Collective innovation & perpetual redesign
Habits Of Collection
Collecting things is something I genuinely enjoy doing. I have done it for as long as I can remember. From shiny rocks to posters, cards to skateboards. Like any person, my lust for objects has different meanings. Depending on the purpose, I may be more or less interested in the object as a whole, perhaps more interested in it as a piece. For example, ancient relics or antiquities, especially shards. I find fragments the most valuable and exciting for some odd reason. My fascination with bits of history is immense. I’d purchase an old abandoned brick building to say I own a piece of history. Especially if the old building showed character.
Curiosity is a significant factor in the draw that most antiques have over me. Although after the first bit of interest, something more always seems to be drawing me closer. I believe that it’s a hardwired instinct, ingrained by evolution and millennia of early adaptation and survival. Collecting is the notion of needing to acquire value or objects of worth in grandiose amounts, allowing comfortably, adorning a status, providing a way to fit in, driving the feeling of getting ahead of my fellow man in the competition of life.
As a child, I accumulated rocks and simple objects that had worth in my own eyes, and objects reflected my beliefs. As an adult, I still collect objects of worth — I collect objects seen as valuable in the eyes of others so I can sell or trade my item, the same as everyone else. At one point, all of humanity had just a few objects to decide on. Now, there are many opportunities to trade things with liquidity. Gold & gems have been standard items of value for the most extended amount of time.
We have grown to regard paper money as a valuable replacement for gold. Large companies are like a metaphor for gems: small fractions or whole chunks of companies bought through the stock market. We have always traded items between each other. Beliefs for beliefs, one man’s trash is another man’s treasure.
King Of Current Beliefs
Currency the king of all value, the ultimate evolution of the belief of the value system. Regulation of objects we regard as valuable made through currency based systems. The usefulness of money and the strength of its origins dictate how transferable the value can be from currency to object or object back to currency. Currency can carry a vast amount of power or very little. People create the potential of money by backing it with their holdings. The strength of a country and the legitimacy of minting practices dictate a currency’s reliability.
All currencies of equal issuance must have fundamental distribution and high calibre of usability. Ease of use and fair distribution is critical for currencies to be available to the masses. In turn, access and usability generate key-value circumstances, as more and more people use it during their day to day activities. In part, this creates worth to the item in question, money. What we are talking about in short is supply & demand. Supply meets the need and vice versa. High demand equals higher values; lower orders equal lower values.
Supply is just a reaction to human demand; no more, no less. If the need for an item were to cease to exist entirely, then, as a result, the supply would be either infinite or null. Amounts are available for whatever eventually demands it. Human demand brings a measure of value, and the condition of supply is ultimately endless unless otherwise measured or estimated to be less.
In nature, we know nothing that has a definitive supply end. We may be able to make calculations of near certainty or almost full understanding of available resources, items, objects etc.
Otherwise, we assume under almost all predictable conditions the supply of a resource, item or object.
When supply is finite over demand, innovations in the supply chain occur, whether artificially or naturally.
What Does Any Of This Have To Do With Cryptocurrency?
Bitcoin is the first item of value in human history that has a tamper-proof physical limit. It fits the same category of demand as other currencies. However, it is digital. Cryptocurrency is distributable around the globe in a matter of minutes, carrying almost no fees. The foremost difference between cryptocurrency and conventional fiat currency (currency backed & regulated by a government) is more than the prominent ‘crypto’ at the beginning of the word currency.
The easiest way to explain the cryptocurrency is to look at the word from a different approach. Instead of cryptocurrency, which sounds ominous and dark, instead, think ‘secure-cash,’ cash is the obvious replacement for the word currency. Imagine cryptocurrency as ‘secure-cash’ to add relief to the complex subject. Secure-cash is a more fitting term, and it’s way more understandable. Secure is chosen because the word crypto in cryptocurrency is rooted in the word cryptography, in both conditions and technology.
Breaking down concepts into sections makes it easier to understand more complex topics. For example, take significant words and break them down into simpler terms. De-constructing words provide a much easier understanding. Extended English words almost always have one or more origin words known as roots. Thinking about more complex words in parts builds understanding. Simplifying complex words with origin words generates an overall understanding of formality and approach.
Our Widest Web
Cryptography is a critical component in the foundation for protection over the entire internet. In today’s age, where technology is increasing rapidly, regarded as the Information age. On a podcast episode of ‘The Tim Ferris Show’ featuring Nick Szabo & Naval Ravikant, they mention that we are in ‘The Dawn of trustworthy internet.’ If that doesn’t excite you, it should. Because the internet has never been very trustworthy. In fact, until now, the early ages of the internet have been somewhat of a battleground. Strewn with different weapons and increasing attack-types. We store a ton of private information on the internet. Web capabilities have skyrocketed; however, our overall understanding of its structure and practicality is questionable.
The worldwide web is a most fitting name for the invisible structure that is the internet. It is expanding intricately at incomprehensible speeds to all corners of the globe. Faster web growth means more lasting advances and the more accelerated the innovations for web use become. Attack risk also increases in magnitude and nature with the size of the internet.
The Frame That Holds
The Camels Back
Cryptography was developed to protect us on the web by securing identities or data with phrases/passcodes that are illegible. It is used to transfer private records in various ways. Almost all of which rooted deep in code programmed in computers. Away from prying eyes and computed faster than human fingers and eyes can ever move.
Cryptography is an essential component in the framework of cryptocurrency. Accompanied by asymmetric cryptographic signatures, meaning there are two sets of keys. Many institutions varying from banks to intelligence contractors, use cryptographic signatures. A cryptographic signature is like a unique digital stamp. Digital stamps ensure that whoever receives what you send can completely trust that it originated from you.
Cryptographic hash functions are also an essential tool in cryptography. Computers calculate large amounts of data and information remarkably quick, created that way by intentional design. We are making modern computers vastly more efficient at deciphering encrypted codes, compared to humans. A cryptographic hash function is a mathematical algorithm that produces a one-way function, typically a phrase that is nearly impossible to reconstruct(encryption). Hash functions are any functions used to map data. Cryptographic hash functions are set to protect the data with encryption, so the phrase looks useless to us but corresponds with data structures within computer software.
In other words, vulnerable data — otherwise easily viewed or decoded — is hidden with Cryptography. Without these functions, computers could be set up to process information that could be used to steal data and passcodes to gain entry to bank accounts or private institutions like hospitals.
Age Of Digitization
Combinations of cryptography and a blockchain or DDL (Distributed Digital Ledger) created what we know now as Bitcoin or the first peer to peer electronic cash system. A blockchain is massively distributed accounting. I’ll expand more on that later. Many cryptocurrencies have appeared, invented after the creation of Bitcoin. There are now more than a few thousand different cryptocurrencies. Just the same as money is available in every country, in multiple denominations, people have created different uses for cryptos.
Algorithms are apart of every cryptocurrency — an identical algorithm to Bitcoin or a completely different algorithm. The algorithm is what controls the crypto itself. Without a consensus algorithm, Bitcoin and any other cryptocurrency would be the same as fiat currencies backed by governments. Cryptos are the same as or better than any other form of cash or item for trade if they fill a few parameters first, open-source, decentralized, self-regulating. Bitcoin and other cryptos are unique for their decentralized nature. Typically currency is regulated by a Federal Reserve and printed accordingly. In other words, the Federal Reserve says what goes with printed money.
Good ol’ quantitative easing anybody?
The bitcoin network operates on its own. Peer to peer transactions makes it all possible. Other cryptos designed with the same principles as bitcoin create a barter system. It’s not apples to oranges, its straight forward apples for apples. Bitcoin’s design is the same as that of a chauffeur; there is one job to do, drive the car when asked. The open-source nature of the project enables flexible contributions and innovations. It also means no-one can tamper with the code without someone knowing.
Meet B.ob T.rent C.harlie
There as an age-old adage using Alice & Bob as a metaphor for explaining exchange. There also exists a trusted third party, symbolized as Trent. Up until now, trusted third parties were loopholes. Because there has not been a system before this that allowed trust in the way Bitcoin does. Trust relies on the ability to prove dishonesty or honesty. If either can be determined, then the latter is the condition.
Let’s establish this;
We are all Alice, gazing into the wonderland.
Anyone you have never met could be Charlie.
Every Alice could be a Charlie and vice versa.
- Bob’s– Bitcoin I.D.– a unique code only for the Bitcoin network.
- Trent’s– Bitcoins algorithm– a formal layer of trust.
- Charlie’s– Bitcoin network peer– a trusted computer.
Alice wants to publish a large book, the publisher goes by Charlie.
Alice does not want anyone to know the contours of the story out of context. Alice is not trustful of Eve–her editor. Alice believes Eve exposes her work before Alice is ready. Afraid of her work not being verified, she creates a pseudonym, Bob, for protection. Eve is distrustful of Bob because they have never met.
Alice is comfortable sending messages to Trent because –unlike Eve, Bob trusts that Trent has no ulterior motives. Trent never goes on vacation, never goes to sleep and never has to eat. Trent’s only purpose for existing is to ensure Alice’s messages make it to Charlie, but look like they came from Bob. Giving Charlie the ability to continually translate information from Alice — avoiding anyone with bad intentions like Eve, who believes Bob’s words are irrelevant.
Since Bob is actually Alice, trust in Trent is inherited by both parties.
Trent and Charlie have a working relationship– Charlie gets paid a lot of money to reveal Alice’s work. Charlie translates what Bob says to Trent and proves the words originated from Alice. Charlie can get paid to distribute literature sent from Alice; he also gets reimbursement for translating Bob’s messages even if Charlie doesn’t publish the work.
Charlie works hard and is always rewarded for his efforts. Charlie is dedicated to being honest with Trent.
Charlie gets reimbursed for the effort involved in understanding Trent’s extremely complicated messages from Bob — who is secretly Alice trying to get her story published.
Bob, Charlie and Trent all speak the same language.
Anything that Bob can do Charlie can do better, and anything that Charlie can do Bob can do too.
All in all, no one has to trust anyone entirely.
Just the network, everyone can assume Trent(BTC) is there for them.
Bitcoin’s only job is to be itself.
BTC is an intentional paradox.
If Bitcoin is the name of digital currency and the name of a digital currency designed like Bitcoin is a cryptocurrency, then it literally means safe money.
The Emergence Of Secure-Cash
Why does something like secure-cash, what seems to be necessary, or at the very least inevitable in the world we live in, beget massive amounts of judgement?
Secure-cash is for the people.
Secure-Cash is a cryptographically protected digital form of cash that is secure to use and can be distributed digitally across the globe and used in a variety of ways — it’s the exact equivalent of cash but digital. Bitcoin, along with other cryptos, is earning popularity for a few reasons. The most undervalued reason is that cryptocurrencies are controlled by numerous peers. Cryptos are digital money regulated by a network of computers running software. It’s distributed by peers, not by a government — meaning no central authority. Contributors make the Bitcoin network run, making sure that honesty is perpetuated and maintained in exclusivity.
Fiat currency always runs a risk of collapse, the majority must trust a minority to distribute a society’s money with fairness. The less trust the majority has in the minority, the more likely the majority chooses a substitute with more benefits. The majority has actual control because of sheer numbers. The majority can cause a shift if there is little or no interest in the continued usage of currency created by the minority. A federal reserve functions with a similar level of integrity. Too much control over monetary policies and currency practices can cause economies to spiral out of control and collapse under heavy burdens caused by debt. Almost all fiats that have ever existed have collapsed, or the organization of exchanging values and mediums changed to represent different portions of society.
Rome wasn’t built in a day, nor did it collapse within one. It took centuries of policy changes and slow internal decay.
The effects are glaring, slowly enacted practices like decoupling, debasement, and as a result, inflation had a considerable hand in the collapse of Rome.
If You Break Bitcoin–
You Break The Internet
A reliable cryptocurrency such as Bitcoin has components in its algorithm that make it a potential form of digital gold. Bitcoin uses a very respected set of cryptographic hash functions called SHA-256.
It was developed by the NSA.
SHA stands for Secure Hash Algorithms
256 is the hash value in bits
SHA-256 was initially published by the NIST, which oversees cryptographic standards in the United States. Cryptographic standards are integral to the security of any nation using the internet to transfer information. The NSA has designed further SHA functions in use today to protect the distribution of information. It goes without saying that, if our private information is disseminated through intelligence agencies, with few leaks or compromises, then it’s sufficient to assume the hashing component of the algorithm is secure regarding the Bitcoin network. Other functions of the bitcoin algorithm mean security is increased with the network size and ledger growth. If the internet is built with the same components of modern cryptography as cryptocurrencies, then ‘breaking’ bitcoin would wreck the integrity of the internet. Commercialized aspects of the internet — transactions occurring securely over the net — depend on standards of encryption.
Our problems now would be minuscule in comparison to weakening the security of our globalized information channels. If Bitcoin is breakable, that means that the very infrastructure of the internet would be fundamentally flawed. It would be hell on earth. Passwords, sensitive information, communications and broadcasts would be compromised. Thousands of people would be at risk, and millions could suffer.
The average person maintains at least one password for usage on the internet. Social media passwords, online banking passwords or email passwords. Most people are capable of keeping their password secret. However, there are a couple of problems with passwords. Risks involved with losing track of said password or it falls into someone else’s hands either directly or indirectly. Passwords are subjected to a certain level of exposure when used on the internet. This might amount to a compromise of sensitive data or information. SHA-256 gives Bitcoin a massive advantage in this area. A specific hash function creates a pair of keys; one key is private the other key is public, one cannot work without the other.
Private keys are kept safe and secure the same as any other passcode. Think of a private key as the password to a Bitcoin account.
The other half of the key which completes the passcode is given to the network as a public key. Think of a public key as a Bitcoin username.
Your public key is available to the public the same as any username on a social media account.
The same as a ‘private message’ — a visible public key creates a channel of communication between peers. Ensuring that the right message reaches the appropriate person.
Racing For Validation
Everyone can see your public key to send funds and verify transactions submitted to the network. Bitcoin works as a consensus network. Meaning as long as 51% of the network nodes are in consensus, then the system can keep functioning as a whole without compromise. Essentially verifying that the network is in the correct configuration. Each verified transaction adds another ‘block’ to the ‘chain’ of operations, this is where the term blockchain comes from when speaking about Bitcoin. However, there is no physical chain, nor does it have a predictable pattern in which the next link is to be arranged.
No-one knows who will be the one to validate the next block.
It’s known that there will be approx. 2016 blocks, when 1 block is propagated about every 10 minutes.
Finding the next block is like a rat race. It’s anybody’s game.
“This is a common point of confusion. There’s no such thing as being 1% towards solving a block. You don’t make progress towards solving it. After working on it for 24 hours, your chances of solving it are equal to what your chances were at the start or at any moment.
It’s like trying to flip 37 coins at once and have them all come up heads. Each time you try, your chances of success are the same.”
Creator of Bitcoin
Someone needs to send an important message to a particular destination.
The contents are sensitive so the sender creates a coded message. A reward is offered to anyone who can relay the message.
A password for the message is created in the form of a sentence, the password is cut in half. Half the words of the message are available to the public, the other half is kept by the sender and is unknown.
The sender of the note knows which way the words should be arranged because of their half and can verify the correct order of the known half.
Information in the message is interpretable in any way that the words are presented. However, to obtain the reward offered for deciphering the message, you must put the words in the same order they started. If they are rearranged correctly, a prize is given and the message is sent.
After 10 minutes the ledger changes and there is a new message to decode.
Blockchain technology is a foundational component in the structure of Bitcoin. Although I believe that thinking about it as a chain is counterproductive to understand what the Bitcoin network is in its entirety. The system will become, perhaps, the most influential of our time thus far. Technological advances created by bitcoin and other cryptos will lead us into another era of learning and growth. We built the infrastructure for this system over time. Throughout the various advances of network cables, information channels, hardware and multiple software integrations. The same as we built roads to accompany the towns, signs to address the traffic and laws to complement the system.
Blockchains or hyper ledgers are the one-directional superhighways of the internet. Information is protected from oncoming traffic and travels in its intended direction. The power of distributing information discreetly and securely is mighty in this day in age. Definitely deserving of an approach with more dignity. Well built highways direct massive amounts of traffic — without them, it would be unbearable to navigate anywhere. A blockchain distributes massive amounts of information securely. Without the advancement of blockchains, we would have one less way to distribute data securely across vast distances. I don’t see much of a difference here.
Hyperleders are digitally distributed ledgers capable of accuracy, durability and above all, reliability. A culmination of efforts and innovation. A system that slowly grew from the ashes. A lake formed from streams and rivers. We are on our way to an ocean, granted the flows are guided towards planned directions.
The Brain That Society Built
Bitcoin is built like a brain– an immensely complex network of participants, structured in a peer to peer manner. It’s basically rice for rice. You can exchange money for bitcoin, that is the easiest method to acquire it. A fair trade; currency for Bitcoins. Though, an underappreciated aspect of bitcoin exists. The fact that it is mintable with a computer and any person with an internet connection can obtain Bitcoin by validating transactions in the network. Allowing individual indiscriminate access.
Validated processes net new Bitcoins for the miner. A miner is simply a person who maintains validity in the network by ensuring that operations are not fraudulent. Bitcoins system is similar to a brain directing operations, it’s capable of handling our rigorous inputs, we are the neurons creating synaptic connections within the network.
It should be noted, one can mint their own coins. This is critical to my entire premise. Prior, worldwide, this type of system didn’t exist. A system that’s designed for every person, creating real equality. The creation of bitcoin proved it’s possible. On a basic premise, the network’s design allows anyone to access whats offered — like a brain with a bank of memories. In terms of trade, this is huge. Imagine if this was on a much more grand scale. The accessibility of exchange in a manner that is verifiable can be applied to any category. By changing the view of what is considered valuable, numerous systems can be designed. Anything has value if it means something to someone.
Many say there is no such thing as coincidences.
“Quantum mechanics is certainly imposing. But an inner voice tells me that it is not yet the real thing. The theory says a lot, but does not really bring us any closer to the secret of the ‘old one.’ I, at any rate, am convinced that He does not throw dice.”
Perhaps, it is by no coincidence that the development of cryptocurrencies was inevitable, and our innovations of technology ultimately lead us in directions that promote automation. Whether it be developing saddles to ride horses, wheels, carriages, and eventually cars with horsepower. Historically we’ve innovated inventions creating new technologies. Devices are invented to make our lives easier, bringing us further out of nature but towards a path of comfortability.