their actions with those of others in order to achieve their purposes” (Source). By this view, the natural comings and goings of individuals acting interdependently with one another fosters a natural order that is sufficient for individuals to thrive in.

The Rule of Law

Libertarianism does not advocate that individuals act however they wish and that nobody should be able to intervene. Rather, they propose a society of liberty under law (Source). Individuals may pursue their own lives however they intend so long as they do not impede the equal rights others. “The rule of law means that individuals are governed by generally applicable and spontaneously developed legal rules, not by arbitrary commands; and that those rules should protect the freedom of individuals to pursue happiness in their own ways, not aim at any particular result or outcome” (Source).

Limited Government

“Power tends to corrupt and absolute power corrupts absolutely.” These words by Lord Acton are dearly held by libertarians who wish to decentralize and limit government. Usually, this is accomplished by a written constitution that narrowly defines the powers and duties of a government as granted by its people. A government is granted power by its people and people should never fear their government (Source).

Free Markets

The right to property includes the right of individuals to exchange any property by mutual agreement. Libertarians believe that people will be more free and prosperous if governments minimize their intervention in individual’s economic choices (Source).

The Virtue of Production

The bulk of libertarian thought began in reaction to seventeenth-century monarchs and aristocrats who made their wealth from the productive labor of “lower class” individuals (Source). Libertarians hold that there is immense dignity in labor and that producers are entitled to the right to keep the fruits of their labor. Thomas Jefferson said in 1824, “We have more machinery of government than is necessary, too many parasites living on the labor of the industrious.” Today, libertarians see a new class of bureaucrats robbing the middle class through taxes and giving the wealth to non-producers (Source).

Natural Harmony of Interests

Libertarians believe that in a peaceful and just society, the individual’s interests have a natural harmony with others in the society. The market may deem an individual’s interests unfeasible and so that individual must adapt, yet still there is harmony. It is only when governments begin to offer handouts to specific parties based on political pressures that conflicts of interest arise and people begin to behave in unjust ways.

Peace

“Throughout history, war has usually been the common enemy of peaceful, productive people on all sides of the conflict” (Source). Libertarians recognize that conflict and war never benefit the common people and almost always benefit the elite in a society.

As David Boaz recognizes, these values tend to encompass the span of modern political thought in the western world. Libertarianism is not just a collection of these broad principles, it strives to apply them to the fullest extent, more radically than modern thinkers and governments intend. However, every day new exceptions to these principles are being made by Washington and Wall Street alike that threaten individual rights on every level.

Tech

Blockchain and the Libertarian Uprising: The Libertarian Protocol

This is part 4 of a 5 part series adapted in blog format from my senior research paper titled “Blockchain and the Libertarian Uprising“.

THE LIBERTARIAN PROTOCOL

One of the first promising non-cryptocurrency applications of blockchain is the smart contract. A contract is generally a written agreement between two parties (e.x. A tenant agrees to pay $600 per month to lease a property for 12 months from the landlord.) Smart contracts are self-fulfilling contracts that are stored on a public blockchain (Source). Smart contracts allow “if this then that” statements and integration with the internet of things while removing the need for a centralized authority to manage the transfer of assets (Source). Smart contracts have applications in nearly any industry where asset exchange is core to operations (insurance, land title transfers, mortgages, securities, supply chain, and record keeping of any kind) (Source). Smart contracts could replace the need for heaps of paperwork, traditional centralized record keeping, banks and even attorneys.

Blockchain & Individualism

Your doctor holds your medical records, your school holds your transcript, your employer holds your work contract, your credit card company holds your purchase history and your bank holds your money. Pre-blockchain, this arrangement made sense. A trusted authority should hold the assets of individuals to ensure they are not tampered with or lost. However, since the advent of blockchains, technologists have discovered radical ways that the technology can be used to give individuals ownership of their personal assets and identities.

Blockchain Helix is one such company working to create a digital identity for individuals whose goal is  “enabling trusted and secure digital economies and societies” (Source). Blockchain Helix allows individuals to create profiles and build their online identities by adding personal information, certifications, diplomas, and official records (Source). All the information is recorded on a blockchain allowing the individual complete control over who has access to their personal information (Source). Blockchain Helix also partners with information providers to allow maximum interoperability and portability of the information (Source). “The Blockchain has brought us immutability. The combination of cryptography and distributed networks basically changes our understanding of digital security. And also it has created something completely new: An infrastructure that eliminates the need for trust” (Source).

A driver’s license contains way more information than just the cardholder’s birthday, however, we will disclose all this unnecessary information whenever we need to prove our age. Personal online avatars like the ones provided by Blockchain Helix will solve this problem of data minimization; limiting the personal data revealed to only what is needed. Blockchain implementations like this stand to give individuals more ownership of their data. After digital avatars become the norm, there is nearly no limit to the kinds of information that can be stored in them. Blockchains will create secure, trusted digital identities for individuals in this new digital society.

Blockchain & Individual Rights

Recall that libertarians believe that all individuals have the right to life, liberty, and property. While “life” and “liberty” may be a bit too abstract for blockchain to secure, property rights are where blockchain technology excels. “Property transfers enabled by smart contracts can deter fraud and improve transaction integrity, efficiency and transparency” (Source). Smart contracts remove the need for settlement agencies, deeds, and mortgage arrangements (Source). Smart contracts for property transfers are especially promising for the billions of individuals around the world who have no proof of ownership of their land (Source). Smart contracts bypass potentially corrupt government record keepers and create a secure, permanent and public account of who has the rights to a property. Before blockchains, property rights had to be enforced by either the individual or a trusted central authority. Blockchains for asset management are eliminating the middlemen and allowing individuals greater protection of their property rights.

Blockchain & Spontaneous Order

The “Spontaneous Order” tenet of libertarianism as described by David Boaz is deeply philosophical and difficult to address with only a technology like blockchain. The growth and integration of the internet into our daily lives may provide an analogy for how we could expect to see blockchains in the coming decades. After all, we no longer “log on” to the internet, we live on the internet. Similarly, as more and more processes (from supply chain, to management, government, and healthcare) become automated using blockchain technologies, we may find that society is behaving like an autonomous organism rather than a nation-state with a clear hierarchical structure.

The Economist calls blockchain “The Great Chain of Being Sure About Things” (Source). In the same way that two parties can transact in bitcoin without having to trust each other or some intermediary like PayPal, or Mastercard, blockchains are handling digitized assets without the necessary trust of an intermediary. Instead, the trust is in an network of self-organizing, self-serving actors (miners and nodes) operating by the incorruptible nature of mathematics. Well designed blockchains will create this spontaneous order out of thousands of individuals who are just going about their day to day, trading, speculating, and volunteering their computers in reward for digital tokens.  

Blockchain & The Rule of Law

In 2016, the tech non-profit Democracy Earth Foundation used blockchain to allow Colombian expatriates to express their opinion of the Colombian government’s decision to pass a peace treaty (Source). Blockchain made secure and fraud-proof electronic voting possible for expats who did not have access to traditional electoral mechanisms in Columbia. Democracy Earth Foundation wants to experiment with a sort of liquid democracy. For example, such an opinion poll could delve deep into the tenants of a specific treaty and find what clause, in particular, was a dealbreaker for citizens (Source). The Colombian Ministry of Information And Communications Technologies foresees that “governments may come to realize that the security and integrity of electoral processes is not just a matter for state control, but also an area that can be guaranteed collectively, supported by blockchain” (Source).

Prediction markets operate on the observation that large groups of people can predict future events with a fair amount of accuracy. Augur is a decentralized prediction market using blockchain to foster collective intelligence by gamifying the prediction process (Source). Augur allows anyone to create a conjecture based on the outcome of a future event (Source). Example queries include “Will Hillary Clinton win the 2016 Presidential Election?” or “Will Apple stock price rise more than 3% this quarter?”. Participants place bets on the outcomes and are rewarded if they predicted correctly (Source). Using machine learning on this model, Augur hopes to be able to harness the wisdom of the crowd to accurately predict future events (Source).

Pairing blockchain-backed voting mechanisms with decentralized predictive markets may allow individuals to provide useful input on critical policy decisions. In an age of instant global communication, representatives can routinely poll constituent views and even allow the platform for a liquid democracy. In an age of blockchain, we can rest assured that these votes are valid and that the voting system will not be compromised. Assuming high relative accuracy of prediction markets, policy makers will have a goto source for gauging how their policies will be received. The “Rule of Law” could develop out of a culmination of trustworthy polling mechanisms allowing politicians to better gauge public opinion and serve their constituents better.

Blockchain & Limited Government

Of course, assuming that politicians are ultimately driven by their devotion to constituents is a very optimistic view of the contemporary political landscape. Corruption and “Big Money” churn out dishonest politicians every election cycle. However, some applications of blockchains may help with the monumental task of making politicians more honest.

eBay currently manages the world’s largest reputation system (Source). Reputation systems are designed to create a metric of trustworthiness for individuals who transact or communicate with one another. eBay keeps a feedback score for all its members based on feedback generated by every other member that individual has transacted with (Source). However, eBay acts as the central authority, adjusting the feedback algorithm and holding each member’s score on its own databases (Source). Distributed reputation systems are similar to eBay’s except that they are stored on a public blockchain. There is no entity to adjust reputation weight, and more importantly, for politicians, there is no entity to blackmail or pay off. A distributed reputation system could permanently record a politician’s votes, bills, stances on issues, campaign promises, or leaked conversations in a trusted distributed ledger. “Elected representatives need to step up and show leadership in designing and implementing smart contracts. If you have integrity, why not encourage the creation of reputation systems?” (Source). Said differently, once a trusted distributed reputation system emerges, politicians who are not being monitored by such a system will immediately seem untrustworthy to the public. In a well managed and publicly transparent reputation system, inefficiencies would be apparent, corrupt politicians would be singled out and the result would be a drastically limited government becoming increasingly operated by smart contracts.

Blockchain & Free Markets

One of the first use cases of bitcoin was as a payment method on The Silk Road. The Silk Road was the name of one of the first and largest dark web markets (Source). It was a hidden black market on the internet where users bought and sold illicit goods of every imaginable kind using bitcoin for it’s anonymous and [at the time] untraceable qualities (Source). While the currency used for exchange on The Silk Road was blockchain backed, the website itself was hosted on a traditional centralized server and the distribution chain relied on discrete packaging sent via the United States Postal Service and other private shipping authorities (Source). The Silk Road was shut down by the FBI in October 2013 but hundreds of similarly structured dark web markets have come and gone since then (Source).

Today, the technology exists for a completely decentralized and unstoppable dark web market. Using Ethereum (decentralized blockchain cloud computing), BitChainDB (decentralized blockchain databases), and Interplanetary File System Protocol (decentralized blockchain file storage) dApps (distributed applications) can be created and released on to the thousands of globally distributed, individually owned and operated machines that make up this new-era blockchain-based computing network. A darknet market built on such a network would be nearly impossible to shut down. Pair such a site with anonymous cryptocurrency payments and a decentralized autonomous network of package delivery drones, as proposed by former Google employee Mike Hern, and you have the ingredients for an absolute free market operating outside of government regulation (Source). Anarcho-capitalists rejoice!

Blockchain & The Virtue of Production

Resonate is a music streaming co-op using a “Stream2Own” model (Source). Users of the service pay no flat monthly fee; rather micropayments are issued directly to the artist when a user listens to a particular song (Source). The first time a user listens to a song, she is charged $0.002 USD, the second time that song is played by the same user, a second payment is issued which is double the previous amount ($0.004) (Source). This pattern continues until a user has listened to a song for a total of nine times with total fees from the user amounting to $1.02 for that song (Source). After the 9th listen, the user “unlocks” the song and all future listens of the song are free (Source). The user can also choose to download any unlocked song (Source). Resonate uses the Ethereum network to issue instant micropayments to artists and bills the user for the amount spent each month in that user’s local currency (Source).

Resonate’s founder, Peter Harris, claims that his unique pricing model allows artists to be paid twice what they would be paid on traditional streaming services while keeping the average user monthly fee below the $9.99 typically charged by traditional music streaming services (Source). By permanently and publicly recording creative rights and rewards, blockchain technology has the potential to allow creatives to receive fair compensation for their work. The model described by Resonate rewards artists who produce songs worth listening to again and again.

Blockchain & Natural Harmony of Interests

The top internet companies today generate revenue from subscriptions (Netflix), intrusive advertisements (Facebook), commissions (Uber), and selling personal data (Google). The libertarian view of government intervention as the source of distress in a society can be seen equally with the internet corporations. The internet economy today is an extractive one; it takes in exchange for its services. To get around this, people pirate content, install ad blockers, and conduct business outside the platform to avoid fees. Additionally, media outlets generate clickbait articles or fake news to attract viewers and increase advertising revenue. The internet economy is lacking in natural harmony. A well-designed blockchain exhibits an extreme understanding of behavioral economics and aligns incentives. As we have seen with the bitcoin blockchain, all parties’ incentives are aligned perfectly so that any individual looking for personal gain is best off serving the network and making it stronger. A blockchain economy is a giving one; where users give their resources to the platform in exchange for services.

Flixxo is a decentralized video distribution platform (like Netflix or YouTube). Users need to acquire Flixx Tokens, Flixxo’s proprietary cryptocurrency, to view videos on the platform (Source). While a user can purchase Flixx Token’s at any time there are alternative ways to generate tokens (Source). Flixxo does not use centralized servers like Netflix, it relies on the free storage space on it user’s computers (Source). Users can opt-in and volunteer their personal computer’s storage in return for regular token payouts (Source). Flixxo also allows users to opt-in and view ads that reward the user directly with immediate token payouts (Source). In this way, a user can pay for the service if he chooses, or he can contribute towards making the Flixxo network stronger. Since Flixxo does not have to pay for server space, their operating costs are significantly reduced allowing them to better compete by charging less for their services.

Vitalik Buterin, founder of the Ethereum blockchain explains how the blockchain economy could unfold: “Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets taxi drivers work with the customer directly.”

Blockchains are poised to align incentives within societal and economic structures allowing for the libertarian ideal of “natural harmony” to emerge without an obvious middleman extracting profit from its users.

Blockchain & Peace

Any technology or ideology claiming to usher world peace should be seriously questioned. From the libertarian approach, it is a noble effort. However, blockchains are not a cure-all solution for the world’s ailments.

Tech

Blockchain and the Libertarian Uprising: The Authoritarian Razor

THE AUTHORITARIAN RAZOR

Libertarians hail the potential for blockchain to radically transform society according to their vision (Source). However, the open source nature of blockchain makes it equally accessible for governments and corporations to use it for tightening their authoritarian grip. The blockchain is a general purpose technology like TCP/IP (internet protocol), the general processing unit, and electricity.  Early adopters of the internet touted its potential to unite and democratize the world but did not anticipate mass government surveillance, fake news, or targeted advertising. Likewise, blockchain raving libertarians may be disappointed by the outcome of such technology in authoritarian hands.

Until now, the term “blockchain” has been used to refer to public blockchains like the bitcoin blockchain. Private blockchains are maintained and built by miners and nodes that are under private control. Governments and some startups have used private blockchains to maintain control over the infrastructure and network that builds their blockchain ledger. These blockchains can be distributed but are not decentralized.

China recently announced a successful trial run using its own government-backed cryptocurrency within its centralized banking system (Source). Japan, Korea, Sweden, Estonia, The UK, and The United States have all expressed similar interest in creating a blockchain based digital currency (Source). A government-backed cryptocurrency would allow governments to easily track all transactions and control nearly every aspect of the use of their digital coinage.

In 2014, China announced its plan to roll out a nationwide social credit system and enlist every Chinese citizen and business by 2020 (Source). In the United States, we are familiar with financial credit scores that are calculated based on an individual’s financial history and are used to determine an individual’s likelihood to repay a loan. Social credit scores are like reputation systems calculated based on the sum of an individual’s actions in a society and are used to gauge the trustworthiness of an individual (Source). In a social credit system, an individual’s score can determine who he marries, what job he is eligible for, how much he pays for insurance, and whether he can operate a business (Source). It seems Orwellian, especially when China plans to use the individual’s internet browsing habits as a criterion for calculating the score. The chief technology officer,  Li Yingyun,  of Sesame Credit, the Chinese corporation currently running trials of this future social credit system, said: “Someone who plays video games for 10 hours a day, for example, would be considered an idle person, and someone who frequently buys diapers would be considered as probably a parent, who on balance is more likely to have a sense of responsibility” (Source).

It is unclear if Sesame Credit plans to use blockchains for their final version of the social credit system. However, China’s interest in blockchain and their development of a government-backed cryptocurrency suggests that they are not shy to explore applications of this technology. As mentioned previously, smart contracts operating on a public blockchain can create a scalable reputation system. Using private blockchains, China can more securely manage their 1.3 billion citizens’ data and credit scores. Ultimately, this allows a centralized source of mass social control through behavioral incentives.

CONCLUSION

In 2013, Cyprus startled citizens when it announced that it would seize up to 60% of personal savings over €100,000 to bail out it’s dying banks (Source). Demand for bitcoin exploded as citizens reacted by moving their euros to crypto to keep it out of government hands (Source). Just a year later, China first declared its ban of all things bitcoin alongside its plan for a social credit system. Today, bitcoin looks more like an asset or a business-to-business payment network and less like a currency for the masses. Regardless of Satoshi Nakamoto’s original vision for bitcoin, his blockchain invention soon became recognized as an open platform allowing permissionless innovation. The technology shows promise for real societal change with applications in every industry. However, the course of change this technology brings will depend heavily on the motives of the people who build with it. It is up to the next generation of tech entrepreneurs to provide blockchain-based services unreliant on authority because the alternative is the authoritarian power that we have seen emerge from governments and Fortune 500s alike. Power that tends to corrupt; absolute power that corrupts absolutely. In reality, we will likely see a mix of both authoritarian and libertarian applications using blockchain. The authoritarians, however, will likely find it difficult, nigh impossible, to regulate their libertarian rivals operating with distributed and decentralized blockchains. Much in the same way that bitcoin is unstoppable by any third party. This leaves the market to decide which services will be deemed fit. Bitcoin and blockchain cannot be uninvented; the benefits are promising. We do not know what this new era of trustless global economies will bring, but we are about to find out.

Tech

Expand Server Storage with Reverse SSH and SSHFS

So you’ve got a Ubuntu based NAS (in my case a Raspberry Pi with 2TB external hard drive mounted) and a hoseted server? Wouldnt it be great if you could mount your NAS to your server? Here’s how to do it!

You won’t find many commands here. Every machine is different so its up to you to do the configuring. There are plenty of guides that can show you how to do each of the steps listed below. Good luck!

Setup Reverse SSH Between the Client and the Server

Use this guide as a start: How to Setup Reverse SSH Tunnel on Linux

Use autossh and SSH Keys

The latter half of this article will get you set up with autossh: Persistent reverse (NAT bypassing) SSH tunnel access with autossh

Now you’ll have a persistent and automatic reverse ssh tunnel to your server.

Install sshfs on the Server

sudo apt-get install sshfs

Mount the Client

sshfs -p <reverse tunnel port> <localUser>@localhost:/home/localUser RemoteFolder/

If this works, then go ahead and make an entry in your /etc/fstab file.