It’s a great feeling to understand what problem Satoshi solved. To understand the spark that led to the implementation of Bitcoin. That missing link that took so long to figure out. To solve the impossible problem.
In mathematics or network theory there is a question called the Byzantine General’s Problem. A version of it goes like this: There are five Byzantine armies that are surrounding a Bulgarian stronghold. The general at one of the camps want to order all Byzantine armies to attack at the same time. How can the general get the word out, and know that all armies will follow the same instructions? How can the armies know the other armies will follow the same instructions? How can the Byzantines do this with the Bulgarians sending their own messages to the Byzantine armies? If they attack in a coordinated way they will win, but if they are disorganized then each army will meet its own demise.
Satoshi Nakomoto—the anonymous coder or group of coders that created Bitcoin—is credited with solving this problem. Satoshi’s solution is that any Byzantine general publish their attack time along with the solution of a problem using the attack time that takes some time to solve. The other armies then encode the attack time and publish a solution of a problem using the encoded time. Then the armies encode the encoding of the attack time and publish a solution of a problem with the encoding of the encoding. This forms a chain of encodings each taking some time to establish the next step. After some time, the Byzantines will attack with at the time that have the longest chain attached.
When the Byzantines attack with this method as long as the Byzantines publish their plans first there is a low chance that the Bulgarians will ever be able to catch up and create a longer chain. After some time, it’s almost impossible that the Byzantine armies will attack at different times. Each step in the chain increases the certainty that all Byzantines will attack at the same time.
The first application of this was indeed Bitcoin. In this application the goal was not to agree on a time to attack, but rather the state of a distributed ledger. Each block has all the transactions that change the state of the ledger. As a new block gets published it contains an encoding of the previous block. With each block the transactions before it become more certain to stay on the longest chain. As time goes by, it’s almost impossible to create a longer chain than the one already ahead of a transaction, and we can be certain of the state of the ledger.
Wikileaks reveals the CIA is just as evil as you thought they were. Quantum computers are not far away at IBM. NASDAQ compares Bitcoin to gold and government-issued currency. People’s Bank of China doublespeak on Bitcoin regulations. Bitcoin transaction fees are causing the crypto to lose support and vendors. Many Bitcoin addresses have less BTC than the fees needed to move it. Darren talks about soft forks, hard forks, and sporks. DASH remains strong and the DDoS on DASH Masternodes may just be a badge of honor. China has first trade deficit in three years. Randy mentions Louis CK’s show “Horace and Pete” because it made him weep and Louis CK accepts Bitcoin.
All this and more on the Neocash Radio podcast, episode 197 — Wednesday, March 8th, 2017!
We’ve written out short overviews of the topics discussed on today’s show below! Be sure to listen in to the whole podcast to get more information, insights, and thoughts on each of them from JJ, Darren, and Randy!
Stream this podcast episode:
or Direct Download the podcast as an MP3 – Neocash Radio episode 197
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|Traditional Financial Markets
||Bitcoin (BTC) $1,161
||Ethereum (ETH) $17.01
|Dow Jones 20,855 points
||Zcash (ZEC) $35.26
|30Y UST Yield 3.151%
||Monero (XMR) $12.67
Continue reading Ep197: Wikileaks CIA Hacking Tools, Bitcoin Loses Vendors, DASH Masternodes DDoS Attack
Iceland votes for more pirates! Encrypted communication app Signal has nothing to share with the FBI. New York wants to tell you how you can use your spare rooms. The Department of Health and Human Services is stealing according to the Government Accountability Office. Zcash launches with a bang. Zero-knowledge proofs and Ethereum. Cell411 beats Arcade city with a free, decentralized, ridesharing app… and what you should know about the Arcade City Token sale. Bitcoin version 0.13.1 Seg-wit is awaiting the signal.
All this and more on Neocash Radio episode 180 here on Wednesday November 2nd, 2016!
We’ve written out short overviews of the topics discussed on today’s show below, along with time markers for each segment! Be sure to listen in to the whole podcast to get more information, insights, and thoughts on each of them from JJ, Darren, and Randy!
Stream this episode:
or Direct Download the MP3 – Neocash Radio Episode 180
Tune in to Neocash Radio every Wednesday night and
RETWEET ALL THE THINGS @NeocashRadio!
Subscribe to Neocash Radio
on iTunes / Soundcloud / Stitcher / YouTube and Google Play Music!
We’re also on Tunein, Player.FM, Overcast.FM, Podcast Addict, Blubrry, and more!
||Bitcoin (BTC) $733
||Litecoin (LTC) $4.06
||Ethereum (ETH) $10.97
|Dow Jones 17,959 points
|30Y UST Yield 2.565%
||Monero (XMR) $4.70
|Euro (EUR) $1.11
|Chinese Yuan (CNY) $0.148
|British Pound (GBP) $1.23
||1 Doge = 1 Doge
Continue reading Ep180: All Eyes on Zcash Launch, Obama Administration Steals $5 Billion, Cell411 beats Arcade City
Yesterday I had the pleasure of attending the ethereum meetup in Boston. There were a range of people there. There was a recent MBA, coders, former coders, and entrepreneurs. People attending would seem to be smart, and inquisitive. Ready to learn new things. Like myself, many people attended without having a full grasp on Ethereum’s implications. We all seemed to know different aspects of the topic so I believe the interaction was very productive for all.
The brains behind the project
One topic of discussion was speculation that Neal Koblitz and Nick Szabo are involved with ethereum. You may know that Neal Koblitz is the same Koblitz that the elliptic curve used in bitcoin is named after. The idea of a smart contract originated with Nick Szabo. It was suggested that there is a who’s who of cryptography, finance, and other subjects working on ethereum. My initial investigations into these claims verifies that Neal Koblitz and Ralph Merkle of Merkle trees are advisors to the ethereum project.
Proof of stake
There was discussion around Vitalik who is currently not sure if ethereum will implement proof of stake. Neocash Radio listeners may recall that proof of stake is when the proof of ownership is used to mine a block. The longer your coins have not been spent, the more stake you are considered to have. Proof of stake mining creates a different type of economy where ownership of coins can mean that more are issued to you. If proof of stake is implemented in ethereum then the initial purchase of ether would perhaps be more valuable as the ether will also be needed to mine. Proof of stake is implemented in peercoin. A economically opposite feature was implemented in freicoin.
Wow that’s AMAZING! What is it?
What surprised me is that many people at the meetup were still trying to figure out ethereum. This was the fourth meetup. I thought I was showing up late to the party. Apparently, there is still a lot to learn and understand. It felt like I was one of those blind people explaining what the elephant looks like, while other people were doing the same with other parts of the elephant. All and all, I learned. I would recommend that anyone with a curiosity attend one of these meetups. There was a real sense of being on the cusp of a revolution. Not a gunpowder and cannon revolution, something more along the lines of the industrial revolution.
Challenges and unanswered questions
I came with questions and I left with questions. I am concerned about how the decentralized network will process all of this information on a global scale. Right now bitcoin can only process 7 transactions a second. Contracts will be more demanding. Will the ethereum network be able to process all contracts that are thrown at it? How will it scale? I know that Vitalik has considered this problem, but I have not parsed the solution just yet. There are economic decisions that are being made that also raise concerns. The price of computations and fees are necessary to stop a denial of service attack and other reasons. The concern is that the prices need to be right ahead of time. If the price is too high then people won’t use ethereum. If the price is too low then the network could grind to a halt with too much activity. Also remember that the price is set in ether, a unit with no historical precedence. Hopefully all the good brains working on the project can effectively solve these issues.