Cryptonetworks and why tokens are fundamental
nickgrossman.is
nickgrossman.is
'imagine if you could fork Amazon and launch a direct competitor'
..you've lost me. Amazon is not a code base. It has over 500,000 employees who work hard to serve its customers. How do you fork that?
I would offer another, better example but I can't think of one. Web 2.0 companies are so far ahead that web 3.0 is going to have to come up with something completely different to be commercially interesting.
Web 1.0 (e.g. e-mail, http, et cetera) was more de-centralised than any token-based company I see today.
The other is crypto mining and crypto currency.
> This argument is absurb [sic].
Your entire argument here is indeed absurd, as demonstrated in this thread.
It is valuable if we ever reach a point where say, AWS has a monopoly on all compute power, and starts making bad/unfair/predatory decisions that hurt customers.
Otherwise running decentralized payment networks to exchange compute power is much less efficient and much more costly than relying on purchasing services directly from a few competing (read: non-colluding) service providers using USD, GBP, EUR, credit cards, etc.
There's really no need to decentralize compute-as-a-service. This person is getting paid to talk their book because their employer has placed a lot of bets in the cryptocurrency/blockchain world and is trying to brainstorm ways to turn them into actual viable products and exit these investments.
Blockchains / decentralized ledgers are almost always solutions looking for a problem. They solve the very niche issue of exchange between untrusted parties, with caveats, and with extra performance/cost added to a centralized solution.
There's currently no reason to implement a decentralized ledger solution for exchanging compute-as-a-service.
Or... we could use intermediate libraries that translated our desires into whatever backends were currently cheap or fashionable, thus making it relatively easy to deploy across multiple infrastructure companies and just possibly preventing this monopoly from happening in the first place.
I encourage my competitors to code directly for Amazon APIs, though. I'm sure it gives them a performance advantage.
At least with applications like storage you can encrypt your data. AFAIK homomorphic encryption isn't general or efficient enough to be very useful yet.
Here's another example. Peepeth.com is creating a decentralized twitter, with IPFS for storage and indexing on the Ethereum blockchain. Since all that storage is open and public, the creater of peepeth.com is trying to build a business based on his front-end. People can freely create alternate front-ends or apps, and leverage the existing open database of tweets without being limited by Twitter's policy whims regarding its API.
That's a big problem for me, many cryptocurrency/blockchain projects (IOTA, filecoin, the lightning network, basically every ICO ever) are basically saying "sure, this is barely usable as it is, but in the future YOU'LL SEE!"
Given the ridiculous amount of investment in the blockchain/cryptocurrency space these past years how long do we have to wait until we see the actual results? I remember when I first used Google Search all those years ago my first reaction was "uh, that's a weird name", my 2nd reaction was "damn, that's so much better than the search engines I've used so far". How long until we reach this stage with blockchain apps? How many years, how many billions of dollars? I'm not asking for a polished product, just something that makes me think "that's actually better than what I've used before".
>Peepeth.com is creating a decentralized twitter, with IPFS for storage and indexing on the Ethereum blockchain.
Remember Usenet? Remember email? Remember IRC? I think there's a false dichotomy in the mind of many nowadays, mainly that the internet is either centralized or "blockchain based", whatever that means. It's a lie. The internet is fundamentally decentralized, the centralization is a relatively new phenomenon that started in the early '00s.
You want to "fix" the internet? Get people to use IPv6, not the Blockchain.
This kind of thing is obviously extremely hard to say without any sort of accuracy, but my best guess, within a year or two. Specifically, you will start to see scaling solutions finally launch (lightning network, the numerous ETH initiatives, etc.), and you will start to see some dapps gain actual usage or traction (DEXs, collectibles, etc.).
>> "It's a lie. The internet is fundamentally decentralized, the centralization is a relatively new phenomenon that started in the early '00s."
Yes, obviously there is nothing _technically_ stopping the Internet from being decentralized. But I think what you are missing is the incentive structures and the realities. Here is an interesting post from Chris Dixon arguing that what's unique about cryptocurrencies is that they provide an alternative structure that will encourage decentralized protocols to flourish: https://medium.com/@cdixon/why-decentralization-matters-5e3f.... It's not that Twitter can't be coded to be more decentralized without blockchains. It's that in reality, the economic reality is that such a service eventually closes off its API, bait-and-switching users into their walled garden. Like open source software, cryptocurrencies may be a means of aligning people to work towards a different paradigm.
Oh I assure you that I'm not. The incentive structure is exactly why we ended up with a centralized web. But as with everything else the blockchain has a lot to say on the matter but not much to show for it.
Currently working in blockchain "stuff" is extremely rewarding because of the massive speculation and deflation surrounding it. You can write a relatively mundane 50 pages "whitepaper" and get millions for it. There's no shortage of "free money". But surely that won't last forever, things are bound to stabilize eventually, one way or an other.
So then what do we have? Those "dapps" are open source, the devs don't control the code, they don't control the storage, they don't control the blockchain. They control nothing. Anybody can come and undercut them with zero effort. That's a feature. Google and Facebook control everything, they control the interface, they control the storage, they control the data, they control how you access all of that. Thanks to this they "offer" you the service "for free" (i.e., for your data). How can blockchain devs ever hope to compete with that? By convincing the general population that they should pay for decentralized services instead of using centralized services "for free"? The very thing they've refused to do time and again for the past 15 years at least?
I'm very much unconvinced that the Blockchain has found a solution to this very complicated problem. It's just wishful thinking IMO.
The internet started in the early 90s so you are talking approximately about two thirds of its lifespan hence "new" doesn't really apply.
That's because most "blockchain" apps are no Google. Going with your dotcom analogy, I'm sure most of these are equivalent to pets.com, Yahoo, AOL, etc. which means they will either crash hard or stick around while being marginalized to oblivion by newcomers that have learned from the mistakes and started from scratch (or Bitcoin itself).
And continuing on with Google analogy, this meteoric rise of the hypothetical "Google for blockchain" will happen AFTER the crash of rest of these trash blockchains.
Forking BTC was one thing, because speculators and miners and all. There was bound to be some interest in a second version of BTC because everyone got free money, right?
But forking filecoin? I don't understand how this works. Please explain. Who would be into this, why would they mine a second filecoin? How does the community survive half a dozen forks (and having to specify which fork your precious.jpg is on?)
Filecoin could be forked to improve it, much like BCH has differences in relation to BTC (e.g. maximum block size).
1. Deep philosophical differences (e.g. Bitcoin Cash) or incompatible technical changes.
2. Removing rent-seeking (e.g., if a network/token is successful, but has some sort of greedy/rent-seeking aspect to it, I expect the community will just fork it away to remove that aspect).
3. Governance issues (e.g. if a token is setup such that its run by folks who have either actual or perceived control and those folks start failing to make good technical or other decisions, a competing faction might decide it's easier to fork than to wage war for either actual control or perceived control).
4. Greed (e.g. Bitcoin Platinum; these will generally fail in my view)
>> How does the community survive half a dozen forks (and having to specify which fork your precious.jpg is on?)
How does Linux survive its numerous forks? As to specifying which fork your file is on, why can't there be middleware that makes it easy to support multiple storage networks, just like today?
Let's have some intense ranty debates about which middleware is better for which scenario, and a couple of religious wars about which fork coupled with which middleware is "best".
Meanwhile, S3 just does the thing. It gets called "$3" by intense people who understand exactly why it sucks so bad. But for anyone who needs to store documents on a thing, and have someone to blame if the documents stop being on the thing, it works fine and it's much less fiddly to set up.
Yeah, I get the Linux analogy all too well...
Think about the price you're paying for your Amazon prime subscription or your Visa card. Now think about the amount of complexity these companies have to deal with, handling thousands of third parties that are willing to take advantage of the system if given the chance. Dealing with human error. Dealing with scammers. Think how well it works on average. Now you want to undercut that using slow, inefficient and redundant distributed trustless technology? Good luck.
I could be wrong, but the burden of proof is on the cryptocurrency enthusiasts' shoulders because Amazon and Visa work today while Openbazaar and the Lightning network are still highly experimental.
>If you imagine that it is, then imagine forking it...
Can you imagine if we had 100THz computers? How cool would that be.
> the burden of proof is on the cryptocurrency enthusiasts' shoulders
It feels very unfair to walk into a conversation with an internet stranger who believes that. If you feel so strongly, who am I to try to change your mind?
There's a problem with developers and cs people and that is that they are looking at one small spec - the blockchain data structure. From there, the work their way up through sensationalist headlines and shout "blockchain is crap, it should go away, we don't need more 'money', this whole space with its ico's is a scam!", etc, etc.
But it's not a scam. It should not go away. And, it is the future.
No one I think is debating that the 'blockchain' (I'm referring to the bitcoin data structure here) is slow. Anyone that holds on to that nugget is entirely missing the point and needs to grab their 56k modem and 386 and go hunker down in the closet, because that's their mindset.
Bitcoin (and other tokens) are not valuable because of their slow data structure. They are valuable because, like the article says, they are permissionless and globally distributed (immutability is also key and not mentioned).
If you think that is not important, you are fooling yourself. It's a revolution just as big as webapps were over non-connected desktop apps. Just as mobile was over desktop web apps.
Take my super high level case of 'blockchain' medical company (I use this when I talk to people about why this next wave is important).
Currently today companies own your medical data. If you move from one medical provider to another, in order to get your history over to the new provider, the new guy has to either call or request a fax of that data and then double enter it into their system. Maybe this exchange is automated but I doubt it.
What happens when you leave that company? New company has to go through the same laborious process. And so on and so forth.
This is today's problem: silo'd data 'owned' by various companies out there. The end user/customer has little power because they own nothing. They are at the mercy of that data because companies do not want to share (they want to corner markets and destroy competition) and companies do care enough about securing 'your' data, so thieves then break in and steal it. It's funner for them to build teams, have company parties, tout their prowess and expertise in the press. Securing data and making it interoperable - not very fun or profitable.
What (smart) people are working towards is turning this equation on its head and encrypting and distributing globally all the data. So, instead of using 10 medical companies throughout your life, the potential is to use a distributed system that stores your data in some kind of 'blockchain' (zoom out an think an immutable record of your entire health history) that only you have the full pub/private key(s) to. (Yes, wallets and keys are a potential problem here and we'll have to work more towards making recovery easier. This is a big, deep topic in and of itself.)
This is not far fetched. We already use ssh keys on remote servers where root has the ultimate permissions and then we can add/remove users at will with their own keys and permissions. So, we understand conceptually how to use pub/priv keys with regard to access. It's not a stretch to start figuring out how to apply this to global data and companies and teams have already been doing this.
Of course, the 'old' medical companies would have to use this system as well and they probably will go kicking and screaming since the data to _them_ is not as valuable because they are not in control anymore. But to _you_ it is. It really is _your_ data and you can take it wherever you want over your lifetime.
This is a total paradigm shift of how tech companies will need to operate in the future.
Tokens, blockchains, dlt's, yah, they're all buzzwords. But so are saas, elastic ip's, spa's, and load balancers. There was a time when you didn't need any of those things and now, they're part of everyday life even if you don't know it.
So, hate if you will, but I already know people working on things like this. Tokenization, dlt/blockchain/dag, gloabal pki access, true micro txn's - these are all things already in play and we'll see more and more of them in the coming years.
I like how de-centralisation is a pro until it's versus centralization on a blockchain.
TL; DR If everyone can agree on a single blockchain, everyone can agree on a single data format. That data format agreement is faster, more adaptable, more extensible and more resilient (in not requiring users to keep private keys) than a blockchain.
Screaming blockchain at everything is a new twist on an old mistake: thinking political problems have technical solutions.
> hate if you will
Discarding reasonable criticism as hate is immature. So is arguing "if you think X is not important, you're fooling yourself."
Exactly. If you're looking for a model of personal medical data ownership, DNS would be better.
Various companies that hold your data (registars) and allow you to share with the appropriate parties (zone files), or delegate that ability if you so choose (name servers). If you want to transfer that data to another company, you can (domain transfer).
Furthermore, I question the assumption that immutability is entirely useful for medical records.
I'm not an expert in the area and don't know the nuances as much as I'd like, like I've wondered if there's a way to have 2 keys - so in the case of blackmail, you give a different key than normal, which will work - however then there's a way to trace.
Obviously the best system is having a system of governance that is stable and accountable. The situation to perhaps design for is say tyrannical dictatorships that may rise.
I suppose the most important aspect of git would be redundancy of data, along with perhaps immutable and/or offline archives; evidence may be changed without anyone ever knowing though to check, unless perhaps there were regular (every 5 years?) consistency checks between archives and present-day/online historical data?
Furthermore, doctors are only going to read the most recent entry for any given data point: doctors won't read the entire file, especially in emergency situations.
Emergency situations is an orange if everything else is an apple, so of course there can be protocol and acceptable boundaries for each.
Humans are humans, mistakes can happen - especially that we aren't aware we're making, and therefore bound to make them again. Accountability will lead to necessary learning and improvement.
None of the drivers for why that doesn't happen today are technology caps. It's entirely the perceived (and real) value of data ownership and the lack of desire for universal integration not only from business leadership but also constant 'I know better' ecosystem fragmentation from developers.
Blockchains are just bad and inefficient tech right now and that deserves criticism but the endless naivety of the tech industry thinking that socioeconomic problems can be solved entirely by an implementation of a technology is just infuriating.
Passing data to a thumb drive or a piece of paper is a decentralized strategy but inconvenient one.
I imagine in the future, the doctor in Brazil writes your medical data into his/her local computer. You ask the data and show the QR code or public address in your mobile phone. The doctor sends your data to this QR code or public address. You store this data into the blockchain.
Next year, you go to Singapore and do some medical operation. You pass the data from the blockchain via your mobile phone to the doctor in Singapore.
I guess that is the selling point.
Can this be done with centralized approach? Of course. We can build a Paypal company but for medical records. The problem with that is some countries are reluctant to share the medical data with American company. They, I assume, will trust the algorithm which does not have the bias compared to an American company.
Paypal right now is not supported in Iran. I imagine this is one of the reasons doctors around the world would trust the blockchain compared to an American startup company.
[Edited] If we want to build a platform where Chinese and Americans can collaborate on sensitive data, blockchain could be the answer. You don't expect Chinese to trust an American startup company or vice versa. [/Edited]
This is my hypothesis.
As for out of space, that's a valid concern. But the blockchain itself can store almost nothing - a few bytes per transaction at most. So you'll have to store the data somewhere else anyway, and only point to it using the blockain. And therefore, the question returns: why not store that pointer in the phone itself?
There are already several international standards on the interchange of medical records. There are some limits on requesting your own medical records (for apparently good reasons) but basically the system you describe already exists, minus the need for blockchain (which apparently is more "convenient" than a thumb drive... how?) outside the USA.
Also, the problem with Chinese-Americans collaborating on sensitive data is that they don't want to, not that they don't have a suitable format for data interchange.
Again, solution chasing problem... as always with blockchain...
There's this very naieve view that blockchains are somehow going to replace governments. I think a lot of people are in for a very rude awakening. The government, as they say, are the guys with the guns. It highly unlikely that they will surrender enormous power and privilege to decentralized networks. When it comes to currency, capital formation, medicine, energy, defense and transportation the governments will step in to ensure they remain firmly in control. These are political "core competencies" that no government in their right mind will abrogate.
This is what makes all these blockchain delusions about a blockchain of medical records so stupid and pointless. If there were such a blockchain it would be controlled by the government in which case you wouldn't need a blockchain at all as everything could be done much faster, cheaper and more securely using a centralized, government-controlled database. I mean, really? Do people not see this?
And the idea of "forking" Google or Amazon is so hilariously dumb all I can do cringe that somebody seriously wrote that and put their name behind it.
It's clear now that many of these blockchain advocates don't really understand where the blockchain is actually useful. There actually is a class of problems that require global, decentralized, democratic consensus and are not susceptible to economies of scale but are susceptible to network effects. (I say democratic consensus here because this idea that blockchains are "trustless" is nonsense. Every blockchain is a democracy and democracy requires enormous trust. As we've seen again and again if the majority of nodes vote one way you have no choice but to follow or lose all your assets. Blockchains do not fulfill this libertarian fantasy of freedom from democracy.) This class of problems does not overlap with what governments at all. But it does overlap almost 100% with those problems that the internet has already solved so successfully. Particularly investors like USV should be looking at their previous tech investments -- Twitter, blogging, open source companies, digital collaboration, content generation, messaging -- and thinking about how blockchains could help these problems. TLDR: the blockchains aren't anything new. They're global, decentralized networks that let millions of people communicate and coordinate in real-time. Just like the internet itself.
What happens when a French citizens moves to another country? Some people even live a few months every year on different countries, what happens then?
Is there a workable solution? I don't have any experience with the French system, but between the two EU countries I know, there's no good solution, or at least none was offered by doctors on either side.
Personal example : I migrated (legally) from the UK to the USA 20 years ago. USA wants you to prove that you have vaccinations. However they don't actually take UK medical records as proof. Easier to just make everyone have the vaccinations again!
That France has some software that works well for their small corner of the world with their specific centralized model of healthcare is great for them, but doesn't solve the same problem. And it certainly doesn't mean you could necessarily apply it to the US, even if there was political will to do so.
Saying "solve it with regulation" is no more helpful than saying "solve it with blockchain". A working solution is better than something "better" that is theoretical.
I don't think this is the case. Many here find these systems genuinely fascinating. The pitches that get sharp rebuke are:
1. Tokens shouldn't be regulated; and
2. You should buy my token.
It is unfortunate that the bulk of statements regarding cryptocurrencies are 1 (as is this article) or 2.
There is a strong scammy undercurrent to cryptocurrencies which simply didn't exist for many other technologies at comparable stages in their development. (There was vaporware, and there were scams. But the latter wasn't nearly as prevalent.)
Your "global" solution. Isn't.
And in most socialised healthcare systems you can obtain your medical records in a format that other healthcare systems can read.
Until one wins, why is it a problem to try to solve the problem one way but not the other?
I've got some interesting ideas similar I want to explore, but quite hesitant its realistic, aren't you scared that encrypting data isn't enough? If you store medical records on IPFS, isn't there nothing stopping someone from copying this data locally, and in 50, 80 or 100 years, couldn't this person break the encryption with latest techniques?
The most important part is that I MAY use this type of service, I'm not required too. The current state of ID I'm required to use a service to protect my "private keys".
This was broadly seen as a self-serving pitch, as Matt Levine comically noted:
“I am sympathetic to the idea that some innovation should be allowed in initial coin offerings, and that the fact that ICO tokens definitely seem like ‘securities’ under existing precedent doesn't necessarily mean that the best policy approach is to subject them to all of our existing securities laws. The optimistic view of ICOs is that they enable a genuinely new way to fund and create ownerless networks, and in this age of overly powerful owned networks, that is something worth exploring and encouraging. But you do have to start from a place of honesty: ‘These are probably securities, so what do we do about it’ rather than ‘hahaha what there is no speculation in the ICO market, what are you even talking about?’ [2]”
[1] https://www.wsj.com/articles/cryptocurrency-firms-investors-...
[2] https://www.bloomberg.com/view/articles/2018-04-20/being-sho...
There is a coherent, rationale analysis that certain tokens, once live, are “utility tokens” that should not be considered securities. For example, USV has invested in Filecoin, a distributed data storage network. Given the network is not live, this was sold via a SAFT (simple agreement for a future token) to accredited investors only, with the tokens to be delivered once the network is launched. At that point, since the tokens are used to pay for storage, is the token a security or a utility token? Reasonable arguments can be made for the latter, and regulatory clarity to that affect would be extremely helpful to this developing space. It’s great that these VCs are working with regulators to explain and advocate for positions that are helpful to the crypto community. They are NOT, I’d sure, arguing that any company should be able to ICO freely.
Filecoin ran an exceptionally-compliant process. That said, it's not obvious that even their token will not be a security.
SAFTs are self-admitted securities. (One can think of them as deliverable forwards.) There aren't many securities in the wild that convert into non-securities for the simple reason that they were bought for investment purposes, and so anything they become traces to that desire.
So even in the case of the exception, we need to wait for the SAFT to convert and see if that token does what every other token so far has done: die or "moon" as a speculative investment vehicle.
> They are NOT, I’d [sic] sure, arguing that any company should be able to ICO freely
"The group wanted formal assurance from regulators that their products would be exempt from SEC oversight" sounds like that [1]. They asked for too much, too soon; this presentation is part of the backtracking.
I don't mean to say it isn't worth flipping through. Just that this context is material to any analysis of it.
[1] https://www.wsj.com/articles/cryptocurrency-firms-investors-...
The WSJ article is very thin on details, and I suspect is missing important nuances. I do not know what happened at the SEC meeting, but my guess is that they pitched something very close to this linked presentation (which you'll note is dated March 13, likely before the SEC meeting). In particular, take a look at slide 11, which tries to bifurcate the world into (i) pre-launch securities and (ii) post-launch live networks, with the latter perhaps being a currency, commodity, security or some other beast, depending on its properties (e.g. a post-launch token with profit sharing features would likely still be a security).
These VCs and their lawyers are not morons -- the case for most ICOs being blatant securities offerings is impossible to argue against, but the more narrow view that Nick has outlined has real merit to it and I'm sure is close to what they pitched.
Also, I don't disagree that a ham-fisted SEC regulator could easily argue that Filecoin post-launch is a security -- that's precisely the problem. Crypto today can often be treated as a currency, a commodity and a security all at the same time, and often in incompatible ways. The industry _should_ be meeting regulators, and coming to a sane coherent policy on how to treat these things in different contexts (perhaps via well-delineated safe harbors), so that people can continue to innovate without worrying they are breaking the law.
The industry should be trying to create a single example of a non-fraudulent non-investment utility token.
The optics of millionaire VCs flying across the country on their millionaire LPs' dimes to safeguard hypotheticals against regulatory scrutiny while millions of regular Joe's are getting scammed are palpable. Before you can argue "X should be exempt from regulation because it exhibits Y properties," you have to have an X with Y.
Of course not, they're smart people trying to finagle exceptions to the regulations to enrich themselves.
>Also, I don't disagree that a ham-fisted SEC regulator could easily argue that Filecoin post-launch is a security
"ham-fisted" meaning properly applying long-established standards to what are clearly, without question, securities. The only people arguing otherwise are the wealthy investors who stand to gain from an alternate ruling.
If these cryptocurrencies or tokens were inflationary and meant to promote commerce/trading rather than holding and speculation then I don't think anyone would have a problem (like more easily traded microsoft points or MMO gold).
This also doesn't change the fact that most online currencies are functioning as unregulated securities and are facilitating illegal transactions and money laundering.
If more thought was put into creating decentralized, inflationary currencies that followed current financial regulations I would not have a problem with cryptocurrencies. But the predatory nature of the community that has developed around cryptocurrency and the focus on get rich quick schemes rather than online commerce is what worries me about cryptocurrency.
Sorry for the rant.
Sorry, but the whole finance (and VC) world is about getting rich quickly. Cryptos, while being more scammy due to newness and lack of regulations, are not fundamentally special in this regard.
I disagree. Cryptocurrencies are unusually scammy. (Past tech cycles, both those which realized their fruits and which failed, had lots of vaporware. And there were some scams. But the latter are more prevalent in this domain.)
My hypothesis for this is in the original sin of Bitcoin: choosing currency as its use case. This primed the space to think of tokens as securities on which the average Joe could get rich quickly, the underlying business be damned. (It also seeded the culture with black market operators.)
> the whole finance (and VC) world is about getting rich quickly
Which makes the author of this article's efforts to exempt their investments from financial regulation [1] questionable.
[1] https://www.wsj.com/articles/cryptocurrency-firms-investors-...
Maybe I'm misunderstanding you but Bitcoin's entire purpose was to be p2p cash. What other use case would you have suggested if you were advising Satoshi in 2008?
Put another way, the blockchain's original sin was Bitcoin. It started the conversation in a scummy way.
I don't mean the cryptographic properties which enabled distributed trust--that's cool. I mean the deflationary combination of a fixed total number of bitcoins, and ever-increasing amounts of energy and time to create new bitcoin. This creates tremendous incentive to create or buy bitcoins and then hold, hold, hold, hold. That's the opposite of what you want for a currency! You want people to spend a currency, and hold assets.
Bitcoin today works like an asset, not currency. I don't know if this was the actual idea, and early adopters essentially lied about the currency aspects to prime the bubble; or if the early adopters actually did think it would be a great currency and just got hugely lucky.
I do know that there is at least some usage of it as a currency because I work on a p2p marketplace and talk to people that buy and sell things almost every day.
If you were around the Bitcoin community in the early years, you will remember that the community took a very dim view of ICOs. They were called "pre-mined" back then, and it was basically a slur that was synonymous with scam. It is the newer generation of enthusiasts that have embraced the ICO. Again, I don't think you can blame this on the fundamental design or original community around Bitcoin.
What you're actually asking for is not an inflationary currency, but one that automatically adjusts its inflation rate to the demand. But that's not easy to achieve technically, and even if you could, it comes with its own issues, as the Swiss central bank can tell you.
Inflation is a measure of prices, not the money supply. Since our economy prices in U.S. dollars and Bitcoin has, for the most part, gone up vis-à-vis the dollar, Bitcoin itself has mostly been deflationary.
For inflation, it's not. A basket of real goods and services is. There are few practical baskets whose price, in Bitcoin, isn't falling.
It depends, when this word was coined, it simply meant increase in money supply. We can prove it by looking at the word for inflation in other languages, for instance in Hindi it is 'Mudrasfiti', which literally means 'increase in currency'.
Increase in money supply leads to increase in prices ceteris paribus, so people tend to conflate the two concepts.
OP is correct in saying that 'Bitcoin is inflationary and will remain so until 2140'. Whether the prices in bitcoin rise because of that is independent of the fact whether bitcoin is inflationary.
"Inflation was initially used to describe a change in the proportion of currency in circulation relative to the amount of precious metal that constituted a nation’s money" [1]. It was less a synonym for increased money supply than for debasement. From the 1930s, however, "the Keynesian revolution in economics...separated the word inflation from a condition of money and redefined it as a description of prices." Now "the term has become nearly synonymous with 'price increase'."
Economists have no view on money supply per se. They do, however, have a view on price deflation. It is bad. Bitcoin, if treated as a currency, is price deflationary. As such, it inherits the junk that come with price deflation, namely hoarding in favor of real activity.
> We can prove it by looking at the word for inflation in other languages, for instance in Hindi it is 'Mudrasfiti', which literally means 'increase in currency'
This is not a proof...
[1] https://www.clevelandfed.org/newsroom-and-events/publication...
* The token issuing authority, I don't think you'd like that * The existing token holders, but then don't they already benefit from increased prices of their tokens?
Its like as if, you cannot create a system where you do not benefit the early adopters AND have them evangelize for you for free.
* Light-Touch Stewardship
* Buyer/Investor Protection
Both of these imply a beneficiary/counterparty to go after. No counterparty means any protections or enforcement is impossible below a network-wide ban.
* US-Centrality
Also implies a beneficiary, if only to gain tax revenue or the splashy effects of innovation.
In both cases centralization is a key component. To put another way, BitTorrent does not have a Role of Government section in it's spec.
1: https://www.dropbox.com/s/7koiztv8mae98qg/What%20Are%20Crypt...