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Bitcoin Cypherpunk

Blockchain Is The New Corporation

Do corporations need humans to survive? Increasingly the answer is “no”.

Corporations, as we have seen, are devoting a larger share of capital to automation technologies within businesses across almost every type of industry. Technological innovation, both by way of employee input and customer’s expected output, is undergoing a transformation. With blockchain technology, this is an organizational change that reassigns the role of the employee and customer outside the responsibility of human control. Blockchain technology stands to radically transform our concept of the corporation where machines, not humans, are both the customers and employees.

Decentralized Autonomous Organizations

The World Economic Forum estimates that by 2027, 10% of global GDP will be stored on a blockchain network. In such a world, it will be clear that corporations are less reliant than ever upon humans to survive and prosper. Blockchain technology is the blueprint for a type of corporation that is light-years ahead of its 20th century predecessor in terms of resource allocation and communication methods.

20th century business models were characterized by ownership rather than access, and centralized over decentralized decision making. The bitcoin blockchain economic model does away with all these conventional notions and provides us a non-exclusive, decentralized, autonomous corporation. This type of corporate model is fundamentally different in its function because, among other things, it is independent of human intervention while simultaneously owned by no single party.

In the bitcoin economy, machines are the employees rather than as humans were in the industrial age. The role of the employee, and the producer of labour, is occupied by network miner. In terms of the bitcoin mining function, the product of labour would be the hashing power necessary to solve the next block of transactions. The compensation for each employee? The network pays each node equal to the current block reward every time the miner finds a solution.

The corporate nucleus has evolved beyond human function.

When we come to understand this shift in the makeup of the corporation, we see that the core of its function has undergone a significant change. The blockchain network concept is such an altering framework for conducting business, that it shakes the very foundations of what we believe to be a legitimate corporation. Truly, the blockchain represents a milestone in technology innovation.

Employees are now considered machines in the information age rather than as humans were in the industrial era. Further, customers are now humans, but soon to be machines as well with the implementation of self-executing smart contracts.

Uncheatable Smart Contracts

Networks of smart contracts have empirical objectives. That is, they’re functionality will be understood through examination of the source code which it operates by. As it applies to smart contracting systems of the future, open-source systems make for an entirely transparent and uncheatable form of governance. The instances of misuse will come from failing to understand the objectives of the contract or network.

It is crucial that we note the computing revolution is well past an inflection point. When such technologies first began being used in universities and large organizations, they were under the control of many, many humans who all shared one machine. With bitcoin, we have one large, interconnected computer network which controls many, many human counterparts. More importantly, it administers one of the most precious aspects of our lives: financial livelihood.

An exact reversal of how the computing revolution began is characterized by an inflection point of control which has recently passed. First we shape our tools, thereafter our tools shape us.

Once the machine thinking method has started, it would not take long to outstrip our feeble powers. … At some stage therefore we should have to expect the machines to take control ….

– Alan Turing, Intelligent Machinery, A Heretical Theory, 1951

Networked Machines

You can be certain that, just as one computer would work for many humans in times past, many humans will come to work for one main network of machines. Computer technology is capable of achieving this dominance because it rewrites the laws of society with something based on mathematics and science rather than steel and paper.

The blueprint of blockchain technology represents an important milestone in computing innovation – one which allows digital systems, whether they be for commerce or communication, to operate independently from conventional forms of law.

As is with the current landscape of bitcoin today, the miners are the employees of the corporation. Mere years ahead however, lies a paradigm where smart contracting begins to populate the role of customer as well.

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Bitcoin Cypherpunk

Bitcoin Has Redefined Money

Bitcoin is a digital phenomenon that will continue to spread until it is as socially accepted as email is today. In this post, I will explain not only why this rapidly expanding computer network has changed the paradigm on what defines money, but why the blockchain represents a historical image of the digital economy and provides a record of any past activity due to the nature of peer-to-peer timestamp verification.

The Blockchain Is A Monetary Image

For the purposes of illustrating why bitcoin has redefined money, let us assume there exists two users on a blockchain – User A and User B. User A controls 3.0 million bitcoin on the entire network. User B controls 3.6 million. There also exists 14.4 million unmined bitcoin.

User A has used their private key to authorize a transaction to User B worth 1.8 million bitcoin. User A sends this amount to User B’s public key. At this point, the transaction has been authorized by User A and is in the process of being confirmed by miners of the network.

After the transaction has been confirmed, the bitcoin network now reflects the change in hands of the 1.8 million bitcoin User A sent User B.

Note that no currency has moved from point A to point B, but an authorization on behalf of User A to alter the network in a way which increases User B’s control of the blockchain by a measurement of 1.8 million bitcoin at the expense of User A. In bitcoin, this ledger payment system is the money supply and is radically different from any type of money we have previously seen.

When an individual makes a transaction on the bitcoin network, no actual currency is moved. That is – no file has moved. No commodity or asset has moved. No private or public key has moved. Rather, the only thing which changes is the percentage of the blockchain ledger which User A & B claim control over. When a transaction occurs in the realm of bitcoin, the image of the blockchain is altered. Nothing ever changes but the composition of this blockchain record.

The blockchain is a historical record of the bitcoin economy. There is no separation to be made between the blockchain and bitcoin. They are one in the same. Without the blockchain, you have no bitcoin ecosystem. Without an accompanying cryptocurrency, you have no measuring tool to determine the ownership of the blockchain.

Money is now an image, rather than something which can be separated from the system itself. This image of money is being constructed, altered, and verified by the thousands of machines acting as miners across the globe, and it’s a composition on public display for all to see. The miners are the painters of this network composition. The users, the brush and strokes.

In the bitcoin digital economy, money is an image continuously being constructed, verified, and reattributed by way of cryptographic authorization.

“Tangible money, old-fashioned money … is a phantom from the past, an anachronism. In its place is an entirely new form of money based not on metal or paper, but on technology, mathematics, and science. This new ‘megabyte’ money is creating a new and different world wherever it proceeds. Money now is an image.”

– Joel Kurtzman, The Death of Money

With the intrinsically valuable property of decentralization, we have a monetary system that comprises a historical record of purchasing power at any point of time in existence. The timestamping function of the blockchain allows anyone to go back and publicly determine the holdings of any address (perhaps soon any individual).

A payment conducted with bitcoin represents a paradigm shift in our concept of money – one where there is no division between currency and the system through which it flows.

Bitcoin has redefined money. Money is now an image.

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Cypherpunk Ethereum

How The Ethereum Virtual Machine Could Run The World

Since the beginning of 2016, anyone with a pulse on the digital currency industry has watched with bated breath the smart contracting platform Ethereum rise to meteoric highs. As a relatively new development utilizing bitcoin technology, Ethereum aims to implement a globally decentralized, digital computer for executing peer-to-peer contracts. Such an innovation could eliminate censorship, fraud, and the role of the third party in online collaboration.

Unlocking The Ethereum Virtual Machine

By taking the cryptographic payment structure of bitcoin and adding a Turing complete scripting language, Ethereum is attempting to create the most viable tool for executing smart contracts using blockchain technology. The term Turing complete here means a system capable of performing any logical step of the computational function. A technology in wide use today which employs Turing completeness is JavaScript, the programming language which powers the worldwide web.

Smart contract technology would describe a computer protocol which obviates the need for a contractual clause and instead is self-executing and self-enforcing.

What differentiates Ethereum from bitcoin is that it doesn’t stand first to be a payment system, but rather a computing platform. The cryptocurrency of Ethereum, ether, acts as a sort of fuel to power the engine of this computing platform. Ether is consumed by miners for accessing resources of the network. The more ether a user holds, the more “gas” they can pump into the computational engine of the Ethereum virtual machine.

This combination of cryptographic architecture and Turing completeness, could enable entirely new industries to spawn, where traditional business models occupying the role of middleman, will increasingly feel the pressure to innovate or die.

Ethereum is a world computer you can’t shut down and you can’t turn off.

Autonomous Corporations

One of the defining features of the 21st century corporation is populating the role of the employee with machines rather than humans. Bitcoin is one of the first models of such a corporation. The miners of the bitcoin network can be seen as employees rather than as humans were in the traditional corporate model.

Ethereum takes this development one step further.

Interestingly, the role of the customer (which is currently populated by humans) stands to be dominated by machine function as smart contracting systems enable end-to-end payments without requiring a human initiator. What Ethereum will help facilitate is an economy of interconnected devices where machines can transmit money and data in a manner which dwarfs the efficiency of human input. Businesses which overlook this trend, will pay dearly due to new supply channels which disintermediate the old world’s necessary third parties.

Ethereum today is where bitcoin was in 2010 – raw infrastructure, lack of developers, and plenty of skeptics. Competitors, such as Rootstock, add legitimacy to the use case Ethereum is attempting to bring to market.

From trustless crowdsales to democratic organizations, smart contracting platforms could unlock a new frontier in internet enabled innovation.

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Bitcoin Cypherpunk

Don’t Let Anyone Tell You the Identity of Satoshi Nakamoto Does Not Matter

The world’s first trillionaire by USD valuation could quite possibly be the creator of bitcoin, Satoshi Nakamoto. If bitcoin continues to climb the ladder of exponential price appreciation, than once Nakamoto decides to move their money and make transactions with it, there will be a seismic shift in the perceived supply of money.

In the numerous attempts to lift the veil of bitcoin’s mysterious inventor, people have gotten hurt. Homes have been raided. Journalists have been ostracized. Following these chaotic rumours however, seems to be a cultish mantra echoing from the chambers of bitcoin’s disillusioned – that “the identity of Satoshi Nakamoto does not matter.”

This is not only terribly untrue, but dangerous. Naive to the nature of the emerging bitcoin digital economy, the disillusioned will claim that the identity of Satoshi Nakamoto does not matter because the software is open source. Anyone can read the source code of bitcoin. Anyone can identify vulnerability in the protocol’s architecture. Anyone can fork it and create their own implementation. This is well known of bitcoin, and it is not the reason its creator’s identity still holds crucial importance.

The 21st Million

The Nakamoto wallets comprise roughly 5.5% of the total bitcoin which will ever be in circulation and about 9.3% which are available today. If there is one party controlling five percent of all currency that will ever be created in an economy, this poses a huge risk to the integrity of decentralization. One in ten bitcoin today lies dormant, but alive. Truly, the mammoth wallets owned by Satoshi Nakamoto are one of the biggest threats to price stability and the principle of decentralization of bitcoin.

In a world where we rage about the centralization of our current economic circumstances, it is plain to see that bitcoin may not be as different as it initially seems.

Satoshi Nakamoto Wallets

Almost all are owned by a single entity, and that entity began mining right from block 1 with the same performance as the genesis block. It can be identified by constant slope segments that occasionally restart. Also this entity is the only entity that has shown complete trust in bitcoin since it hasn’t spent any coins (as last as the eye can see). I estimate at eyesight that Satoshi fortune is around 1M Bitcoin. – Sergio Demian Lerner

World’s First Trillionaire

At this point, not much can be done about the large volume of bitcoin that lie hidden in Nakamoto’s wallets. We don’t know which addresses they belong to and we only have estimates of the amount they hold. What we do know is that Nakamoto has multiple wallets rather than one, and that they have since discontinued their mining activities.

Will the Nakamoto funds ever move? Or have they already been purposefully destroyed? If Nakamoto were to take such a route, it might cause a bullish run on the rest of the bitcoin in circulation because of increased scarcity.

Lost coins only make everyone else’s coins worth slightly more.  Think of it as a donation to everyone. – Satoshi Nakamoto

If bitcoin should continue to challenge the status quo, it is indeed worthwhile to ask the types of questions which would uncover the identity of a party which controls the largest stake in an emerging economy. Satoshi has no obligation to reveal their identity, yet if bitcoin should become worth 10 or 100 times its current value, questions about their identity may haunt those who are deeply invested in this emerging digital economy, both in terms of financial and ideological investment.

Money has a profound way of influencing people. Business leaders recognize the opportunity to shake up the world that comes with owning massive capital. When it comes down to it, the effect bitcoin has on the world may correlate sharply with the causes Nakamoto dedicates their purchasing power to, if they do eventually move their money. Nakamoto can either use that ability to power the common good, or for less noble reasons. The causes this money is dedicated to will forever forge the legacy of the great anonymous wizard Satoshi Nakamoto.

Regardless, don’t let anyone tell you the identity of Satoshi Nakamoto does not matter.