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April 24, 2015

Bitcoin needs no changes to destroy your world

Filed under: Uncategorized — @ 12:00 a.m.
Bitcoin needs no changes to destroy your world

In the context of Bitcoin, and other "blockchain tekmologies", "pruning" reduces the amount of disk space required to validate incoming transactions. This, while not the most terrible idea in the world1, has little or nothing to do with bitcoinating. I neglected to discuss anything but the highest-order technical aspects of what it means for a piece of software to bitcoinate in the linked post, and now find myself compelled to rehash what Bitcoin actually accomplishes and why those accomplishments are so awesome2. The main things that Bitcoin offers over the traditional fiat monetary instruments are: a fixed economic base3, uninterdictable transactions and unfreezable funds, and an immutable history of all transactions that have ever taken place, secured by proof of work on the technical side and mutually-assured-destruction on the game theory side.

Bitcoinating very specifically has nothing to do with: making people rich by virtue of holding bitcoin keys, "banking the unbanked", processing as many transactions as Visa, or any of the other entirely orthogonal concerns USG muppets routinely trot out in vain attempts to undermine the thing in the way they've become accustomed to coopting other "open source" projects like GPG and OpenSSL.

Hilariously, nobody talks about the fixed monetary base anymore - it's almost as though Superman were to actually show up on Obama's front door, willing and able to stop Russian nukes mid-flight (or ISIL nuke-suitcases before they even got to the airport, to update the narrative), and after the initial hubbub died down, all anyone cared to talk about was the color of his cape and what the color scheme implied for equality and gender relations in the submariner forces. This orientation of the discussion away from what is important and towards that which is unimportant is the hallmark of fiat psyops hell-bent on undermining the strength of what just might become the future's monetary base. Of course Bitcoin's not important because it has an entirely fixed monetary base - it's important because the whole world might use it, and with the narrative so shifted, the controversy of "how much of an asshole are you for wanting to exclude the unbanked" can be taught, and the discussion framed so as to make regular block size increases sound sane4.

The monetary base thing5, while cool and important does not eclipse in coolness or importance the twin features of uninterdictable transactions and unfreezable assets. Under the current US/NATO-controlled monetary regime, any transaction that exceeds a certain size6, or moves funds to untouchable-caste people bears an extremely non-zero risk of freezing the entirety of the transmitter's assets with absolutely no recourse. This is always done in the name of "combating terrorism" or "saving women from slavery" or "preventing child pornography" or any other of a dozen things that sound great on the surface but the execution of society-wide guarantees against their existence of necessity implies an unconscionable degree of interference in private lives by the government7. A feature of Bitcoin nearly as important to the destruction of fiat instutitions as the forever-fixed monetary cap is that transactions cannot be blocked, and funds cannot be frozen8. But again, let's argue about the color of Superman's cape.

Finally (for the purposes of this piece), there is the immutable transaction log. The log demonstrates incontrovertibly the complete heredity of each and every satoshi, from coinbase to unspent output. This globally-shared, append-only log cannot be disentangled from that which is Bitcoin. Nodes that run with "pruned" blockchains will still always depend on the existence of nodes with unpruned blockchains from which to sync. Perhaps in some idyllic (for the fiat shitgnomes) world, the entire Bitcoin network would switch over to this "headers first" synchronization method, bypassing the all-important verification of each transaction in each block.

Fully syncing nodes are of central importance to the Bitcoin network. During sync, a node downloads each and every block, and verifies each and every signature - this is how we discovered the transaction in block 168,001 that would only verify when piped through a Satoshi codebase compiled with specific versions of OpenSSL9. Charitably, the Bitcoin Core group are just trying to make the world a better place for people who can't afford 100G of SSD disk space10. Uncharitably, the headers-first syncing approach opens the door to all sorts of attacks on syncing nodes, blockchain pruning opens up local nodes to who knows what other kinds of attack by virtue of their not having actual, complete blockchains on disk, and all of this is being pushed instead of, say, removing the existing braindamage from the full-block sync11.

With the notions of the immutable transaction graph, the uninterdictability of transactions, unfreezability of funds, fixed monetary basis and limited supply of space for transactions solidly in mind and held to be the core features12 of Bitcoin, let us briefly examine and discard three common notions random internet people like to talk about when pretending to matter by talking about bitcoin furthering the fiat agencies' platform: getting rich from holding13 coins, inclusion of the marginal, and transaction volume.

That one can grow wealthy from being wealthy is a longstanding mental bug from the fiat paradigm. As the monetary base inflates, anyone with two brain cells to rub together and a reasonably-sized pile of money will grasp rather quickly that they must keep whatever value they've managed to accrue in their lifetime in assets that hold value relative to whatever fiat currencies are being debased - hence the notion that the stock market must go up 8% every single year14. Given that people who fit those criteria will take that course of action, it stands to reason that their net worth in fiat denomination will grow much faster than the net worth of poor buggers like myself who must scrape each pathetic food credit off the ground individually, occasionally finding some surplus with which to save for the lean times. This does not, however, hold in bitcoin. Our monetary base inflates at a precisely known rate, which means that those investing significant sums can bake the time value of money into their investment calculations. Furthermore, it has been empirically demonstrated time and time again that it is nigh impossible to see any sort of bitcoin-denominated return on bitcoin assets15 (S.DICE perhaps aside). Even S.MPOE, the bitcoin stock with the longest history of trade recently took something like a 60% shellacking (probably a delayed response to Popescu's discontinuation of the options and the revenue source that entailed).

A sillier notion even than that "we" must "do things" in order to increase the fiat-denominated value16 of "our" Bitcoin holdings17 is that growth in the use of Bitcoin is a good thing, qua growth in the use of Bitcoin. Anything that looks like an exponential curve is likely unsustainable in some regard: Tesla's stock price eventually flattened and the Bitcoin ramp to 1200 proved to be a fleeting artifact of "to teh m00n!" hysteria, for just two examples. Any time I see exponential curves, I can't help but think of every startup growth projection that I've ever seen - and we all know that startup growth projections only ever serve to get investors greed muscles twitching18. Mind you, I'm not averse to raising funds, or buying assets on the ramp, but the shit is rarely sustainable and the growth curve itself cannot ever be the endpoint, but the value prop to end users must be19. In the same vein, I'm not averse to people using Bitcoin, but I'm averse to diddling Bitcoin in order to get more people using it.

Beyond "increasing usage" and "increasing the value of our coins" is the "make the network scale!!!1" nonsense. As a point of fact, Bitcoin is not consumer-grade technology. In order to participate as a full member in the "bitcoin club", you must be prepared to store an actual infinity of data20. The drive to "get moar users!!" is pure fiat psyops, serving only to "teach the controversy" that Bitcoin is hard for normal schmucks and it should be easy like everything else in fiatlandia. Bitcoin's barriers to entry are one of its unsung virtues in my mind. That you must be baseline competent with computers in order to operate a node, and that you must have adequate capital to ensure access to ~100GB of SSD storage, and that you must be an articulate, intelligent human in order to keep up with the rest of La Serenissima are all good things. Including the marginal simply leads to a party full of dudebros in popped collars, on the basis that "hey, some cute girls might show up!". They won't - you'll just get dudebros21.

Ergo, it's entirely unnecessary to "scale the network" to approach SWIFT or Visa volumes. Aside from the fact that "sidechains" and related technological solutions are entirely unnecessary in point of fact when you can send arbitrarily small amounts of bitcoin via MPEx, Bitcoin as exclusionary technology is central to its importance to the new world's future. Where the old world order sought to unite all peoples under one banner in order to mass the largest mob possible to lynch anyone standing in their way, Bitcoin is here to establish the dominance of the few over the many. I am not saying that the needs of the many will not be heard or, when they're justified needs, attended to, but I am saying that they must be channeled through their liege lords instead of democratically elected "representatives" who solicit donations from the rich by promising to protect them from the ravages of the destitute mob, and votes from the destitute mob by promising to protect them from the depredations of the vile capitalists, ultimately serving only their own cronies at the expense of both those who funded their campaigns and those who voted for them.

It does not amaze me any more that people insist on blathering about sidechains, scaling the blockchain, and making clients for the network that fail to fulfill the entirety of the protocol. The old world is devoted to its machinery, and will leverage all of the democratic tools of "discussion" and "teaching the controversy" in order to dilute the importance and efficacy of Bitcoin. Remember that there are things that matter about Bitcoin, and things that do not. It is entirely happy to ruin the old world without a single change, as it is right now, and needs no improvements to do so. Suspect everyone who seeks to push changes to Bitcoin's core functionality of being either unwitting stooges or outright puppets of the ancient power structures who depend on there never being a thing against which their endless printing can be benchmarked.

Footnotes:

1

<mircea_popescu>: there isn't anything particularly wrong with the approach, much like there isn't anything wrong with holding up a sign, or drinking a cup of coffee.
<mircea_popescu>: once people involved start imagining that holding up signs / drinking coffee is relevant to bitcoin, they have somewhat of a problem.

2

I find myself saying "is not the XXX enough?", and must now put the X's into words so that I can start linking to the words instead of repeating myself endlessly on IRC.

3

La Serenissima is currently arguing regularly about whether this means strictly the 21M coins or also the amount of space available for transactions in blocks. Herr Popescu recently postulated the heterodoxy that block sizes might be better off smaller.

4

Sane only, of course, to the derps who think that derping on Reddit and concern-trolling matters.

5

Which still blows my mind! 10-year-old me had regular shit-fits about where "money" comes from, whereby it gains value, and who gets to issue it. I still routinely have to consciously not engage in discussions about the relative "goodness" or "badness" of Federal Reserve actions - but that's an easier trick these days now that Bitcoin exists, and I can relax about people diddling my fraction of the monetary base (0/21M, in case you're curious). Ultimately, that's what Bitcoin vs. Fiat comes down to - do you accept that others can diddle your fraction of the monetary base, and its economic rules or not? In a recent discussion about Eulora game mechanics with chetty and asciilifeform over coffee in Buenos Aires, the engineer responsible for implementing Eulora explained that Eulora (like Bitcoin) is designed not as an economy that will forever be buffed and handicapped in order to maintain balance in the same fasion that other modern game designers go about their work (as, understandably, they've learned from the communists who control the issuance of currency and the subsidy of industry in America, EU, Argentina et al), but will operate as a conservative system (a physical construct that should be familiar from your kindergarten classes).

6

Seriously - have you ever tried to pull 20K in cash out of a US bank? No, because a) you don't have that and b) you'll get shipped off to the gulag instantly as there's no good reason to have that much cash on you unless you're a filthy drug-dealing criminal. The whole thing reeks of the idiot arguments against strong cryptography (which seem to have died down of late): "good people have nothing to hide!", now rehashed as "good people have no need of cash, or to perform transactions without the permission of the state!".

7

That is to say, facism.

8

Derps like Luke-JR insist on pushing their particular braindamage in terms of blocking dust, and other "nonstandard" transactions. This has not stood, and will not stand. For instance, their attempts to enumerate badness failed to catch "transaction malleability" (which is still not actually a thing, as the signatures verify and that is the only criteria that matters), and note also that the early malleability fixes were just to relay rules, and didn't touch block inclusion at all. Why? Because bitcoin's fucking finicky, diddling inclusion rules is just about as dangerous as things get, and nobody trusts them to do it correctly.

9

If this particular bug/regression/implicit version pinning in the Bitcoin/OpenSSL dependency graph doesn't make you shit your pants, you're not paying close enough attention.

10

Although if you can't afford big gigs of storage, you have no business using Bitcoin.

11

For example, during the block downloading process, peers to which a syncing node are connected routinely provide blocks with no ancestry, that the syncing node must then hold in memory, hoping against hope that it will eventually find the complete ancestry for those blocks and then be able to stitch them into its chain. Further, a syncing node simply connects to a node to which it has previously connected (selected, as far as I can tell, arbitrarily from the list of nodes it knows about), and then hoovers up blocks as fast as it can. Nowhere does the codbase make any provision for ranking the speed at which its peers provide blocks, or number of what La Serenissima's hackers have come to term "bastard blocks" that come from any given node. It literally has no notion of peer quality.

12

You can tell the space is constituted of nerds, as they want to think of a force of nature (eg Bitcoin) as having features. In that sense, I suppose that a hurricane has the feature of knocking down pressed shitboard houses and costing the idiots who insured them piles of money.

13

Hodl!

14

Does that not scream inflation to you?

15

This is actually the funniest part of La Serenissima spending all of its time in a channel called #bitcoin-assets.

16

The other, larger, looming elephant of a reason in the room why this angle of attack to get "us" to "do things" doesn't work is that Bitcoin is here to destroy everything the fiat agencies hold near and dear to their hearts. It's here to put an end to the government (mis-)allocation of capital to failed banks and the endless handouts to preferred groups to name simply two things that Bitcoin by virtue of simply existing will put an end to. The fiat agencies simply cannot stop printing money now that they're in the habit of it, and regardless of whether it's this particular business cycle or the next or the one after that, the cheap credit to which our governments are addicted and endless cycles of printing that support said credit will necessarily turn a single Bitcoin into a fair price for a used nuclear sub.

17

Not that I have any…

18

Only half kidding here. The startup funding hustle is insaaaaane!

19

The value prop here of course being 21 million coins, uninterdictable transactions, and unfreezable assets. The end users being…people for whom these things are a concern. If they're not a concern to you, and you find yourself inventing ways to change bitcoin in order to satisfy your notions about what it should do, you should reconsider whether or not you're the market best fit for this product, to borrow some terminology from startuplandia.

20

Granted, today it's less than 50GB, but there's a linear relationship between time and the size of the blockchain. You understand the implications of this, right? As time goes to infinity, the blockchain size will also go to infinity. A side note that comes out of this, serving to put additional holes in Gavin Andresen's block size increase plan is that we have a known relationship between time and blockchain size right now. If Gavin and the fiat agencies win and implement a strategy of continual block size increases, we will lose this hard constraint on the relationship between time and the amount of space required to maintain a blockchain. What would the fiat agencies love more than to make it nigh-impossible to actually operate a bitcoin node as an individual, or to force individuals just getting into the game to use their braindamaged and easily suborned softwares?

21

Yeah, there's a logline link for this one, but I'm on a plane and it'll have to suffice to note that this an abridgement of an MP statement.

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