Join us as we discuss the decentralized future and how cryptocurrencies like Bitcoin, Ethereum, and others will usher in changes to the way we live our lives. While still early days in the technology, Chris Porter and Paul Holze share their adventures in trying out projects that are live on main net today.
The Blockchain Trilemma
In this episode we cover a simple and straightforward way of understanding Bitcoin, called the Blockchain Trilemma. Thomas Sowell once said, "There are no solutions only tradeoffs" and this is especially true for Blockchains.
In this trilemma, there can only be two of these three factors:
Decentralization, Security, Scalability
Each of these are a gradient between extremes.
Decentralization in blockchains relate to how much a project aligns with each of these factors:
-permissionless, anyone can be a node on the network, anyone can buy mining hardware and help to secure the network and record transactions.
Scalability in blockchains relate to:
-ability to bootstrap the network
-Cost of Participation
Security in blockchains relate to:
-Incentives to secure the network
-Evolving code base
-Secure by default (from a users perspective)
Link to our slides from our presentation on the Trilemma at the University of Arizona:
Bitcoin and Blockchain: What’s the difference?
Are you really excited about blockchain, but not to sure about bitcoin? Paul and Chris dive into why we believe the technology and the specific implementation of bitcoin will last. To highlight some of the aspects we think make Bitcoin special, we bring up a hot new project, the JP Morgan Coin. Centralization is a major distinguishing factor between Bitcoin and the stablecoin from JP Morgan. Another factor is the distribution of validators and nodes that decide what transactions get added to the ledger. Centralized ledgers can lead to censorship, and require the users trust the people in control of the ledger. In a decentralized system, you can own your own node, and all nodes/miners are able to submit transactions to the ledger, and every node decides if you are following or breaking the rules of the project.
JP Morgan Coin
Zcash Inflation Bug
Tweet about bug not exploited yet
Links to us
Spectrum of Decentralization: The Gradients of Crypto
This episode we discuss several consensus models, a bit of how they work, but more importantly how consensus models contribute to a projects decentralization and why that matters. Proof of work, and proof of stake are two primary examples of consensus models, but each have tradeoffs. Nodes can be organized in 3 ways, centralized, distributed, and decentralized.
There are some negative effects to distributed networks. Upgrading the network can be a challenge, because there is no way to enforce all nodes upgrade to the latest version. Governance of the network is also challenge, that different projects are working to solve.
Although centralized services can become an attack vector for hackers, they tend to be faster due to their network architecture.
We touch on the power consumption of Bitcoin, and how that power is traded for the security of the network, then jump into proof of stake and how it secures the network from double spend using a different process.
Links Mentioned during the show:
Decentralized Graph - https://medium.com/@VitalikButerin/the-meaning-of-decentralization-a0c92b76a274
bit torrent article - break rules - https://medium.com/@simonhmorris/if-youre-not-breaking-rules-you-re-doing-it-wrong-bittorrent-lessons-for-crypto-2-of-4-72c68227fe69
Arjun Article - https://medium.com/@arjunblj/crypto-theses-for-2019-dd20cb7f9895
Broken Systems: Why crypto alternatives are inevitable
Current systems are broken, and you may not always realize that is true until you see a better alternative. In this episode, we dive into some of the solutions out there, and how they solve the current problems.
Some Problems: Centralized systems create honeypots for hackers to attack.
-Lack of control of your own data (facebook and Cambridge Analytica)
-Financial systems, your bank is a trusted third party. In countries where you 'basically' trust the government, this problem does not come to light as easily.
-Censorship via 'trusted third parties' like email service providers and ISP's.
-Many services online are insecure by default. Cryptocurrency solutions
Solutions: Cryptocurrencies can be a storage of wealth. If your governments currency is going through hyper-inflation storing money in a cryptocurrency is a way to get around that deflation of your wealth.
-Using crypto as a currency, to pay for goods and services.
-Stablecoins are a category of cryptocurrency to peg crypto to traditional currency (fiat).
-Privacycoins are a way to maintain anonymity while using crypto for transactions.
-Smart Contracts is another category of platform that are moving traditional centralized services on the blockchain.
-Utility Tokens sit on top of smart contracts, and allow for exchange of goods, or other utilities separate from the other categories above.
-Non-Fungible tokens are verifiably unique tokens, like crypto kitties or digital art.
-Security Tokens create a way to break up ownership of an asset into smaller divisible units than have been possible before.
Decentralization: Paul and Chris demystify
We open this podcast sharing the stories behind how we got into crypto/bitcoin, then share the meaning behind our podcast name Two Confirmations and how that relates to the way bitcoin transactions work. The meat of this episode is devoted to decentralization and what that means. To understand decentralization, we first give examples of centralization and trusted third parties, and how decentralization in a project like bitcoin is different.
Andreas Antonopoulos talk on Remittances: https://www.youtube.com/watch?v=kso58g7_fYg
Tweet on Decentralization: https://twitter.com/Melt_Dem/status/1031190564639830016
Still Relevant Info
This show has a lot of evergreen content still relevant today.