“Blockchains are about increasing freedom for individuals and allowing them the flexibility to leave on principle at any point in time.”
If day one of Scaling Bitcoin showed how bitcoin’s technical and academic communities are moving swiftly to capitalize on the network’s newly updated code capabilities, day two offered a glimpse of a project emerging, hurdles overcome, into a world that appears more likely to play host to a diverse array of cryptocurrencies.
In this way, the final day of this year’s conference showcased how, for the event, presenters and attendees, this transition is fraught with concern – as for all the talk of opportunities afforded by new crypto assets, the bitcoin community still largely traffics in reputation as its chief currency.
And as Scaling Bitcoin hinted this year, there are strong social norms at play among participants, many who feel strongly that ICO projects, and the blockchains and developers that support them, are little more than “scammers” and “pump and dump schemers.”
This thinking, echoed by attendees, was on display in an opening keynote by MIT Media Lab director Joi Ito, who used his talk to denounce ICOs, going so far as to state that the funding model could threaten to drain bitcoin’s talent with the promise of easy money.
Such thinking appears shared by the conference itself, as Scaling Bitcoin has instituted a year-long ban on ICOs – a move made as part of an effort to ensure technical standards, but that came at the cost of additional funding for an event that’s still the work of dedicated volunteers.
Still, if the quote above hints at the economic freedoms developers want to enable, the reaction of attendees suggests such movement, whether technical or social, won’t come without cost. Nor, it seems, will one approach prevent all of the community from pursuing new opportunities.
As such, some of the more provocative talks of the day took a more nuanced look at how bitcoin might reconsider its value proposition, design and goals in light of this larger cultural shift.
In one of the more controversial talks, invited speaker Joseph Poon, co-author of the Lightning Network, discussed work developed with ethereum creator Vitalik Buterin that theorized how bitcoin could take steps to cement its role as a “reserve asset” among cryptocurrencies.
In this way, conference organizers struck a strong editorial balance – as while most talks were rooted in academic results, contention around key talks appeared more indicative of issues that are perhaps best confronted in the rare public forum Scaling Bitcoin provides.
Yet, as Poon’s comments highlight, the event found bitcoin’s technical community grappling with not just moral issues, but a deeper level of design considerations, which, while free of the drama of block size increases, may require the protocol’s mission to be refined.
“I think it’s important to be cognizant of what type of interaction the bitcoin community will have with external parties. This is a marketing effort, one that considers this proposed self-actualized view,” Poon said of his latest work.
For example, if the passage of SegWit can be seen as an affirmation of bitcoin as a store of value, Poon’s talk directly confronted the next step in ideation: namely, whether this means bitcoin should take steps to market the strong security it can provide other chains through its technology.
Called Plasma, Poon’s concept envisions a layered ecosystem of blockchains, in which smaller blockchains built above a simpler settlement blockchain could have vastly different characteristics, including terabyte-sized blocks and infrequent block creation.
As proposed, the system seeks to explore how systems like the Lightning Network could be adapted for more than payments, to encompass use cases for computing and smart contracts.
Still, Poon demurred often to the audience, seeking to stress that the bitcoin community would need to decide on whether this was an area they’d even like to explore.
“There’s no expectation of this going into bitcoin and I’m not suggesting it,” Poon said. “This is more of an exploration of what that would look like.”
Observers like Peter Todd, however, were critical of Poon’s ideas. Todd went so far as to argue Poon’s thinking is indicative of the ICO-influenced mindset that sees a need for many blockchains and tokens where simpler solutions should prevail.
For instance, Todd argued that bitcoin would “naturally” become a reserve asset for other chains, but that there’s a difference between “accepting other coins may exist” and enabling their creation through technology.
“What I’m saying is the vast majority of other chains don’t have a reason to exist,” he said.
Another talk that envisioned a multi-blockchain ecosystem was given by David Vorick, CEO of Nebulous Labs, a startup developing a decentralized storage blockchain with its own native cryptocurrency, siacoin.
A different take on a similar idea, Vorick’s talk speculated on a world with “millions” of bitcoin-like blockchains, some of which would have very small market capitalizations.
As such, Vorick’s talk focused on different attacks that could be waged by miners against these networks, as well as how the nodes that store copies of the blockchain might be incentivized to guard against corruptions by serving as “motivated defenders.”
Vorick went on to speculate that nodes could be incentivized to watch these blockchains for the surprise publishing of a large amount of new work in attacks.
“If the defenders are online and watching this attack, they have revenge motivation, perhaps they are more motivated than the attacker to defend it and protect their payment. If the attacker has to deal with a motivated defender … everyone will lose money,” he said.
Vorick framed the idea as one that could enable “aggressive experimentation,” though the question-and-answer session hinted that more attack vectors could be present that make the scheme naive or less viable.
Still, he notably defended the idea as a timely one, given a blockchain ecosystem where many of the networks operational today won’t go away.
“Every micro-chain would have its own coin, a separate price and consensus rules, and you would change between them using a multi-chain multi-network,” he said of the idea.
Still, there’s more than culture at play in supporting the idea, there’s also current market conditions, as a talk by developer Anthony Towns highlighted how the economy already developed around bitcoin is affected by contentious disagreements.
Indeed, Towns’ talk highlighted the ease with which disagreements can lead to the creation of new networks.
Most of the work presented focused on assessing the ways in which exchanges could play a role in helping markets evaluate the perceived value brought by technical changes. For example, he noted how exchanges are now beginning to list forked versions of the bitcoin blockchain, but that it’s difficult to tell now what those values mean.
Towns also highlighted how new cryptocurrencies could be made to represent potential bitcoin variants, comparing the model against other ideas, such as how contracts could let those who felt strongly about a change instantly swap coins in the event of a fork.
Still, he suggested determining pricing would be a challenge.
“We don’t have enough equations to work out what the unconditional values are. If you look at the Bitfinex price of Segwit2x, you can’t tell if it’s because the coin isn’t going to be valuable, or whether they think it won’t have any value,” he said.
Towns also noted a problem with the way forks are conducted today, and in his full remarks, offered proposals for how such contentious transitions could be better executed.
Lightning in the distance
Other talks also highlighted an undercurrent idea at the conference, that the Lightning Network, while helpful in increasing bitcoin’s capacity, still requires a substantial design work before it can be successfully implemented.
This takeaway was best encapsulated by a talk from Hebrew University’s Aviv Zohar. Titled “How to Charge Lightning,” it notably looked at how a mature Lightning Network might function, exploring the costs and considerations users might face when opening payments channels and settling the results to the blockchain.
Zohar’s work, to be developed in a forthcoming paper, focused specifically on how the amount of money kept in Lightning channels would impact interactions between users.
“You start to think about channels and you wonder, when do you restart a channel?” Zohar said. “There’s an optimal point, other than waiting for the channel to completely run out [of funds], you reset.”
In this way, Zohar speculated that Lightning channels may want to have a fee structure whereby higher costs are charged for larger payments, proportional to the amount of money in the channel being used. Still, he noted that the costs have to also be competitive against simply executing the transaction on the bitcoin blockchain.
But while Zohar cautioned his work was an “early attempt” at such analysis, his ultimate conclusion was that, while Lightning helps the network, he was “expecting more.” Perhaps controversially, he hinted at the idea that a larger block size may eventually be needed to accommodate Lightning-style networks.
Further, his comments gave credence to the event’s inclusion of on-chain scaling research as possibly prudent, given the aims of the bitcoin community and its resolve to grow its network in the face of competition.
As his comments noted, bitcoin developers would be wise to still consider any and all options for how to improve the network toward its goals.
News Source: CoinDesk