Author: Bryan Bishop 2015-12-10 04:31:42
Published on: 2015-12-10T04:31:42+00:00
In this email conversation, Akiva Lichtner questions the feasibility of the original idea of a virtual currency that would allow everyone to be equal and run the client on their mobile device. He believes that this idea died with the introduction of special mining hardware. However, Bryan explains that mining equipment is used for Proof-of-Work and not transaction verification. If an organization had to accept bitcoin payments, they would need a small server farm for transaction verification, but Bitcoin does not work like centralized systems. It is focused on decentralized and independent verification. Instead of assuming that Bitcoin can only look like Visa, we need to explore proposals that preserve existing properties of Bitcoin while increasing the amount of activity that can enjoy the decentralized fruits of Proof-of-Work labor.Akiva suggests delegating verification to a trusted party as long as the trust chain stops there and there is plenty of choice. Bryan proposes using probabilistically checkable proofs which verify in milliseconds, grow sublinear in size of the total data, but have no near-term proposal available yet. Akiva agrees that the failure to scale has already occurred and a pragmatic approach is needed, even if it upsets the trustless virtual currency police. Most people trust at least one other person, so it's not weird. Bryan shares recent text that explains how Bitcoin seeks to address the root problem with conventional currency: all the trust that's required to make it work. Trust makes systems brittle, opaque, and costly to operate. Through the use of cryptographic proof and decentralized networks, Bitcoin minimizes and replaces these trust costs. With the available technology, there are fundamental trade-offs between scale and decentralization. If the system is too costly, people will be forced to trust third parties rather than independently enforcing the system's rules. If the Bitcoin blockchain’s resource usage, relative to the available technology, is too great, Bitcoin loses its competitive advantages compared to legacy systems because validation will be too costly, forcing trust back into the system. If capacity is too low and our methods of transacting too inefficient, access to the chain for dispute resolution will be too costly, again pushing trust back into the system.
Updated on: 2023-06-11T01:55:53.489864+00:00