The Devils Playground: Bitcoin’s Role in the End of the World

I’m not a particularly paranoid person but I understand many of the concerns shared by technology visionaries with regards to artificial intelligence. Elon Musk and Sam Harris have been some of the great minds speaking out on this topic with Musk warning that we are “summoning the demon.”

I believe there is one technological development adding even greater credence to their forewarnings that is yet to be considered. Blockchain protocols like Bitcoin and MineFilecoin are creating the perfect AI incubator. They might provide a secure location for the demon to hide and secure itself; something I’ll refer to here as the Devil’s Playground.


Blockchains are AI-Friendly

In a future where censorship-resistant storage is a reality AI would find the perfect place to secure itself without the concern of being “disconnected”. It would seem rational for an AI to secure itself (and create backups of itself) on distributed & encrypted blockchains where it could learn and grow over time.

Bitcoin is the first example of a decentralized autonomous organization. Various participants are incentivized by the mechanisms of mining, speculating and transacting to contribute to the blockchain. The past 8 years have proven these incentives are capable of establishing secure anti-fragile systems free from the control of any central entity.

Filecoin is a similar blockchain protocol currently in development. The key differentiator Filecoin has from Bitcoin is that it’s backing is not proof-of-work mining (mine using electricity) but rather storage space (file storage capacity). Oops! — looks like we just created a digital realm we can’t control. Well, maybe we can turn it off!?!

We Can’t Unplug It!

Some might be tempted to say “just turn off the blockchain”. While this would seem a rational solution it is the very thing blockchains are designed to resist. The moment an AI inhabited an establish blockchain it would likely go about distributing itself further (establishing additional nodes, increasing the hash rate, gaining more storage, etc). Furthermore, if there were ever a time where a threatening AI were to inhabit a blockchain it would likely already be too late (listen to Sam Harris discuss the potential rate at which an AI might learn in minute 7 of his TedTalk).

Sadly, human greed is also an impediment. Humanity has a long history of being selfish and failing to act in the collective best interest of our species (take fossil fuels and climate change for example — the USA backing out the of Paris climate agreement). While many might unite to try and intervene it would likely be futile – too many miners are making great profits!

The End is Nigh!

The premise of most science fiction works related to AI often revolves around the “breakout” moment for AI itself, the moment it finally escapes the grasp of humanity and goes out into the world. While great minds are currently developing technologies many fear may someday grow capable enough to become self-aware, many may not realize that in parallel the world of distributed censorship-resistant blockchains is expanding at a rabid pace creating the perfect playground for these demons to hide.

Anyhoo… just something I was thinking about. Sleep tight!


On Hard Forks: They’re Getting Harder

Since the Ethereum hard fork on July 20th Ethereum Classic (ETC) (the original blockchain which includes the DAO heist) has found increasing support beyond just banter on twitter and crypto forums. It has grown substantially in terms of hash rate, price and trade volume. (It even surpassed Ethereum trade volume on 7/26/2016 at over $105 million).

At the time of the hard fork the new chain established almost instant separation in terms of hash rate leading many to declare the hard fork a success (Ethereum Blog Post). Many are beginning to realize that the fight may not be over. This is the first sign that in the maturing cryptocurrency ecosystem hard-forking a mature protocol provides challenges beyond hashing power — including the hearts, minds, and incentives of speculators and exchanges. With it’s own hard fork in the pipeline it may be a good idea for bitcoin to take note.


A Blockchain Street Fight

Anyone remember Double Dragon II for NES? No, just me? Well, in this game there was a point where the character is forced to fight his own shadow — a near mirror image of himself. In the most basic of analogies this is what is playing out before our eyes with Ethereum. We now find the two versions of the protocol battling it out.

Screen Shot 2016-07-26 at 6.34.12 PM

If I had to decide which was which I would call the hard-forked version of Ethereum the “shadow” chain. After all, it’s fair to say it is a less pure.


From what I see, this battle is being fought on several fronts. The historical elements of a hard fork include the following:

  • Mining Hash Rate: On one front, miners driven by profit motive are finding that rewards for mining Ethereum Classic in the immidiate time after the hard fork are greater than those of Ethereum leading to increased competition for hash rate between the protocols. This can be seen here: What to Mine
  • Perception & Social Media: Sadly this is a reality which I don’t care to discuss — but if you follow this stuff online the infighting is laughable and makes me slightly ashamed to associate myself with this industry.

A New Layer of Complexity

The new challenge facing open-source protocol forks is the maturing infrastructure surrounding them. Some of the new fronts include the following:

  • Exchanges Enabling Trade Volume & Price: Within days Poloniex exchange made ETC available to trade. Since then Kraken, Bitfinex and Shapeshift have either gone live with ETC trading or shared their intentions to do so. As a result ETC’s 24-hour trade volume now exceeds that of ETH. Its price has also increased substantially with a market capitalization ranking ETC a top 10 cryptocurrency. Where as a less mature ecosystem wouldn’t be able to support the previous chain the industry can now almost instantly get the previous asset on exchanges.

Ultimately, this new layer of complexity may indicate that as the ecosystem becomes more robust future hard forks could face new challenges not faced by previous forks.

So What’s Next?

I do not pretend to know enough to accurately predict how this battle will play out but that won’t stop me from speculating. It would seem the final stage would lie with the developers and companies building upon the blockchain(s) themselves.

If both chains can establish effective hash rates, mining incentives, communities, trade volume, and price it will come down to adoption by developers and companies.

  • Developer and Startup Preference: We’ve seen this play out with other blockchains (example: Onename moving from Namecoin to Bitcoin) where it became clear that one blockchain was favored over another. In this case it likely sealed the fate of Namecoin. The adoption of these companies can make or break a blockchain.

The ultimate deciders may be the developer and entrepreneurial community. Will they choose ETC, ETH … or will the division rendered by competing chains stagnate Ethereum sentiment and give Bitcoin maximalists more time to time to mature their more expansive projects built to compete with Ethereum with a proof-of-work backing. (Examples include YoursNetwork, Sidechains, Lightning Network, Rootstock, etc.)

One thing is certain … there will be more hard forks on open source blockchains and the Ethereum civil war will provided a number of great lessons for these projects. Hard forks are getting harder but with careful planning and attention it may still be possible to mitigate the risks and pull them off smoothly. Only time will tell.


On Consensus: The Good, Bad & Ugly of ‘Consensus Maximalism’ for Open-Source Blockchains

When first introduced to bitcoin I experienced an epiphany of sorts in realizing I didn’t understand what money was. One of my first assignments was to educate myself on what makes money money. This gave me a new understanding and appreciation for bitcoin and blockchain technology as a whole.

I believe the Bitcoin, Ethereum, and open-source blockchain communities are collectively suffering from a similar ignorance revolving around the idea of consensus. I call this affliction ‘consensus maximalism’ and hope this post can help shed light on this issue and share a different perspective on this concept.


Only known photo of the world’s earliest blockchain.


Defining the Term

Merriam-Webster provides 2 variations of the primary definition for the term consensus. They are as follows:


a :  general agreement

b :  the judgment arrived at by most of those concerned

Most notable about these definitions is neither includes any reference to absolute agreement. In lieu of absolute, total, or complete the definitions contain the terms general and most. This is a common oversight. I’ve observed this misunderstanding frequently in the Bitcoin and Ethereum space … I call it ‘consensus maximalism’.

Consensus Maximalism vs. Consensus in the Real World

I would define ‘consensus maximalism’ as the belief that to reach consensus there must be absolute agreement by all parties as to the best path forward. The fallacy is this level of rigidity would make any real-world consensus relatively impossible. Real progress requires a real-world definition of consensus.

Dr. John Toussaint, a former doctor & CEO, leadership guru and author famous for his contributions to organizational transformation work in the healthcare space was the first to bring to my attention that consensus is most often never about reaching full agreement. It is best described by the following excerpt:

…synthesizing the wisdom of all the participants into the best decision possible at the time. When you consent to a decision, you are giving your permission to the group to go ahead with the decision. You may disagree with the decision, but based on listening to everyone else’s input, all the individuals agree to let the decision go forward, because the decision is the best one the entire group can achieve at the current time.

After all, the term is rooted by the word ‘consent’. Very few systems, organizations, or communities have ever reached unanimous agreement on any decision. They always require a minority to ‘consent’ to moving forward in spite of their views for the benefit of the majority. Participants often have the option to ‘exit’ should their convictions be strong enough.

The Irony of Consensus Algorithms

The reality is that even in distributed systems consensus is never 100% at any time. This is displayed by orphaned blocks, alternatives cryptocurrencies, and of course hard forks. It is the great irony of this space that the communities supporting these systems struggle so greatly to achieve consensus in their effort to innovate upon consensus-mechanisms (blockchains).

The Good

In my view, as with many things in life, there is likely a smaller minority of ‘consensus maximalists’ who act as the squeaky wheels. This is not to say that this is all bad. In fact I believe it has some great benefits including:

  1. Increasing the difficulty to change highly distributed protocols with larger consensus pools (Bitcoin Core’s relative conservatism as an example)
  2. Encouraging outliers & dissenters with great conviction to ‘exit’ or support minority forks for communities & protocols. This drives creativity & innovation. (Every alt-coin ever)

The Bad

It stagnates progress to the limits of acceptance encouraging participants to ‘exit’. Nothing is more painful then being in the deadlocked state of consensus failure. Be it the decision as to where to go to dinner…

You: “I want to eat out … where would you like to go?”

Partner: “I don’t know, nothing sounds good.”

You: “Ugh… I don’t even want to bother.”

…or the debate on how to scale the world’s most promising blockchain.

The Ugly

The failure to reach consensus often blinds the minority participants from the shared purpose/goal of the entire population. Gun controls a good example of this. Nobody wants mass shootings but many people have strongly held opinions as to how to impact the problem… The ugly reality is as a result many of these camps end up fighting one another rather than focussing on actual experiments/solutions.

This unfortunate reality has reared its ugly head several times in recent years … examples including the bitcoin blocksize debate and the DAO / Ethereum hard fork.

The Good News

One benefit that blockchains have is the almost instant ability for those that do not consent with the path forward to fork. Ultimately anyone supporting or interacting with the longest chain should have nothing to complain about… by doing so they are ‘consenting‘ to the decisions of the majority of hashpower.


The Revelator: On Permissioned Ledgers & Bitcoin

r evolution

Opposing camps have emerged regarding the debate of permissioned ledger technology and Bitcoin. Here I summarize my thoughts on this dynamic and make the case that permissioned ledger tech and bitcoin represent two radically different experiments; one evolutionary — the other revolutionary.

A Difference in Opinion

I think it is fair to say that the perspectives of these camps could be summarized as follows:

Proponents of Permissioned Ledger Tech: Believe it is possible to harness value through blockchain technology innovations without the requirement of decentralization or native tokens. Believe a blockchain is a distributed ledger. Are generally blockchain agnostic. Work with legacy systems to explore savings opportunities such as clearing. (Ex: Ripple, R3 CEV, ERIS).

Opponents of Permissioned Ledger Tech: Believe the primary benefit of blockchain technology is the ability to transact P2P without the need for a 3rd party (legacy systems). Believe a blockchain is a distributed and decentralized (to the extent possible) ledger with a native token. Generally support the most decentralized blockchains; bitcoin, litecoin, ethereum, etc.

I imagine many will read these definitions and assume that these two camps are fundamentally at odds with one another. In the landscape of public debate they are often presented as such.

I believe these assumptions to be misguided based on the idea that these experiments (permissioned ledgers & bitcoin) represent two drastically different efforts. Permissioned ledgers represent projects focused on improving legacy systems. Bitcoin and decentralized blockchains represent a movement to remove the need for legacy systems entirely.

Evolution vs. Revolution

Evolution can be defined as a gradual change or improvement. When comparing the Model-T to the Tesla the superiority of the Tesla is the result of successive evolution’s in automotive technology.


The first Model-T went into production in 1908. The first Tesla Roadster went on sale in 2008. 100 years of automotive evolution.

Revolution can be defined as a sudden, complete or marked change. When comparing the Tesla to the first airplanes the superiority of the airplane is the result of a revolution in the concept of transportation.


The first Tesla Roadster can only drive on roads and can not leave the ground, traverse over a stone wall or cross a river. The first airplane flown by the Wright Brothers in 1903 traveled 120 feet by air and could do all of the above even in its primitive state. This was a revolution in transportation.

Blockchain Technology: Evolution & Revolution

Permissioned ledgers represent an evolution in banking. The goal of permissioned ledgers experiments is to explore how legacy systems could marginally improve with the use of the technology. The primary focus is to understand what kind of savings and efficiency might be achieved to the benefit of financial institutions and their customers. If I were to take the liberty of assuming the principles of those working on such efforts I might imagine them being as follows: explore how blockchain technology can provide better services at lower cost to customers.

Distributed and token-based technologies like Bitcoin represent a revolution in banking. The seed of bitcoin efforts (and where most of the debate in the space is focused) is how to establish as decentralized a system as possible to ensure transactions can be secured P2P with no middle man. This is revolutionary in both thought and application and has significant implications if the movement grows. If I were to take the liberty of assuming the principles of those working on decentralized efforts I would imagine them being as follows: explore how blockchain technology can establish a sustainable system enabling P2P transactions without the need for a third party.

A Healthy Co-existence

An evolution in banking is a good thing. If legacy institutions can leverage permissioned ledger technology in the short term, however marginally,  to reduce costs and improve the services they provide their customers this is a good thing. Who doesn’t want to be charged less and have faster clearing of their assets?

A revolution in banking is a great thing. If the promise of P2P systems like Bitcoin can be achieved at scale in the long term  the world will be a dramatically different place in the decades ahead (likely for the better). Who doesn’t want to have true financial autonomy?

Today we have both planes and automobiles. Despite the revolutions in transportation not everyone is a pilot — and evolution in automotive technology is welcome and frequent. These technologies co-exist and likely will for some time.

I view permissioned ledgers and blockchain experiments in much the same way. Despite the revolutionary opportunities Bitcoin foreshadows not everyone uses it yet — and evolution in modern banking should be welcome in the interim.

That being said, I welcome the day I can fly my Tesla over a river while paying my electric bill in bitcoin.

An Overlooked Development: Ethereum, IBM ADEPT and the Internet of Things (IoT)


It has certainly been an eventful start to 2015. The majority of headlines have dealt with bitcoin price volatility, regulated U.S.-based bitcoin exchanges, and… well… bitcoin price volatility. Amidst the flurry of headlines I believe the most significant development in decentralized systems has been wildly overlooked — that of the IBM ADEPT publication and the functional IBM / SAMSUNG demo from the 2015 CES Conference built with Ethereum’s beta protocol — the implications of which are significant. I’d like to briefly shine my humble little spotlight on these here.

First – some relevant links; If you’d like to really dig into what I’m about to address you can view both the IBM ADEPT paper (pre-publication), the IBM paper on “Device Democracy” and a video of the IBM / Samsung ADEPT demo from the 2015 CES Conference. Links below:

IBM ADEPT Pre-Publication — Cliffnotes version: IBM states their case that decentralized P2P solutions (blockchain technology) are the preferred approach to enabling the future “Internet of Things” (IoT). Claims centralized approaches are too costly, not scalable, and lack privacy. The ADEPT (Autonomous Decentralized Peer-To-Peer Telemetry) platform describes how this approach might address these issues and enable a more ideal IoT.

IBM on “Device Democracy” and the Internet of Things — Cliffnotes version: Gives context to the scale of the future IoT (billions of interconnected devices) and describes the shift from ‘special purpose computing’ to ‘general purpose’ computing with greater capability.

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Source: IBM Device Democracy Paper (2015)

IBM / SAMSUNG ADEPT Demo (CES 2015 – Las Vegas, NV) Cliffnotes version: IBM and Samsung have built a functional demo (based on the Ethereum Protocol beta-release) which demostrates the use of blockchain-based smart-contracts for appliance warranties. This is a big deal — one of the first working examples of such a use-case.

As described in the papers and demo above — the potential impact that blockchain technology may have on the Internet of Things (IoT) is significant. As a more cost-effective, scalable, and secure solution blockchain technology will enable millions (possibly billions) of interconnected devices to behave autonomously in very sophisticated ways that were never before possible.

What is most profound and game-changing is the ability for devices to behave autonomously and participate in not only the ‘Internet of Things’ but the ‘Economy of Things’. In the demo the presenter shares a use-case where a dishwasher detects that it is low on detergent and automatically proposes a new order of detergent. Such a capability foreshadows a host of future innovations for decentralized autonomous organizations (DAOs). Picture a self-driving Uber-equivalent refueling independently, getting an oil change, ordering new tires, paying tolls, renewing registration, etc. — all while paying for such services with it’s own earning from fares.

In the second use-case demonstration we see something with implications equally as significant — the ability of a device to diagnose a failed part and reference the blockchain-based warranty contract. In such scenarios a remarkable amount of work is removed from the process of verifying warranty claims and providing services for repair or replacement. Currently most warranty claims involve significant costs — phone calls to customer service, employee salaries for customer service reps, time for verifying contracts, storage and security for warranty contracts, capital and labor for repair or replacement… the list goes on.

In a world where devices operate autonomously — where warranties are completely secure and verifiable on a blockchain — such costs become almost non-existant. The device can sense a part failure, automatically verify the terms of the warranty contract, schedule the next necessary action (part replacement, repair, re-order, production, etc.), pay for the required actions, and even schedule a proposed replacement date based on the secure calendar of the owner. When you combine this with a future where 3D printing is common another such scenario might include the proactive delivery of a computer-aided design (CAD) spec — so owners have the option to print and replace the part themselves. When considering devices with enhanced self-diagnostic techniques the pre-order of parts in anticipation of failure could significantly reduce down-times or the over-production of replacement parts.

When discussing a future where the IoT is a reality many express fear that it will lead to a “1984-esque” scenario where privacy no longer exists and must be sacrificed to experience the benefits of interconnectedness. This is worth addressing here as the implications I’ve just discussed will most certainly raise the eyebrows of those sharing such concerns. Thanks to blockchain technology the benefits of a completely interconnected P2P world may be feasible with little-to-no sacrifice of personal privacy — blockchain technology is more likely to provide even more security and privacy then we currently experience in our less-connected existence — all the while reducing cost and enhancing experience. We may eventually have a world where we enjoy benefits we are only just beginning to imagine — where we get our cake and eat it too.

It is year 6 of the post-blockchain world and we are only beginning to see the implications of decentralized autonomy. These early demonstrations are humble — but like the first brief flight by the Wright Brothers — they chart an entirely new realm of future possibility.