dApps: More d, Less Fee

The unfair releases and pyramidal wealth structures of previous cryptocurrencies has led to more expensive fees for developers than should currently exist.

The blockchain of the future will not be the one that raises the most capital initially. It will be the one that reaches as many hands as possible.

A new wave of blockhain developers means a new market opportunity for existing cryptocurrencies. By far the most effective crypto at recruiting new developers has been Ethereum (and more recently, EOS). With buzzwords like “dApps: decentralized applications”, “smart contracts”, “initial coin offerings”, and a number of other  side projects, it can be difficult to find any reason to doubt the churning machine that is Ethereum (and now, EOS).

Ethereum sold  roughly 85% of its total supply to 5,000 investors in a small, not widely advertised pre-sale. EOS did the same, and people bought it, WTF. While there are a lot of subjective reasons why we believe this pre-sale will poison Ether and EOS over the long-term,  there are real, objective consequences to this pre-sale that a number of new blockchain developers who I speak with are unaware of. This pre-sale has created a significant barrier to entry into the world of Ethereum smart contracts, but you likely won’t read anything about it until you’ve already prepared to launch your coin.

 

Unlike what many of the Ether and EOS docs imply, dApps aren’t just regular applications hosted in a “decentralized” way. When you run a regular application, generally you have one dedicated server, sized perfectly to your company’s needs and running code with minimal financial repercussions. Obviously, you can modify this code without an additional fee, because it’s on a server you control. On a decentralized network, however, even simple server modifications need to be propagated across thousands of nodes. For the purposes of application development, think of each node as a server. Instead of having just one server, you have 1000s – which means every change you make costs money in the form of Ethereum fees.

Computationally, and thereby, financially, a simple change to a database should be 1000s times more expensive in a dApp then in a regular database. On a network where wealth is evenly distributed, this price increase actually isn’t that bad.

But on Ethereum, wealth is not evenly distributed, not in the slightest. Instead, simple database changes carry fees with them, often in the range of $0.50 to $2.20, with similar fees for modifying your code. Developing for Ethereum is REALLY expensive – even more expensive than it should be if we were to run 1000 servers ourselves.

Ethereum is more expensive than it should be because its pre-sale has created an environment where there is an unsustainable distribution of wealth in the underlying protocol’s coin. Companies that raised hundreds of thousands of Ether in their pre-ICOs are prioritized by the network’s fee system over newcomers. Consider that raising $10,000 in Ether today might only cover fees for 5,000 of your dApp’s database changes, while $10,000 raised during the Ether pre-sale would cover roughly 60,000,000 database changes for your competitors. Although these competitors may have an application that serves a different purpose than yours, they are still your competitors on the Ethereum network for things like processing time and strength of computation. If your app shows any measure of profitability, these existing wealth structures have the power to fork your product and resell it in a much more efficient manner, because they have orders of magnitude more ether than you.  Whoever can pay the higher fee to the decentralized structure owns the network, and Ethereum, with its quiet pre-sale of more than 85% of its total supply, is insanely more unbalanced in its wealth structure than any other open financial system on the planet.

 

 

The unfair wealth structure has created a fee structure that is unsustainable. While 0.01 Ether is dust to older companies who bought in early, it’s a significant barrier  to innovation for new ones. The hoarding of Ether causes an unnecessary fee spike among the active older smart contracts that prevents new ones from taking hold.

 

Pre-sales, and more broadly private-turned-public blockchains, are bad for everyone because they limit long-term adoption of the network. They are a bad business decision financially because they don’t take into account secondary and tertiary growth phases – two phases that a cryptocurrency has yet to achieve. The blockchain of the future will be the one that touches as many people as possible, not the one that raises the most capital.

 

 

For a blockchain-like system to last, it needs a fair distribution of wealth — or at the very least, one that consists of far less than 80% of a coin’s total supply. Ideally, the network’s wealth grows proportionally to each new identity on the network. Each identity can receive only one “new member” bonus, although on traditional blockchains, this can be difficult to enforce.

 

Being able to recognize each new member as an individual provides a new way of thinking about blockchains, which is why Project Oblio is built on a spiritchain, not a blockchain. Each human spirit contains a unique, bioelectric human aura that Project Oblio utilizes in constructing the network. Read more about our protocol here.
Pre-existing smart contract blockchains have a lot of capability for sandboxing. But most reasonable people outside of crypto don’t want to join an “old boys” club of wealth, especially when they don’t have a financial incentive to. And if developers can’t afford to innovate on your network, that’s even worse.

 

UPDATE (03/22/2018):

The Ethereum developers have begun working on the Rinkeby test network, a scalable network similar to Project Oblio, with the exception that only a privileged number of persons (based on online identities) are allowed to confirm transactions. Because these identities are based on online accounts, they can easily be faked, meaning a person or group of people financially incentivized can easily overtake the network (as we’ve seen with fake news on Facebook, etc.). Using the Rinkeby network without a live biometric to confirm each user is a BAD idea for developers.

 

UPDATE (06/24/2018):

Block.One raises $4.3 billion and locks exchanges from withdrawing/depositing EOS. Then the markets crash.

Perhaps the “ECORP” of crypto is not as much Ethereum as it is EOS. EOS used its connections to Steemit to maniuplate an undereducated blockchain populace into effectively investing in nothing — no guarantee for developments, no guarantee for anything except a market crash (at least initially).

Ethereum set the precedent that basically allowed everything in this blog post to come true, in the form of EOS.

A Bot Tax: Scaling For the Average User

Real, human users should be able to transact for free. Unlike EOS, which rate-limits transactions at the smart-contract level, Project Oblio aims to rate-limit transactions at the user-level.

Every cryptocurrency to date has, at some point, garnished claims about the internet-of-things, machine-to-machine payments, and easy-to-use APIS for sending stores of wealth. Often, it only takes one or two lines of code to send a transaction, resulting in large amounts of automated payments between exchanges, wallets, and advanced users. However, these kinds of payments are actually a bigger problem for cryptocurrencies than one would initially expect. Because these transactions are taxed at the same rate as the occasional transaction made by a “new” or casual user, they end up clogging the network, causing increased fees, tremendous block sizes, and relatively simple and inexpensive attack vectors, such as DDOS. For this reason, you’ll often see bitcoin developers talking about “anti-spam” measures to limit these excessive automated payments from disturbing the user experiences of a newcomer. A bad user experience is a barrier to adoption, and this barrier to adoption is bad for everyone, as it ultimately harms the returns of the businesses using the network so much.

 

Through its one-human-one-vote protocol, Project Oblio aims to allow for reduced fees to those members who are well-identified by the network, through a “Karma” metric. More specifically, transactions are prioritized when a user is “liveness detected” – proven to be actually there, needing a transaction to be sent as quickly as possible. Although machine-to-machine payments are necessary for network function, they greatly stress the decentralized network protocol. Prioritizing transactions in this manner can allow for a better end-user experience, while still allowing businesses and other machine-to-machine payers to function. Ultimately, it encourages real user adoption.

 

Because so few transactions sent on networks like these are initiated by humans, it is unlikely that fees for bots will be greater than that of competing networks. As such, the bot tax is really better thought of as reduced fees for live humans, rather than any deterrent against machine-to-machine payments.

 

Of course there are a lot of reasons to have machine-to-machine payments, but there are better reasons to create a garden of the internet which is provably human. Namely, real discussions, real voting, and real applications for BMIs.

 

Most scaling protocols to date have focused on payment channels, which are themselves a great idea, and will one day be implemented on Project Oblio. But payment channels won’t be useful for one-time payments and other types of transactions an end-user may wish to make. Really, to create a decentralized network that is used by the masses, it is much more important to first solve the issue of one-human-one-vote, so that we can, among many other things, favor real-world users over anonymous bots.

Defending Against Hired Fake Accounts

Mercenary fake accounts have driven altruistic coders from the cryptocurrency community. Can we re-inspire the lost population of altruistic developers with a watering hole prohibiting financially-incentivized mercenary accounts?

The most underrated threat to society today is the threat of artificial intelligence, but not in the manner you might expect. Movies like iRobot concoct an image of actual robots turning on society. More reasonable portrayals in the media and among tech leaders convey the very real threat to persons’ employability by intelligent machines. One such threat rarely discussed is the loss of freedom-of-speech on digital watering holes, due to hired “socketpuppet” accounts, including those controlled by mercenary A.I.

Why should we be scared of A.I. pretending to be humans on the internet? Because in industries like cryptocurrency, it’s already been happening. The difference between fake accounts now and 10 years from now is that fake accounts today have to be controlled by humans (see www.reddit.com/r/HailCorporate). These “astroturfers” can make you think a product, government public comment section, or news article is more deserving of your attention than it actually is, by means of pretending to be multiple users sharing a single consensus. While today these are probably just hired humans controlling multiple accounts in a clickfarms, tomorrow cheap computer programs running simple machine learning algorithms will allow everyone and their grandmother to pollute the internet’s discussion boards with fake consensus. We need an area of the internet where we can be 100% certain that a human is a human, and they are who they say they are. This network works best if is decentralized, because decentralized networks do not rely on trust in a third party, such as a CEO.

A.I. is already capable of generating human text indistinguishable of that from human-generated language.

Please see “Brainwaves as a future-resistant biometric: Human detection, Identification, and Authorization” for more info.

Why re-distribute wealth?

Imagine a viral outbreak on a spaceship like Elysium — the ultra wealthy’s ideal future space home for the world’s 1%. If 95% of that ship are white, and it’s a contagion that affects 65% of white people (not an unreasonable number), how will the remaining 35% of people run the spaceship? If 2 out of 3 engineers on said ship are dead, how will society continue?

Biological diversity is the most valuable thing we as a species possess.  No other species possesses it to our degree, and it’s our one defense against an unknown threat: be it a viral contagion, global warming, or a meteoric invasion. That’s how life survived after dinosaurs, a biologically diverse planet found a way for life to persist. A community of diverse genes is good for everyone because those who have the lucky genes can use their good health to take care of everyone else.

Previous, small scale, studies have suggested that people of mixed race are perceived as being more attractive than non-mixed-race people. Here, it is suggested that the reason for this is the genetic process of heterosis or hybrid vigor (ie cross-bred offspring have greater genetic fitness than pure-bred offspring). A random sample of 1205 black, white, and mixed-race faces was collected. These faces were then rated for their perceived attractiveness. There was a small but highly significant effect, with mixed-race faces, on average, being perceived as more attractive. This result is seen as a perceptual demonstration of heterosis in humans-a biological process that may have implications far beyond just attractiveness.” https://www.ncbi.nlm.nih.gov/pubmed/20301855

One Person, One Vote: An Internet Democracy

A hierarchy is an organization where people at the top have more sway than people at the bottom. For many communities, this works pretty well. Take for example, academia. Would you prefer to be operated on by a neurosurgeon who graduated at the top of their class, or one who graduated at the bottom? Intuitively, people who are good at what they do should have more influence over their respective fields than people who don’t know anything about said field.

 

In communities defined by clear objectivity, hierarchies are preferred. But sometimes, even objective tasks are better suited for crowdsourced opinion. In The Wisdom of the Crowds, James Surowiecki describes the case of the jelly bean jar at the carnival. When collecting guesses as to how many beans are in the jar, often one person will turn out to be a half dozen beans off. However, the average of the entire crowd’s guesses will almost always be more accurate than one person’s best guess.

 

Look no further than cryptocurrency for an even more pertinent example. Bitcoin was going great until a group of experts began to disagree. An “experiment” in digital currency, with clearly defined goals and promises for its members, chose instead to redirect its path in a manner more aligned with those in control of its system (and probably paid off by pre-existing wealth). A new cryptocurrency that doubles as a democracy could avoid this pitfall.

 

When we build an internet democracy, and not just a currency, it’s important that we consider how laws and rules will be implemented. If we can quickly and accurately tabulate people’s opinions, we can more effectively develop a society that benefits the majority. On a broader scale, we can use these “verifiable accounts” to do things like objectively rate and evaluate cultural content and products. We can reward and propel artists, musicians, and content creators who are most deserving of attention from others. Is the music you hear on the radio also the most liked music by people in your life? Do you trust the poorly written 5 star reviews on Amazon, even if they come from a “verified purchase”? What about the Reddit comments in /r/The_Donald?

 

The internet was designed with a missing component; proof-of-person. In a purely virtual environment, it’s extremely easy to create a false sense of consensus. Democracy on the internet is impossible without a way to show that one person has only one account within a community. More importantly, A.I. has reached language capabilities indistinguishable from that of a human being, meaning a mercenary algorithm can be used to confabulate false opinions on legal, social, cultural, and political issues, unfairly swaying opinion on subjective content. These “fake review bots” can be used to propel artistic content, consumer products, and even presidential candidates that are undeserving of such positive sentiment. If you don’t believe that this is possible or desirable, then in the years 2013-2014, why were accounts on bitcointalk.org with many posts selling for hundreds of dollars in bitcoin?

 

Democracy as we know it hasn’t changed very much since it took a week for a pony-rider to mail a letter up the coast. Needless to say, a verifiable democracy, intertwined with the communication speed of the internet, would be revolutionary.