The secret of Bitcoin's success is to trade a lot of resource consumption and poor computing scalability for something more valuable - social scalability. Due to the tremendous progress of information technology in recent decades, it is no longer computers and networks that limit the number and types of participants in network organizations, but human thinking and system design that have not yet fully kept up with technological progress. Blockchain technology, through computer science to achieve data integrity, has made possible the currency (cryptocurrency) with the lowest trust cost so far, and it will inevitably bring progress to other financial fields and scenarios that are mainly based on online data transactions. (This is a dry article, we have translated a better version for you, Enjoy~

Original link:

Original link:http://unenumerated.blogspot.com/2017/02/money-blockchains-and-social-scalability.html 

introduce

introduce

The secret to Bitcoin’s success is by no means its computational efficiency or scalability in terms of resource consumption. Highly paid experts are hired to design bitcoin hardware specifically for mining, in fact, only to achieve a single function-repeatedly solve a specific, deliberately designed to be very difficult computational problem. This puzzle is known as a proof-of-work because the answer to this computational puzzle is simply a proof that the computer has indeed done a lot of computational work. Bitcoin puzzle-solving hardware like this can consume a total of more than 500 megawatts of electricity, and that's not the only feature of Bitcoin that can leave an engineer or industrialist speechless.

on the contrary,

on the contrary,The secret of Bitcoin's success is to trade a lot of resource consumption and poor computing scalability for something more valuable - social scalability.Social scalability refers to an ability in the system (a collaborative relationship or joint effort that people can participate in repeatedly, and is characterized by customs, rules or other ways to constrain or motivate the behavior of participants), to see how much the system can overcome The limitations of human thinking, and the insufficiency of the system in terms of incentives or constraints, which are reflected in the system's ability to limit who can participate or how many people can successfully participate.

Social scalability refers to the extent and manner in which actors are able to think about actions, respond to institutions, and deal with relationships with other actors as the diversity and number of organizational actors grow. This is primarily a discussion about human limitations, not technical limitations or physical resource limitations.

There are separate engineering disciplines, such as computer science, that evaluate the physical limitations of the technology itself, including the capacity of resources required to handle more users or achieve higher utilization rates with the technology. These engineering scalability considerations are not the subject of this paper, other than comparisons to social scalability.

Social expansibility refers to the behavior tendency caused by cognitive limitations and differences in thinking, not the physical resource constraints of machines. This is very important. In fact, it is more important to think and discuss the social expansibility that contributes to the development of the system. technology. The social scalability of an institutional technology depends on how the technology constrains or incentivizes participation in the institution, including protecting participants and the institution itself from undesirable participation or attack. One way to judge the social scalability of an institutional technology is to count the number of people who can benefit from participating in the institutional behavior.

Another way is to estimate the additional benefits and additional harms conferred or imposed on participants by institutions before the expected costs and other harms of participating institutions outweigh their benefits (due to cognitive or behavioral reasons). The cultural and jurisdictional diversity of those who can benefit from participating in institutional behavior also often matters, especially in a global Internet environment. The more an institution depends on local laws, customs, or language, the less socially scalable it will be.

Without past institutional and technological innovations, the number of humans participating in joint collaboration may often be limited to about 150, which is the famous "Danba number". In the Internet age, new innovations are constantly expanding our social capabilities. In this article, I discuss how blockchains, especially public blockchains implementing cryptocurrencies, can improve social scalability at a time when computational efficiency and computational scalability are extremely low.

Cognitive capacity (in terms of the relative size of the species' cerebral cortex) limits the size of primate groups. Maintaining a close group relationship in animals or humans requires a lot of emotional communication and relationship investment, such as dressing up before meeting people, gossiping, joking, storytelling and other traditional forms of conversation, singing and singing. In order to break the human cognition limit of who or how many people can form a system (the famous "Danba number" of about 150 people), institutional and technological innovations are needed [1].

Socially expanding innovations include institutional and technological improvements, transferring functions from thought to paper or thought to machines, reducing cognitive costs while increasing the information value of thinking flows, reducing security vulnerabilities, and finding and discovering new reciprocities participants.

Alfred North Whitehead[2] said: "There is a common misconception that is quite wrong, that is repeated in books, and is often mentioned in the speeches of famous people: we should cultivate the habit of thinking, Think more about what we're doing. Instead, civilizations evolve qualitatively out of quantitative changes in major activities that we can perform without thinking about them."

Hayek added: "We are constantly employing formulas, symbols, and rules that we do not really understand, and by the use of this knowledge we are aided by knowledge that we do not possess. To develop these practices and institutions on top of the customs and institutions that have been vindicated in their own field and which in turn form the basis of the civilization we have built."

Various innovations reduce our worries about participants, intermediaries, and outsiders, and thus reduce the need for us to pay attention to them. We do not need to worry about more and more people with our limited cognitive ability. , more and more diverse human behavior.

Another class of innovations can facilitate the accurate collection and transfer of valuable information among a growing number and diversity of actors. There are other innovations that also enable more mutually beneficial participants to discover each other.

All of these innovations have increased social scalability in prehistory and throughout human history, and the effect has been so strong that our modern civilization with a large population is possible. Modern information technology (IT), particularly the findings of modern computer science, can often uncover more reciprocal matches, can improve incentives for information quality, and can reduce the need for trust in certain types of institutional transactions, both in terms of volume and variety For a growing number of people, these techniques and discoveries further improve social scalability in very important ways.

Information flowing between minds (what I call intersubjective agreement[3]) includes oral and written texts, customs (traditions), legal content (rules, customs, and precedents), other factors (e.g. The "star" ranking that is very common in China), as well as the market price and so on.

Minimizing the cost of trust reduces the vulnerability of participants to each other, to outsiders and intermediaries to act harmfully. Most institutions that have undergone lengthy cultural evolution, such as law (reducing vulnerability to violence, theft, and fraud) and security technologies, in general, have reduced trust in multiple ways compared to their vulnerability prior to these organizational and technological evolutions vulnerability. So we need to trust our fellow human beings in comparison to our vulnerability prior to these institutional and technological developments.

In most cases, an institution that can be trusted and is trustworthy enough (such as a market) depends on the trust (often implicitly) of its participants in another institution that is trustworthy enough (such as contract law). These trusted institutions would in turn enforce traditional accounting, legal, security or other controls to make them more fully trustworthy in real time, at least by minimizing the and investigators) to facilitate the functionality of client institutions. Innovation can only partially eliminate certain vulnerabilities, i.e. reduce the need for or risk of trust in others. Of course, there is no system or technology in the world that is completely trustless.

Even if we have the strongest security technology - encryption technology, there is no such thing as a completely trustless system. While some cryptographic protocols do guarantee certain data relationships with high probability against adversaries with extremely high computing power, cryptographic protocols cannot provide absolute guarantees when considering all possible actions of all participants. For example, although encryption technology can strongly protect e-mails from direct theft by third parties, the sender still needs to trust the recipient that he will not directly or indirectly forward the content of the e-mail, or disclose it to Any third parties who should not know.

As another example, in our strongest consensus protocol, some less than 100% hazard (measured by computing power, interest, or personalization and counting) actions by participants or intermediaries can disrupt transactions between participants or Integrity of information flow, thereby compromising participants in general. The breakthroughs made in modern computer science can indeed reduce vulnerabilities, and the effect is often significant, but these technological advances are far from eliminating all potential vulnerabilities.

Matchmaking can facilitate mutual discovery among mutually beneficial participants. This may be a kind of social expansion that the Internet is best at. Social networks like Usenet News, Facebook, and Twitter help people discover like-minded partners, entertain each other, or stay in touch (and maybe even find a future spouse!). After the social network provides people with the possibility to discover each other faster, it can then promote investment in interpersonal relationships at different levels. The frequency of human visits to social networks will change from casual viewing at the beginning to frequent visits, and finally obsessed with them. Christopher Allen et al. [4] present an interesting and detailed analysis of the size and timing of interactive groups in online games and related social networks.

eBay, Uber, AirBnB, and online financial exchanges brought about social scaling through the proliferation of deal-making: searching, finding, aggregating, and facilitating the negotiation of mutually beneficial commercial or retail transactions. These related services also help facilitate businesses such as payment and shipping, as well as verification of whether other obligations undertaken by strangers in these transactions have been fulfilled and adequate communication about the quality of completion of this transaction (such as "star rating" system, Yelp reviews, etc.).

Currency and Markets

Money and markets directly benefit the participants in each particular transaction by matching mutually beneficial buyers and sellers and using a generally accepted standardized countermeasure (ie money). The market here refers to the concept used by Adam Smith: not as a specific place or service where buyers and sellers come together (although these may sometimes be involved), but rather as an exchange of pairs in the supply chain of manufactured products. coordinated activities.

Money and markets also incentivize the generation of more accurate price signals, thereby reducing the negotiating costs and errors required by participants in other forms of exchange. Arguably, the efficient combination of money and markets allows a far greater number and variety of participants to efficiently coordinate their economic activities, unlike previous reliance on exchange mechanisms that resemble bilateral monopolies more than competitive markets.

Features of markets and currencies include deal-making (bringing buyers and sellers together), reduced trust costs (trusting self-interested motives rather than relying on altruistic motives of strangers), execution processes that scale with the number of widely accepted and reusable medium of payment) and quality information flow (market prices).

Discussion The earliest thinker about money and markets was Adam Smith.At the beginning of the British Industrial Revolution, Adam Smith pointed out in "The Wealth of Nations" that even the simplest products depend directly or indirectly on the labor of a large number of people:

Look at the articles of daily use of the most common artisan or day laborer in a civilized and prosperous country, and you will find that the industries (though only a small part) connected with the production of articles of manufacture employ and engage in innumerable numbers of persons. For example, the extremely rough-looking wool coats worn by day shift workers were the result of the collective labor of a large number of workers.

Shepherds, pickers, combers, dyers, carders, spinners, weavers, bleachers, seamstresses, and many others, required a combination of their different crafts to complete this very common household product . Besides, how many merchants and carriers must be hired to transport raw materials to and from these workers who live far apart! What is more, how many commerce and shipping, how many boatmen, sailors, sailmakers, ropemakers, were needed to transport to one place the different dyes required by the dyers, often from all over the world! How much labor is required to produce the most common implements of these workmen!

Leaving aside such complex instruments as the sailor's boat, the bleacher's waterwheel, and the weaver's loom, how much complexity do we need for such a very simple instrument as the shepherd's shears for shearing wool? Such scissors can only be made with a lot of labor: the crafts of different roles such as miners, furnace builders, woodcutters, charcoal burners, brickmakers, bricklayers, furnace workers, technicians, blacksmiths, etc. must be combined to produce them.

In the same way, if we consider the clothing and household implements of a laborer, the linen shirt he wears next to his body, the shoes on his feet, the bed on which he sleeps and all the bedding on the bed, the stove for cooking, which are dug out of the ground And it may have been transported by land and water to bring to him the coals for his cooking, all the other utensils in the kitchen, all the utensils on the table, knives and forks, earthen and pewter utensils for serving and serving food, The workers who make bread and wine, the glass windows that dissipate heat, transmit light, and keep out the wind and rain, and those inventions that make the North a very comfortable place to live, all the knowledge and technology necessary for these inventions, and the workers. The various tools used to make these inventions, etc.

In a word, if we consider all these things seriously, and consider the various kinds of labor invested in each of them, we shall find that the most common man in a civilized It is almost impossible to obtain the supply of daily necessities for the most simple way of life imaginable without the cooperation of thousands of people.

This all preceded the series of industrial revolutions and waves of globalization that occurred after 1776, and today the division of labor has been redefined, complicated and expanded many times over. Rather than trusting that strangers will act altruistically, it is better to believe that markets and currencies can incentivize this large network of people who don't care about each other to act in our favor by creating many, many mutually beneficial cooperations:

In a civilized society, human beings need the cooperation and help of a large number of their own kind at any time, but their lifetime is so short that they can only establish friendship with a few people...Compared with other animals, human beings often encounter situations in which they need help from their fellow human beings, but only Expecting favor from others is not okay. The act of exchanging allows us to obtain much better desired goods from other people. The food we need is not from the favor of the butcher, brewer, or baker, but from their own interests.

Smith goes on to describe the extent to which the division of labor, and thus the productivity of labor, depends on a network of paired exchanges: "Just as exchange causes the division of labor, the degree of division of labor is necessarily limited by the capacity of exchange, in other words, by the constraints.” As a national and global exchange network grows, more and more producers are involved, increasing the division of labor and labor productivity.

Currency facilitates social scalability by increasing the opportunities for such exchange. As a widely accepted and reusable wealth storage and transfer medium, currency reduces transaction costs by reducing coupling problems in transactions (dual demand coupling between buyers and sellers in barter exchange, and demand-supply coupling in unilateral transfers), making exchange There are more and more types of goods and services, and the participants involved are also more and more diverse.

A variety of media, including spoken language, clay[5], paper, telegraph, radio, and computer networks, have been used to communicate offers, promises, actual transactions and prices, as well as monitoring of execution and other business communications content. One of the most insightful views on the price networks formed by markets and money comes in Friedrich Hayek's article "The Use of Knowledge in Society" [6]:

In a system in which knowledge of relevant facts is distributed among many people, the price mechanism coordinates the independent actions of different individuals... In any cooperative society of many people, such planning, no matter who makes it, starts with knowledge as the This kind of knowledge is not given to planners first but to other people, who then pass it on to planners in some way.

The manner in which people communicate to all parties the knowledge on which their plans are based is a crucial question for any theory of economic processes, and the question of what is the best use of knowledge initially dispersed among all men, At least one of the main problems of economic policy, or designing an efficient economic system...

The fact that there is only one price for any good (or rather, that prices are correlated everywhere, differing depending on shipping costs, etc.), makes it possible (only conceptually possible) for a planner with all the information Answers are also available, but in reality the information is scattered among all those involved in the process...

Miraculously, in situations such as a shortage of an ingredient, thousands of people (whose identities could not be ascertained after months of investigation) spontaneously Start saving materials or find other alternatives; that is, people will make the right choice...

secondary title

Long ago we were still in the age of pottery, then we moved into the age of paper, and today we carry out most of our business transactions through programs and protocols running on computers and data networks. While this greatly improves deal-making and information flow, it comes at the cost of more harmful behavior.

As the network grows, more people join in who don't know each other's habits and constraints. Security controls based on trust in the root are only suitable for small offices like Bell Labs, where colleagues know each other well and where income and expenses are generated through paper processes rather than electronic programs executed on office computers Full control. Such security mechanisms become less efficient and less secure as organizations become larger, organizational boundaries become more intricate, and more valuable and concentrated resources (such as currency) are entrusted to computers for management.

The more emails you receive from strangers, the more likely you are to receive phishing attacks or malicious attachments. Traditional computer security systems do not scale well to society. As I describe in The Dawn of Trusted Computing [7]:

When we use our smartphones or laptops over a cellular network or the Internet, the other end of the interaction often runs on other standalone computers, such as web servers. Virtually all of these machines have architectures designed to be controlled by a single person or people in a hierarchical organization of mutual knowledge and trust. From the perspective of a remote network or application user, these architectures are based on complete trust in an unknown "root" administrator who can control everything that happens on the server:

They can read, change, delete or block any data on that computer at will. Even data sent encrypted over a network will eventually be decrypted and fully grasped by a controlled computer. By connecting to a network service that we now fully trust (in fact we are passive and vulnerable to such a network), the computer (or someone who controls the computer) will unconditionally execute the administrator (could be an internal employee or a hacker) ) of any order and payment etc. If someone on the other end tries to filter or tamper with your network commands, there's no good security in place to stop them, just unreliable and expensive artificial systems that often don't go beyond national borders.

Blockchain and Cryptocurrencies

Blockchain and Cryptocurrencies

Scalable markets and prices require scalable currencies. Scalable money requires scalable security so that more and more diverse people can use the currency, and at the same time the currency cannot expire - cannot be counterfeited, cannot be inflated, and cannot be stolen.

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Financial control on “computational doping”: Blockchains are like armies of robots checking each other’s work.

When we can secure the most important functions of the financial network through computer science instead of traditional accountants, regulators, investigators, police and lawyers, we will move towards an automated, global and safer system instead of human flesh , localized and inconsistent security systems. Cryptocurrencies, if properly implemented on a public blockchain, could replace large numbers of traditional banking bureaucrats with large numbers of computers.

“These computers maintaining the blockchain will allow us to put the most critical parts of our interconnection protocols on a more reliable and secure basis, and enable trusted interactions that we previously dared not conduct on a global network.”[8] ]

The most valuable features of blockchain technology, especially Bitcoin, such as:

The blockchain can maintain a high level of security and reliability without human intervention. Without high security, the blockchain will be just a distributed database technology with extremely low resource utilization, and local systems are still required to ensure normal operation.

Computers have become orders of magnitude more efficient since the mid-20th century, but the human brain hasn't changed much. The new computing power has created many possibilities for breaking through the limits of human beings, and as human thinking has been brought to the extreme, the systems designed based on the human mind have also been brought to the extreme. As a result, humanity has no remaining capacity to improve our existing institutions.

But if we use computers to directly replace some of the places where humans now play a role, there is still a lot of room for improvement in social scalability. (Important note: This conclusion depends on the slope of the slanted line in the graph above, not the absolute position of the human ability line. The position of the ability line shown above is arbitrary and depends on our estimation of human ability).

If a new centralized financial entity, a third party that needs to be trusted, does not have a system equivalent to an "artificial blockchain" like traditional financial institutions, there will be a great risk of becoming the next Mt. Gox. It cannot be a trustworthy financial intermediary without bureaucracy.

Computers and Internet are cheap. The additional resources needed to scale computing power are also cheap. Expanding the collaboration of traditional human institutions in a reliable and safe manner will require more and more accountants, lawyers, regulators, and police officers, and with it, more bureaucracy, risk, and pressure on these institutions. Lawyer fees are high, and supervision is even more specious. And computer science can do a much better job of keeping money safe than accountants, police officers, and lawyers.

In computer science, there is a fundamental trade-off between security and performance. Bitcoin's fully automated reliability stems from the high cost of its operation and resource usage. No one has found any way to substantially improve the computational scalability of the Bitcoin blockchain, such as its transaction throughput, without guaranteeing that this improvement will not affect Bitcoin's security.

For Bitcoin, it is likely that there is no way to substantially increase performance while maintaining reliability, which is perhaps an unavoidable trade-off. Compared with existing financial information technology, Satoshi Nakamoto made some important trade-offs that are good for security but bad for performance. The seemingly wasteful mining process is the most obvious of these tradeoffs, but it's not the only one Bitcoin makes.

Another tradeoff is its high redundancy in message passing. Mathematically provable reliability requires full broadcasting of messages across all nodes. Bitcoin cannot achieve this, but even achieving an approximate effect requires a high level of redundancy. Therefore, a 1 MB block consumes far more resources than a 1 MB web page, because its transmission, processing, and storage require higher redundancy for Bitcoin's automatic reliability.

These necessary trade-offs, sacrificing performance to achieve the security necessary to support independent operation, uninterrupted globalization, and automated reliability, mean that it is impossible for the Bitcoin blockchain to approach Visa's transactions per second while maintaining Automatic reliability, and the latter brings it a unique advantage over traditional financial systems.

On the contrary, we need a peripheral payment network (such as Lightning[9]) with a relatively low degree of trust minimization to undertake a large number of low-value transactions with Bitcoin as the face value unit, so that the Bitcoin blockchain only needs to regularly update Batches of high-value peripheral network transactions are settled.

While Bitcoin supports lower transaction throughput than either Visa or PayPal, its stronger automated security is more important than transaction throughput. Anyone with internet access and a smartphone can pay a transaction fee of $0.20-$2 (which is much lower than current exchange rate fees) and use Bitcoin services anywhere in the world. And low-fee low-value transactions can be processed on the Bitcoin peripheral network.

When it comes to bitcoin with a lowercase b, that is, as a currency, you can use bitcoin to pay for goods like legal tender, such as using bitcoin-denominated credit and debit cards, enjoying and bank credit cards or Second-level transactions and refund request[10] functions like debit cards.

And there are also clever ways to implement bitcoin retail payments on the perimeter network, where micropayments happen off-chain and only need to be settled in batches on the bitcoin blockchain at regular intervals. As Bitcoin usage grows, the blockchain will gradually evolve into a high-value settlement layer, and we will see peripheral networks being used to enable retail transactions.

When I designed Bitgold, I realized that the consensus cannot be extended to high-throughput scenarios while ensuring security, so I designed it into a two-tier architecture: (1) Bitgold itself, the settlement layer; (2) ) Chaumian digital cash, a retail-level payment peripheral network with high throughput and privacy (via Chaumian blind signature), but this peripheral network is a trusted third party like VISA, so it needs to be composed of accountants and other roles" Artificial blockchain" to ensure reliability.

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Currency requires social scalability on the basis of guaranteeing security. For example, the currency must be difficult for any user or middleman to counterfeit (so that the supply curve is diluted leading to excessive or unintended inflation). Gold has value anywhere in the world and is immune to hyperinflation because its value does not depend on any one central authority. Bitcoin also excels in these areas and works on a network that allows someone in Albania to pay someone in Zimbabwe without having to trust a third party and thus pay semi-monopoly pricing fees bitcoin.

There are various definitions of "blockchain" these days, but almost all of them are for marketing hype purposes. I propose to give "blockchain" a clear definition that conveys its connotations to the layman. A blockchain should have both blocks and chains. Chains should be Merkle trees or other cryptographic structures with unforgeable integrity. Furthermore, transactions and other data protected by the blockchain should be replicated in a reasonable manner, with the highest possible tolerance to worst-case malicious problems and actors (a typical system should be able to Even when 1/2 of the servers are maliciously destroyed, they can still function normally).

Bitcoin's socially scalable security is based on computer science, not police and lawyers, so it allows payments across borders, such as a customer in Africa paying a supplier in China. This feat is difficult for a private blockchain because it requires authentication, digital certificates, and public key infrastructure services that can be shared across these different jurisdictions.

Because of this feature, and (hopefully seldom) because of the possible need for software updates that would invalidate historical blocks (a dangerous situation called a hard fork), blockchains still need an artificial governance layer with the potential for political fragmentation . The most successful blockchain, Bitcoin, has been maintained immutable through decentralized decision-making by technologists with a strong belief in the immutability of data, in which case only the most Important and rare bug fixes and design improvements, hard forks are available.

Under this governance philosophy, accounting or legal decisions (such as changing account balances or reversing transactions) would not be grounds for a hard fork, they should be done by traditional governance mechanisms outside (or above) the system (e.g. through Court injunctions force Bitcoin users to send a new transaction, effectively reversing the old transaction, or confiscate specific keys and thus confiscate specific permissions from specific users).

Data is unforgeable and immutable, meaning that any tampering with it after it has been submitted to the blockchain is guaranteed to be discovered. Contrary to what some hype says, we have no way to guarantee whether the source of the data before it is uploaded to the chain is authentic, or whether the data itself is true or false. This requires additional approaches, often including costly traditional systems.

Blockchains don’t guarantee the truth; they just preserve both the truth and the lie in an immutable way, allowing later people to analyze the content objectively and thus have more confidence in uncovering the lie. The daily computer is a computing power drawing board; while the blockchain is computing power amber. Important data should be encapsulated into the blockchain amber as early as possible, preferably directly provided by the device that generates the data after signature encryption, so as to maximize the advantages of the blockchain in ensuring data reliability.

A Merkle tree of four transactions (tx 0 to tx 3). Combined with proper replication and proof-of-work-protected transaction blocks forming a linked list structure, Merkle trees can make data such as transactions unforgeable through consensus. In Bitcoin, these data are safely aggregated into the root hash of the Merkle tree, which is used to verify that all transactions in the block have not been tampered with.

The "secure property rights" architecture I proposed in 1998 used Merkle trees and data replication mechanisms to tolerate arbitrary software errors or malicious behavior, but had no concept of blocks. It demonstrates my theory that you can protect the integrity of globally shared data and transactions and use them to design a cryptocurrency (Bitgold). But Bitgold is not as efficient as Bitcoin, nor does it have the computationally scalable block and ledger system like Bitcoin. And it, like today's private blockchains, was designed with securely distinguishable and countable nodes.

Due to the fact that a 51% attack can affect the important security goals of some public chains (such as Bitcoin, Ethereum), we are very concerned about the identity of the miners with the most computing power, and want to answer this question: can someone convince and Coordinated 51% attack?

Blockchain security has its objective limits, and blockchain governance can be seriously affected by 51% attacks. An attack would certainly not be called an "attack" by the attackers, instead they might call it "enlightened governance", or "democratic action". Some software updates to fix bugs or improve the protocol require soft forks. Other software updates will require hard forks, which pose greater security and ongoing operational risks to Bitcoin than soft forks.

Compared with other network protocols, although the blockchain has greatly reduced the trust requirements, it is still far from being fully trusted. Miners are partially trusted guardians. In fact, there are still some people who are not engineering experts or computer scientists but spend a lot of time learning blockchain design principles and codes. They must have full trust in the development expert community, just like a A layperson who wants to understand the results of research in a specialized discipline needs to do the same as a scientist in that specialized field. Exchanges are also very influential during a hard fork, as they can decide which fork their markets and tickers support.

Public blockchains can thus relatively (but not absolutely) sidestep identity conundrums, and by identifying the miners with the most computing power at a higher physical or social level, it may be easier than trying to make identity such a (brain-based) natural It is more appropriate to map vague concepts to the protocol layer. PKI (Public Key Infrastructure)'s difficult attempt in this regard is an example.

So I think there are some "private blockchains" that qualify as true blockchains; others should be grouped under broader categories like "distributed ledgers" or "shared databases". Their social scalability is completely different from public and permissionless blockchains (Bitcoin and Ethereum).

The following schemes all have the requirement of securely identifying (differentiable and computable) server identities, rather than allowing anonymous identities like public blockchains. In other words, they need some other, often far less socially scalable solution to the Sybil problem:

A mainstream but usually not particularly socially scalable way of identifying server identities is the PKI scheme based on trusted certificate authorities (CAs). To avoid trusted third parties becoming security holes, reliable CAs themselves must be high-entry, labor-intensive bureaucracies that often conduct extensive background checks themselves or by others (such as business research firm Dun & Bradstreet ). (I once led the team to design and build such a CA). CAs also act as gatekeepers, protecting these permissioned systems. CAs can be single points of failure by business struggles. "Public blockchains are automated, secure, and global, but identity verification is labor-intensive, insecure, and local."

Private chains using PKI are a good option for banks and large corporations, as they already have mature internal PKI systems that authenticate employees, partners, and private servers needed for important transaction approvals. Bank PKI is relatively reliable. We also have semi-reliable CAs for web servers, but this generally excludes web clients, even though people have been trying to solve the client certificate problem since the invention of the web: for example, advertisers would want more secure An alternative to phone numbers and cookies to track customer identities. But that hasn't happened yet.

PKI works well for a small number of important things and people, but for not so important entities, it's not as good or easy to use. Its social scalability is limited by the traditional identity bureaucracy it relies on.

Pictured above are some notable thefts in the broader Bitcoin ecosystem. Given that the Bitcoin blockchain is probably the most secure financial network in existence (in fact, Bitcoin must be far more secure than traditional payment networks in order to maintain its low governance costs and ability to transfer money across borders without interruption), building around it Peripheral services based on old centralized web servers are not secure. (Source: Author)

We need more socially scalable methods to reliably count the number of nodes, in other words, more robust methods to resist corruption as much as possible and evaluate the contribution of nodes to the integrity of the blockchain. This is the crux of proof-of-work and broadcast replication: greatly sacrificing computational scalability for social scalability.

in conclusion

With the rise of the Internet, various online organizations have sprung up, including social networks, long-tail retailers (such as Amazon), and various service providers that allow small and dispersed buyers and sellers to do business with each other (eBay, Uber, AirBnB, etc.) These are just the very beginnings of our new capabilities. Due to the tremendous progress of information technology in recent decades, it is no longer computers and networks that limit the number and types of participants in network organizations, but human thinking and system design that have not yet fully kept up with technological progress.

These classical Internet efforts are very centralized. Blockchain technology, data integrity through computer science rather than "calling the police", makes possible the currency (cryptocurrency) with the lowest trust cost so far Scenarios lead to progress.

This does not mean that adapting our institutions to our new capabilities will be easy, or in some particular cases less difficult. Utopian ideas are very common in the blockchain community, but they are not viable options. Reverse engineering our highly developed traditional institutions, or even reshaping some old institutions in new forms, is often far better than designing them from scratch, throwing out grand schemes and game theory.

Satoshi showed us such a key strategy - sacrificing computing efficiency and scalability (consuming relatively cheap computing resources) to reduce the social institutions (such as markets, large companies, and governments) needed to achieve collaboration among strangers. ), and make better use of this precious resource.

[1]http://whatsupnah.com/2009/02/twitter-vs-the-dunbar-number-and-the-rise-of-weak-ties/

[2]https://en.wikipedia.org/wiki/Alfred_North_Whitehead

[3]http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh.net/tradition.html

[4]http://www.lifewithalacrity.com/previous/2005/10/dunbar_group_co.html

[5]https://nakamotoinstitute.org/the-playdough-protocols/

[6]https://www.econlib.org/library/Essays/hykKnw.html?chapter_num=1#book-reader

[7]https://unenumerated.blogspot.com/2014/12/the-dawn-of-trustworthy-computing.html

[8]https://unenumerated.blogspot.com/2014/12/the-dawn-of-trustworthy-computing.html

[9]https://lightning.network/lightning-network-paper.pdf

[10]https://en.wikipedia.org/wiki/Chargeback