Digging through archives yields gold

Friday, 15 March, Year 5 d.Tr. | Author: Mircea Popescu

The old cryptography mail list where Satoshi originally specifiedi his idea for a next generation game currency contains some invaluable nuggets. Not penned by Satoshi himself, but by James A. Donald. To quote :

If I understand Simplified Payment Verification correctly:

New coin issuers need to store all coins and all recent coin transfers.

There are many new coin issuers, as many as want to be issuers, but far more coin users.

Ordinary entities merely transfer coins. To see if a coin transfer is OK, they report it to one or more new coin issuers and see if the new coin issuer accepts it. New coin issuers check transfers of old coins so that their new coins have valid form, and they report the outcome of this check so that people will report their transfers to the new coin issuer.

If someone double spends a coin, and one expenditure is reported to one new coin issuer, and the other simultaneously reported to another new coin issuer, then both issuers to swifly agree on a unique sequence order of payments. This, however, is a non trivial problem of a massively distributed massive database, a notoriously tricky problem, for which there are at present no peer to peer solutions. Obiously it is a solvable problem, people solve it all the time, but not an easy problem. People fail to solve it rather more frequently.

But let us suppose that the coin issue network is dominated by a small number of issuers as seems likely.

If a small number of entities are issuing new coins, this is more resistant to state attack that with a single issuer, but the government regularly attacks financial networks, with the financial collapse ensuing from the most recent attack still under way as I write this.

Government sponsored enterprises enter the business, in due course bad behavior is made mandatory, and the evil financial network is bigger than the honest financial network, with the result that even though everyone knows what is happening, people continue to use the paper issued by the evil financial network, because of network effects - the big, main issuers, are the issuers you use if you want to do business.

Then knowledgeable people complain that the evil financial network is heading for disaster, that the government sponsored enterprises are about to cause a "collapse of the total financial system", as Wallison and Alan Greenspan complained in 2005, the government debates shrinking the evil government sponsored enterprises, as with "S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005" but they find easy money too seductive, and S. 190 goes down in flames before a horde of political activists chanting that easy money is sound, and opposing it is racist, nazi, ignorant, and generally hateful, the recent S. 190 debate on limiting portfolios (bond issue supporting dud mortgages) by government sponsored enterprises being a perfect reprise of the debates on limiting the issue of new assignats in the 1790s.

The big and easy government attacks on money target a single central money issuer, as with the first of the modern political attacks, the French Assignat of 1792, but in the late nineteenth century political attacks on financial networks began, as for example the Federal reserve act of 1913, the goal always being to wind up the network into a single too big to fail entity, and they have been getting progressively bigger, more serious, and more disastrous, as with the most recent one. Each attack is hugely successful, and after the cataclysm that the attack causes the attackers are hailed as saviors of the poor, the oppressed, and the nation generally, and the blame for the the bad consequences is dumped elsewhere, usually on Jews, greedy bankers, speculators, etc, because such attacks are difficult for ordinary people understand. I have trouble understanding your proposal - ordinary users will be easily bamboozled by a government sponsored security update. Further, when the crisis hits, to disagree with the line, to doubt that the regulators are right, and the problem is the evil speculators, becomes political suicide, as it did in America in 2007, sometimes physical suicide, as in Weimar Germany.

Still, it is better, and more resistant to attack by government sponsored enterprises, than anything I have seen so far.

I am quoting this because I wish to lend it my signatureii and whatever weight that may carry. The man is absolutely correct, in that crystal clear manner which scarcely finds more time in the public eye than the fleeting second of an obscure mail list.iii

I think this pretty much sums up the situation we have been enduring since that very first time the socialist borg broke into the mainstream of public discussion, in France, in 1789. Without respite since then increasingly organised hordes of grasshoppers raid the increasingly elusive ants of this world.iv

The entire system is based on two pillars. Population increase is one of them, because :

  • the larger the population, the more grasshoppers available. If you wish to cause trouble more is better than few, that's all there is to it, large groups of mindless zombies are more impressive to the individual eye than smaller groups of same.
  • people are born stupid, and so the more of them there are around the greater the cost and effort needed to educate them into humanity, which means the less likely it is someone might be able to do it.
  • people require resources to live, which means the larger the population the larger the pressures it puts on the environment, which can then be recycled into justifications for the perverse system itself. This is always how socialism works politically - it manufactures crisis, it then blames it on "вредительство", then the socialists intervene to "fix" the problem, everyone takes a pay cutv and everyone's happy. What can I tell you, it works with zombies.

The other is debasement of... well... pretty much everything. The currency must be debased because that's the only way to hide the fact that your parents worked less than you and enjoyed their life more, and their parents in turn worked less than them and enjoyed their life more and on and on. Culture must be debased, and for this end education is perverted into something very akin to penitentiary - under the guise of making prison more like school the reverse is of course accomplished.

Hierarchy must be debased, in all places and venues. Nothing serves better to ruin the natural hierarchy of politics as electing slime by the fateful combination of "low information voters" with prisonguard "educators", all this covered under an array of fecal matter generously distributed as "commentary" by an array of grasshoppers promoted to bugle blowers. Nothing serves better to ruin the natural hierarcy of business as promoting idiotic representations about how "money doesn't matter", well backed by careful and perpetual debasement of the currency (for the greater good, of course). Nothing serves better to ruin the natural hierarchy of everyday social life than creating strange, nonsensical "rules of conduct" prohibiting the most natural acts like touching or using magic words.

There's a catch though : pretty much all this infernal machinery of doom depends upon the continual, endless and unavoidable debasement of the currency. If inflation is no longer a fact, if avoiding it becomes not common but even possible, nothing in the grand scheme of socialism works anymore. Nothing at all, everything depends on that. And so we end up with meaningless disputes about the completely imaginary dangers of an undebasable currency. Soon enough we'll end up with the blaming of all the problems socialism generates on the non-debasable currency - and in fact the only reason this is not happening today is that in the estimation of the socialists not enough people know about it yet.

I understand why Mr. Donald is so conservatively guarded about the prospects of this clash. I, on the other hand, am a little younger than him.

PS. Incidentally, what he mentions, a "government sponsored security update" has just happened. Ordinary users were just bamboozled by it. Funny how being young is no protection against being wrong, contrary to what one might otherwise think.

  1. He also proceeded to implement a prototype of that original specification, prototype of which he obviously didn't think much if at all, judging by the quality of the code he output and the sort of design choices he made - it was to be a quick and dirty example of the specification, certainly nothing more than that. []
  2. Italian firma, whence firm in English. Believe it or not this is not the first time around when people end up represented, symbolised and meaningful through their signature alone. It's at the very least the second time. []
  3. Vulgus ex veritate pauca, ex opinione multa aestimat. Also in Italian. []
  4. The fact that wikipedia rates that ancient fable as "morally ambivalent" is quite indicative of the degree of decay. []
  5. If you compare quality of life since the late 1700s you might discover that in objective terms it's moving slowly but monotonically towards zero. []
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23 Responses

  1. You have quotes <3.

  2. What do you make of the said clash now, 7 years after the article?
    How do you think it will play out, as people realize Bitcoin being the best way of protecting against inflation, government taking note and cracking down on it, because they don't want the power of debasing currency and engaging in socialist idiocy taken away?
    What do you make of SegWit, making its way into Bitcoin like cancer, or other proposed "improvements" like Taproot and whatnot? (If not government sponsored, at least very deluded updates, difference doesn't really matter in the end).

  3. Mircea Popescu`s avatar
    Mircea Popescu 
    Friday, 31 July 2020

    I don't think talking of "government" is adequate in any serious context. One might as well talk of Santa Claus or Divine Wrath. It's true that at some point in the past a large-ish number of people actually thought such a thing as this "government" dohickey exists or might be existing -- but those times are well past. One could of course attempt to ignore that fact, but anachronism is anachronism, at best quaint, in all cases ineffectual.

    "Government" aside, the idiot wave, as exemplified by the recent WHO-led hysterics, is strictly incapable of any sort of meaningful action, and entirely irrelevant to any discussion of Bitcoin or its phenomenological downstream -- much like a discussion of sheep herding behaviours is irrelevant to stews and cooking. The people abducting highschoolers for the basic purpose don't tend to seriously review whatever "oracles" the girls that were compiled right before being helped across the chasm (ay quinto regimiento de mi vida, quinto quinto quinto regimiento de mi muerte) ; and I really don't give much of a shit about the equivalent minutia, nor is anyone else that I know of (and mind the gap).

    Other than that, my last word on "common people" being in any sense or to any degree involved occurred earlier this year. All I can say to you personally is drop dead, that was your last chance.

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