Philip Sheldrake

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Tag: ethereum

Why decentralization needs more than cryptonetworks – the Internetome

Aldous Huxley (1937) regarded the decentralization of industry and government necessary for a better society. Norbert Wiener’s insights (1950) into the dynamics and ethics of humans and large computer systems hinted at the advantages. Marshall McLuhan (1962) anticipated a shift from the centralized mechanical age to the decentralized electronic age, coining the term global village as shorthand for such a welcome outcome. E.F. Schumacher (1973) considered decentralization allied with freedom and one of “the truths revealed by nature’s living processes”. Steven Levy’s hacker ethic (1984) includes the tenet “mistrust authority – promote decentralization”. And Nicholas Negroponte (1995) regards decentralization as one of the four cardinal virtues of the information society (alongside globalization, harmonization and empowerment).

When centralization is mediated by an organization, governmental or corporate, its best interests must be aligned perfectly and continuously with the parties subject to its gravity in the mediating context – otherwise decentralization must be preferred to avoid the appropriation and erosion of those parties' valuable agency. Importantly, decentralization demands decentralization at every level without exception for any exception would be centralization. By definition.

This post aims to scope the challenge that still lies ahead to secure decentralization even with the rise and rise of cryptonetworks such as Ethereum. For more information about decentralization in general and why it's important, see Decentralization – a deep cause of causes you care about deeply, written for the World Wide Web Foundation.

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Lightning – cryptocurrency and the Internet of Things

lightning

Bitcoin is an experiment. That's granted. The fact that it's trusted and actually useful is nothing short of phenomenal. Last week for example, the trade volume amounted to US$229m.

Nevertheless, Bitcoin has some fundamental constraints that keep it from going mainstream: it has a ballpark limit of 7 transactions per second, and having confidence that a transaction has 'gone through' – non-recourse transactions – takes roughly 20 to 60 minutes depending on the level of confidence you're looking for. (The user experience sucks too, but that's not for this post.)

While 229 million dollars is no small chunk of change, Visa processes many thousands of transactions per second, peaking at tens of thousands, and will have processed around US$130 billion last week.

State channel – more exciting than it sounds

The crypto awesome sauce underpinning Bitcoin is known as the blockchain, perhaps the No.1 tech buzzword of recent times. It's at the heart of the currency's success – preventing users spending the same money twice – but is also the nub of its relatively slothful nature. It's with a fair degree of excitement then that I've been tracking the progress of Lightning, a protocol first mooted to my knowledge in 2013.

The jargon here is state channel – blockchain interactions that could occur on the blockchain but get conducted off-chain without impairing the trust parties have in the interaction. Lightning facilitates state channel to speed things up and attenuate the costs needed to prove transactions (and offers a little more spark in terms of brand appeal!) Read more

The blockchain is coming your way

Bitcoin index 21 July 2014

Bitcoin is the most famous cryptocurrency with the highest capitalization. As you can see from this screenshot from the "block reader" blockr, the capitalization at the time of writing is over eight billion dollars. According to citations of an IMF report on Wikipedia, that places it just above Moldova's GDP.

This post isn't about bitcoin but the cryptographic foundation of Bitcoin. (The community prefers to capitalize the word when referring to the system, and lower case when referring to the currency.) This post doesn't explain Bitcoin or the blockchain in detail – I recommend this series of presentations courtesy of the Khan Academy for those who want to learn more – but rather it's about the technology's wider application and its emergence and growth beyond the early adopters.

Get this into your block

So why am I interested in Bitcoin specifically, and its blockchain foundation more broadly? What does this have to do with social business?

We are contemplating blockchain platforms to enable decentralized consensus in the not too distant future, allowing us to codify, decentralize, secure and trade many things that historically have demanded some centralized facility. This is akin to the bitcoin currency functioning without the need for a central bank, and the vista includes voting, domain names, financial exchanges, crowd funding, organizational governance, intellectual property, contracts and agreements of most kinds. The landscape even extends to so-called smart property with appropriate hardware integration.

Sometimes I wish I was more of a wordsmith, but this word will have to suffice – wowzers! Read more