- Hack — PHP with types, generics, collections, lambdas. From Facebook.
- Solve Hard Things Early — Build great habits around communication and decision-making when everyone still knows each other well.
- Marginally Useful (Paul Ford) — The last two decades have suggested a post-scarcity economy, where infinite copies of attractive digital things have a price approaching $0. Maybe that was merely a passing moment that we will look back upon with wonder once limited coins enforce scarcity—once the owner of a piece of digital art can look upon it with satisfaction and know with total, cryptographic certainty that because he paid for it, it belongs to him and no one else.
- Go Pipelines and Cancellation — Go’s fascinating me, as an example of a language designed for concurrency and syntactic familiarity.
The MtGox bitcoin exchange failure illustrates exactly how capitalism should work.
This post originally appeared on Andreas Antonopoulos’ personal biographical site; it is republished here with permission.
In the free market, failure is always an option. The United States has one of the world’s most vibrant entrepreneurial cultures, where millions of people start small businesses, create new products and invent new technology. Part of the startup culture is the idea of failing fast, failing cheap and failing toward success by learning the lessons taught by failure. Cultures that punish even minor failure in business with shame, exclusion and stigma are far less likely to foster entrepreneurs because they prevent experimentation by making it too risky.
Recently, the US has been infected by the “failure is not an option” mantra, a toxic hubristic fallacy, disguised as a truism, which promotes the idea that risk can be removed from life; that 100% security and 100% control are possible, even desirable. Those who attempt to remove the possibility of failure, to de-risk financial systems, end up creating the probability of spectacular failure. By removing the option to fail cheap and fail fast, they instead concentrate risk and ensure we will fail hard, fail expensively, and fail across the board.
Over time, crypto-currency networks such as bitcoin will get stronger
If a crook gets access to the credit card or wire transfer networks, it’s a disaster. That’s because, as I explained in my recent article about security models, these traditional financial networks achieve trust by excluding bad actors through access control. Effective access control requires exclusivity and strict vetting, only a small carefully vetted group of “trusted actors” are granted control.
Bitcoin and other crypto-currencies based on the blockchain invention are different. Trust is based on computation, not access control. On the bitcoin network you trust math so everyone can have access. That also means that there will be bad actors, arguably just as there are on access control networks, and nuisance attacks. Fortunately, these types of attacks cannot affect the distributed asset ledger, the blockchain, because to achieve the level of trust to write into the ledger you must apply enormous distributed computation. The root of trust is in the majority of computing power, not individual actors or any central authority.
A shift from trusting people to trusting math.
Bitcoin is a distributed consensus network that maintains a secure and trusted distributed ledger through a process called “proof-of-work.”
Bitcoin fundamentally inverts the trust mechanism of a distributed system. Traditionally, as we see in payment and banking systems, trust is achieved through access control, by carefully vetting participants and excluding bad actors. This method of trust requires encryption, firewalls, strong authentication and careful vetting. The network requires investing trust in those gaining access.
The result is that such systems tend to be closed and small networks by necessity. By contrast, bitcoin implements a trust model of trust by computation. Trust in the network is ensured by requiring participants to demonstrate proof-of-work, by solving a computationally difficult problem. The cumulative computing power of thousands of participants, accumulated over time in a chain of increasing-difficulty proofs, ensures that no actor or even collection of actors can cheat, as they lack the computation to override the trust. As proof-of-work accumulates on the chain of highest difficulty (the blockchain), it becomes harder and harder to dispute. In bitcoin, a new proof-of-work is added every 10 minutes, with each subsequent proof making it exponentially more difficult to invalidate the previous results.