Hey there, this post loosely goes off the prompts. I apologize in advance if the prompts were meant to facilitate the discussion topics to a greater degree than I interpreted.
I found the readings interesting and appreciated their breadth!
After re-reading the bitcoin paper (haven’t read since 2014) there were a few things that stood out to me.
- In recent years there has been attention to the prohibitively large size of the Bitcoin ledger, yet this wasn’t supposed to be a problem in the original theory posed in the paper. Satoshi explains how due to the Merkle tree’s construction and pruning, the size of the ledger should only grow by a 4.2MB per year. What went wrong? Have people not been spending Bitcoins in the way that Satoshi imagined, making sufficient pruning impossible?
- Another part of the paper that stood out to me was in the section about incentives (6). In the explanation of why the protocol and system will remain a secure system, the paper says “If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.” While this might keep nodes honest, I wonder if this scenario still poses a terrible insecurity to the economic system of Bitcoin. Consider an entity that assembles enough wealth and then CPU power (51%) so that they can then continuously and increasingly have the highest probability of mining the next coin, therefore growing their wealth, which can be reinvested in even more CPU, further increasing their likelihood of winning the next block, and this cycle repeating itself? Even if this miner is “acting honestly” they have effectively overtaken the system and could operate as a dictator or monopoly within it at any time.
A tangential question that came up for me throughout the reading was: what is the difference between cryptology and cryptography? I hadn’t seen “cryptology” much before. The answer is that they are now commonly used interchangeably but that historically cryptology was an umbrella term for cryptanalysis and cryptography.
About the “Blockchain and Trust” blogpost:
I found this to be a very interesting critique that I have not heard enough of. Particularly that trust in bitcoin and its protocol (“in math we trust”) is insufficient without a distributed infrastructure and ecosystem to operate with it. There is a lot of economic theory that “works” when considered in a simplified vacuum, but is less applicable in the messy real world. Theory around Bitcoin and other cryptocurrencies suffer from similar problems.