The second extract from Coinfomania’s interview with Giacomo is more about decentralization in a conversation on mining, hashing power and nodes. Subjects very dear to Bitcoiners.
Thinking of decentralization, the Internet comes to mind as it started as a decentralized tool for communication and data transmission but soon became very centralized.
Do you think the same could happen to Bitcoin?
Possibly and we should be concerned about it, but not too much.
First, we have a lesson learned from the internet. We saw it becoming centralized with commercial adoption in the ‘90s so we experienced the weaknesses. People working on bitcoin were working on the internet back then so they know where things went wrong.
Second, the internet was not an ideological project as is Bitcoin. Of course, it had many political consequences but the creators were purely technical people. They wanted to create a protocol for transmission and when the centralization and privacy concerns occurred, the answers were pretty weak because the people behind it were mainly technical.
On the other hand, Bitcoin has a strong ideological component and now developers are much more resistant to compromises than with the internet in the ‘80s and ‘90s.
Another disadvantage of the internet is that it does not offer a great incentive mechanism whereas BTC does. For example, giving away your connection you get paid with Lightning Network for every byte transmitted. This is sustainable, not only can this mechanism keep bitcoin more decentralized but can help decentralize the internet too.
How about the debate about the China miners centralization?
I don’t think mining and hash centralization are a serious problem.
If China bans mining, then small Chinese miners can continue or even increase their market shares whereas big miners will cease operations as they are more bound to comply with regulations.
Therefore, in the end, the banning turns out to be actually good.
The more authorities try to regulate the field, the more decentralization is incentivized.
Also, there is a thermodynamic reason for the decentralization of mining. For the way heat dissipation works, it’s better not to have many miners in the same room or in the same country. Therefore, the more physically decentralized they are, the better it is.
The real problem is Asic’s production: if the government seized all the factories producing Asic cheaply there would not be much we can do in that direction.
The hashing problem would be worse if it could determine the rules of Bitcoin, in that case, whoever reached the majority of the hashing power it could change bitcoin in whatever way. The good thing is that the original currency security model of bitcoin does not rely on miners as ultimate decision-makers. Miners do not validate, miners only confirm valid transactions, they cannot change the rules.
They could reorg the network by censoring and stopping one address from spending or they could double-spend valid transactions. They cannot take money from people but only double-spend the money they are spending which is a kind of attack, but a very limited one as they cannot change the network.
A few years ago there was an attempt to allow miners to validate transactions but luckily that idea never got support as it would have been a major threat to decentralization. They only decide the chronology of valid transactions but not their validation.
Because nodes validate transactions and that’s why it’s so important to run nodes, right?
Yes, your node will reject invalid transactions no matter how much hashing power is involved.
The node will only take valid transactions according to bitcoin rules and among those, it will choose the most confirmed ones. Therefore, validity comes first and afterward the node will revert to the miners for chronology. Of course, if no nodes ask the miners to confirm chronology then the miners would be in more control and it would be a fairly weakened system and super easy to take over.
That’s why it’s so important to encourage more people to run nodes. Also, it’s very dangerous to move a lot of money without running your own node.
You are a very popular Crypto Twitter personality, very funny but also very knowledgeable.
Recently, you have identified with 7 Asian teen girls, with 7 tall Black women and other gender/race-related identities. What is this all about?
I consider the debate about women in blockchain very stupid because bitcoin is actually one of the few fields where your contribution, in theory, does not depend on your genitals.
There might be other social factors, for example linguistic. If your English is very broken you will not manage to communicate properly so your ideas might not receive the correct attention. But genitals or chromosomes cannot impact your debate or contribution in the space also because most of the debates will happen online where you can be totally anonymous.
Hence, to prove a point, I started to identify first as 7 women because nobody knows how many there might be behind a profile, then as Asian or Black as you cannot assume the ethics either. Then I added tall because I am short and so on…
Although racism and intolerance can be a problem, if there is a field in which that’s less of an issue is bitcoin. People saying there are too many males in bitcoin are missing the point because I see a logical inconsistency in the debate.
Let’s finish with a little joke. You are on top of a tower with Craig, Roger, and Vitalik and you can get rid of two of them by throwing them down and only save one.
Who would that be and why?
I would be tempted to say Craig simply because he cannot do any more harm to this world since it’s now clearly obvious how much of a scammer he is. It goes beyond my understanding of how people can still follow him. It’s totally irrational that there are still people that believe in him.
But then I think of Vitalik, who is not an obvious scammer and although he’s a terrible developer or system designer he could still do something good in the space.
For example, he could go back to writing as he was very good at that. He’s a nice guy, I even had a selfie with him in Tel Aviv, he’s very intelligent but I am afraid he created the most misallocation of money, talent, reputation and time than Craig ever did.
Vitalik could come back to be a valuable asset. When he was writing for Bitcoin Magazine he was one of the best technical journalists able to explain difficult things in simple terms.
So, in the end, I would save him with a demand: “If I saved you from going down the tower you would have to go back to being a Bitcoin technical journalist and not a shitcoin pumper”.
What about Roger?
Oh, he’s down. No doubt about that!