random cryptocurrency / cryptoeconomics thoughts 10

random cryptocurrency / cryptoeconomics thoughts #10

The below is unstructured, thinking out loud, a collection of independent thought bubbles written as a combined slab. There is not a sequential flow, paragraphs/ideas are random and undisciplined. No effort is made to stage them for easier reading/ingestion. It is not factored for concision. The goal is to approach the synthesis / elaboration of fresh ideas and compounded concepts that ideally lead to further expansion of the thinking around blockchain.

Shark skin

A blockchain is only as strong as its strongest-to-date hack. A blockchain should proudly and prominently display its history record of its strong hack attempts as a proof of its robustness/Lindy effect. A visual scar library, varied and mixed, proof of having toured (and survived) many storied hacking neighbourhoods. If the smartest/most powerful/most motivated hackers in the world haven’t tried to hack your chain and thus left scars on your dermis, then you don’t know how secure your chain really is. A much-hacked-on chain is stronger (worthy of more praise/more fit to survive) than a less-hacked chain. A blockchain should have a visible surface, publicly inspectable, as if it were the skin/hide of a fifty year old great white shark : it should be the summed total of the lingering scar tissue from the greatest attacks (hacking attempts) it survived. A blockchain’s skin should be this accumulating record of scars, an externally visible proof of the cumulative attacks it has endured. If you are not allowed a view of these massed scars, then you should probably not trust that chain yet.

It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able to adapt to and to adjust best to the changing environment in which it finds itself.

-Charles Darwin in his “Origin of Species.”

Darwin perhaps might have gone one step further to advise us that your body/genome is your proof-record of a billion-year process. Your body is your longest-chain-yet proof-ledger that you were the fittest-to-survive-to-date and the precise manner (your genome’s encoded history of changes/improvements/learnings) in which it was accomplished. Similarly, a blockchain’s Github codebase is thus the collected ‘genomic residual’ of what precise pattern of coded logic was needed to survive all the massed-hacking-attempts-to-date visited upon that codebase to-date.

The mind alien

“Bitcoin even copies itself onto as many computers as it can, by incentivizing individual people to run full nodes and mine new blocks.”

Gigi from


“Bitcoin is the first example of a new form of life. It lives and breathes on the internet. It lives because it can pay people to keep it alive. […] It can’t be changed. It can’t be argued with. It can’t be tampered with. It can’t be corrupted. It can’t be stopped. […] If nuclear war destroyed half of our planet, it would continue to live, uncorrupted. ”

— Ralph Merkle

Crypto is the mind virus. Whilst the obvious approach is to define cryptocurrencies and cryptoeconomics in terms of them being economic, computing and/or social constructs, perhaps framing the epistemology of crypto in virus (life bearing organism) or ‘alien being’ terms needs to be considered. Crypto is a mind hack: it is a construct that invades (infects) your pre-existing (fiat) mental reality then proceeds to probe it for further entrance/fault lines, thus it proceeds from a small initial infection, through to a full overtaking exploit, then to a complete replacement/refactoring so as to wipe to original host/state from existence and completely subsume it into a new (alien, crypto-only) being. Such a case means attempting to derive the axioms and heuristics/rules of cryptocurrencies and cryptoeconomics in purely ‘classical’ economic terms risks missing a vital explanatory framework: how viruses infect-then-overtake-then-rewire their hosts. Explaining and measuring cryptocoinz against old-world supposed-equivalents is a category error. You can’t explain motor cars in terms of hay consumed, height in hands or hurdles jumped. Crypto is a mind alien, it has new rules, new language, new origin myths, new logic; it is driven by new dynamics not borrowed/reinterpreted from the equities/bonds/forex markets. Understanding/learning/addressing/using crypto is learning to speak alien-talk to a creature from a spaceship landed on your old-world front lawn that is so weird it completely mind-fucks your old ideas. And then it eats you whole and you subsume into its reality.


Alien Mind Controlled Snails. A type of parasitic flatworm, called the green banded broodsac, is capable of invading a snail’s body and controlling its behaviour. This worm turns a snail’s eyes into caterpillars and takes control.

Satoshi’s Implication

It is commonly stated that Satoshi gave us the first useable, relevant, scalable solution to the so-called Byzantine General’s Problem. https://www.cryptonomy.com/knowledge/byzantine-general-problem

Is it impolite to point out that Satoshi essentially forces us to adopt the implication that we humans are inherently Byzantine? Behavioural economists might further point out (using fMRI scans) that human brains go chemically funny even further than usual when money (or food or sex) are involved. These ‘goods’ hack our neurology and render us non-trustable around such temptations. Satoshi issued 50 Bitcoins per block initially to have the miners perform trillions of hashes per second as the way to defeat/minimise Byzantine corruption. Satoshi knew he had to admit to and fight this dragon, hard. When rewards (incentives) are involved, the Byzantine General’s Problem arises and you should no longer trust the messengers, further, you should assume they will corrupt the messages for their own gain. Satoshi was 100% certain of it. The Byzantine General’s Problem essentially thus implies that a) humans are increasingly vulnerable to lying as the rewards (incentives) for doing so scale up and b) humans are almost predictably certain to be Byzantine when money, food or sex are involved. Cryptocurrency is thus essentially a machine specifically designed (‘mechanism design’) to defeat the human brain’s inherent inability to withstand its own weakness at the Byzantine General’s Problem. This could also be restated as saying that human capacity for enlightened self-interest (altruism) will always be overpowered by Byzantine ‘cheating’. Or, at least, you must always assume a socially-common comms channel will be infested with Byzantine (unreliable) witnesses. Cryptocurrency is thus the forever-study of how to design an increasingly useful tool that inherently targets the defeat (or defanging) of the human brain’s weakness in Byzantine General’s Problem contexts. The deep implication (Satoshi’s Implication) is that the Byzantine General’s Problem of cheating/unreliability arises without fail anytime there exists a reward/payoff. Security wonks will say: “threat follows value”. Crypto folk have to accept Satoshi’s Implication that Byzantine attacks attend (arise, infest, soon appear, will game) any system that has an optimal (Nash, Pareto, cooperative game theory, etc.) solution. If, by being Byzantine, the universe can figure out a way to diminish the otherwise-honest natural effort (amount of work, energy) needed to gain a prize (arrive at a solution, solve for an answer), then the universe will do so as to ‘optimise for laziness’. This is impersonal: the universe doesn’t mean to hurt us by this Byzantine leaning, but why spend Joules of energy altruistically when a shorter path can be found? We might state this as: Byzantine actors reliably arise to target any sign of altruism. Satoshi thus damns us forever to making cryptocurrency the pursuit of a design to best limit/defeat the Byzantine General’s Problem version of cheating/unreliability. Nakamoto Consensus essentially states: “Assume everything (every proposed block) that everyone (every node) around you tells you is corrupt, until you verify it by yourself, rigorously.” Satoshi recasts the world as being irrevocably Byzantine at every step: “all your p2p friends are liars in everything they will ever tell you and will do that so as to steal all your money/food/sexual partners for the least amount of cost to them for the effort involved to do so”. . recent list of Tweets/peepeth’s: see https://peepeth.com/blacque

. democracy/representative democracy: small fraction of voter base (“swinging voters”) + plus rigged bias of electoral college (1 person != 1 vote) means summed choices of very small fraction of the total sample space get asymmetrical power to decide the outcome. Give me a full verifying, full validating blockchain/DAO, that slashes any small number of bad actors, any day. . Bitfinex, Binance, Huobi, Kraken, et al: not so much a crypto exchange, as a fractional reserve custodian of private keys Long live DEXs, http://localethereum.com , Bisq, IDEX, … . life coaches, psychologists, economists will tell you: you are the sum (or residual) of the choices you made in your life to-date. crypto teaches you: you will be the sum of the outcomes of the staking incentives/game theory payoff matrices you chose to respond to . a kind of crypto-Moore’s Law — “every year or two, adoption quadruples as scaling improvements double the chain performance” or some such . knowing about crypto yet continuing to use fiat, earn salary in fiat, buy groceries in fiat, is same as requesting Big Macs for lunch as your recuperate in your hospital bed after a heart attack . banks issue money: Fed Reserve USD, Euros, Yen blockchains issue coins: BTC, ETH companies issue DAOs: defi, DEX, Aragon/BitNation, EOS commentariat issue definitions: NVT, TCR’s, STO’s, Cryptocapital vs. Cryptocommodities, token velocity thesis, MV=PQ, … … each successive stakeholder grouping generates its own new (next-level) language model. Money/crypto is a socially-driven never-ending conversation: expect the definitions to evolve over time as thinking around it evolves. . the internet was an O/S for the global info-driven datasphere the blockchain is an O/S for trust minimisation the selfDAO is an O/S for your brain’s mental self-sovereign future-state . 19xx: you are the consumer > Madison Ave, malls, the burbs… 20xx: you are the product > Facebook, Google, Cambridge Analytica… 201x: you are your own bank > bitcoin, blockchain, DLT, DAG… 202x: you are your own token > DAO, DAC, IEO, DID, BitNation… 202x: you are your own nation, your own government, your own sovereign… you own it. you’re on your own. you are your private key. . Hard money is information — fiat money is datasmog Fair markets are balanced conversations — Wall St is smack talk DEXs are social media threads — CEXs are Facebook . I lose your money: capitalism alt. moral hazard You lose my money: socialism alt. GFC, QE, bail in, crony capitalism, NWO, IMF, The Fed We all lose all our own money: crypto daytrading . 19xx: IPO 2017: ICO 2018: STO 2019: IEO 2020: uh-oh . Satoshi: “Here, have my codebase. All 7.6 billion of you should run one. Like me, use a pseudonym — don’t make it easy for the po-po.” Crypto-noobies: “No, I’m lazy, I’ll trust someone else to do it on my behalf. Facebook/Google are my trusty friends. What, me worry?” . If you can name > 33% of who your miners/validators/block producers are, then sorry, you have missed the point of blockchain, and also, some police force, justice dept and/or regulator will soon knock on those doors. Congratulations on outing yourselves. . car replaced horse….. email replaced Post Office…. Amazon replaced - as a crypto OG, you are not a blockchainer: rather, you are ‘banks 2.0’. 10, 20 yrs from now, there is no employee called ‘a banker’, there are only stakers and HODLers a.k.a. banker 2.0 . US currency: “In God, We Trust” crypto OG’s: “In crypto, we verify”

Disclaimers: YMMV. This is not investment advice. I’m ego-driven, clueless and biased, so do your own thinking. I’m not qualified, I have no special privileged position to drive my insight, I’m a nobody, is what you should assume about me and what I say here.

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