Topic: Bitcoin Is Not A Democracy. Then What It Is? - page 4. (Read 2739 times)

Bitcoin is freedom . You can do anything with bitcoin on your own command. You choose what you do with it and control its outcomes.

You are not lying you are incentivized to come up with a more efficient way to get the desired results. In ancient Egypt, Mining Gold with slave labor did not mean the Gold was fake... This are other issues that do not have place in Bitcoin. That is social responsibility and users should enforce it by voting with their money. It is not an inherent flaw of a system.


Proving waste is a very biased term. Proving Expended Energy in any endeavor is the basis for the decision of the users who vote with their money. If they feel it is best to Expend it elsewhere, they will signal that. This is also not a flaw of the system. It is how a Free System works.

If you want a 100% efficient system, you should try some resource based economy or something of the likes. Where each one specializes in doing only one thing. It doesn't work. People are glad to trade inefficiency for commodity. But this you only discover by pricing.


I fail to grasp why it would not be competitive? Having fewer suppliers does not mean the system is gamed. This conclusion is only valid when there are regulations in place to protect said suppliers. If there is no competition, it is either because the Monopoly is working at a loss for himself, or noone can beat their efficiency.



The goal you mention is only achieved by incentive. Otherwise people would use their computing power for another more profitable endeavor.

Proof of Stake is what we have now in our current debt backed inflationary financial systems. Furthermore, if you untie Bitcoin's value from Energy, or the real world all together, it is none else than a speculative asset. You might as well trade WoW Gold.



This would be a major shift towards what you have in the current financial markets.

You effectively transfer the reward from Energy to Capital. From producing to financing. I do not like it, or I do not understand it. 

Yeah , I agree with you , Since in the current time many of the people who don't know about Bitcoin fully are saying that
Bitcoin is a way of the loss of money and responsible for the black money also but the reality is that the Bitcoin is giving us the democracy to use our own money in any possible ways and everything is open to see for anyone , so how can be the Bitcoin is centralised , this is open source like thing where anyone can use at free of cost and having security like military forces  that is about impossible to hack .
Here I will say that nothing is like Bitcoin becauseamy of the banks system are impressed by Bitcoin and now they want use the Bitcoin technology for banking sector .

I personally would like to call Bitcoin a FINANCIAL REVOLUTION. Going from centralized to decentralized  is helping the normal Folk get a piece of the money pie that before they could never have a part of. It also is opening the world to better governance and transparency in all affairs and the technology behind Bitcoin can be used for so many different platforms and projects both financial and civil.

There is no notion of "efficiency" in "proof of work".  Proof of work is meant to be a proof of wasted economic value.  However, the cryptographic proxy of proof of work used in bitcoin, can let you "prove" wasted economic value with different "fake factors", depending on what you call the "efficiency" of the system: I can give you cryptographic "proof" that I wasted X Big Mac value, while in fact, I only wasted X/10 Big Mac value, because I have more "efficient" proof of work equipment and electricity prices.  So I'm lying.   


But, by definition, there is no "efficient waste of energy".   Think about it.  By definition there's nothing efficient in wasting stuff.  There's no useful product coming out of that waste, contrary to "spending stuff" to "produce value".  Proving waste in itself doesn't produce any value.  It was just a trick to make sybil voting in the consensus protocol somewhat impractical, to keep the consensus protocol decentralized over many users ; and it turned out that this competition in "efficient lying about how much you really waste" actually reduced the consensus protocol deciders to a small oligarchy.


Sure, but then the fungible global bread market would also not be a competitive free market with local inventions, alterations, niches etc... which is the true advantage of the free market: inventivity.  The only "invention" you can do in bitcoin is to "lie somewhat more efficiently about how much proof of waste you can deliver, versus how much actual value you truly have to waste in doing so".  But it is fungible Trabant for all of us.


But this is what you have.

BTW, the aim of mining is NOT to gain money.  It was to get decentralized consensus by the users.  This is why it failed.  Proof of stake is a much better system in that respect, although proof of stake was hard to start with, as the only staker would have been Satoshi (even though he was also almost the only miner).  The "reward" for participating is in fact the biggest error.  The coin creation and the consensus decision should have been separate.  The fact that coin creation was linked to consensus decision, and hence made consensus decision a profitable business, is exactly what turned bitcoin into an oligarchic central bank.


There is no proof of work to be had for consensus.  That was a big mistake.  It is cryptographically stupid, it wastes a lot of resources, and by the erroneous relationship between the work proved, and the value actually wasted (the "efficiency"), it allows for biased competition, leading to centralization.  While it was only introduced to avoid hidden sybil, in introduced "open sybil".  A single mining pool has the "voting rights" in the consensus process of hundreds of thousands of users.  And "proof of work" was introduced to deny sybilled nodes to have any "voting rights" in the consensus decision, so that it would start to be expensive to start up hundreds of thousands of nodes to be able to get, exactly, that voting weight in the hands of a few.  While that is exactly what it accomplished.

The only good use of proof of work is to kill seigniorage and regulate coin emission (instead of a fixed coin number, one could have a fixed proof of work to emit a coin, and hence emit as many coins as people are willing to prove work for it, keeping the value of the coin limited to that wasted value of work and killing all hope for speculation).
But that "printing coins with proof of work" shouldn't give you voting rights in the system, which it does now.  Voting should be done by proof of stake: the stake holders should be the ones voting over the rules, not people  being able to lie over how much value they wasted.

Again, I understand the reasoning. And effectively, it is true Bitcoin could be much more efficiency optimized. But in following your argument to conclusion, efficiency as you define it (only 100% efficiency) will only be reached by monopoly. I might go on a limb and argue that in a perfect efficiency system, there would be no competition, everyone would just specialize in their own thing. This was not what I was trying to convey.

Each miner that shows profit is showing efficient waste of energy, or as I prefer, efficient deployment of his energy. Calculating efficiency cannot be done on the base of a single block. It's probabilistic.

Furthermore, Bitcoin is global, there is no theoretical need for a "local breadstore" (for the purpose of this argument, please ignore country specific circumstances). If a Global breadstore could send you bread through your mobile phone and do it better than your local home made bread, the market would recognize it and reward it. If the local bread is better, it will get more demand and price would reach an equilibrium and both would compete at different scales.

What you are describing is a protectorate. Effective subsidy. But this is done by Consensus. It's why it is so beautiful. If we all rather have Joey Popcorn get money from mining while watching Netflix and not investing anything significant into the system we can have that. If we all want a Central Bank to take over and be Sheep, we can do it. The beauty is that whatever the Consensus, enforcement is guaranteed.

I personally like what we have now. I would be very interested in hearing a case for a Proof of Work that doesn't equate to a subsidy.

Bear in mind, that I am cutting out outside forces from this picture. I thoroughly understand your arguments in a scenario where Bitcoin is in the real world. China could be subsidizing miners with free electricity and whatnot. The US is probably monitoring exchanges as well as taxing us all with bureaucracy. Broad Spectrum Patents bring barrier to entry and tax us all for no added value. And so forth. But this is not a Bitcoin problem in my opinion, nor is it its task to solve.

I myself, look at Bitcoin as what I think it could be.

Bitcoin is not a Government, or some libertarian or anarchist dream - it's just Bitcoin.

I think of Bitcoin as a store of value (the new gold) with the potential (if we get scaling right) to double as a payment system also.

Bitcoin is a monarchy, led by Satoshi and his wife in the shadows.

Bitcoin is undemocratic is a really good thing as most of us can see the case of us how people are treated in the so called democratic country. If it was democratic there would be some vote system and furture development would surely be controlled by those directors while bitcoin is a free agent there is no specific word to what you can call bitcoin

See, this is the part I'm not convinced by.  There are so many people who claim that Bitcoin will either be irreparably damaged or warped beyond recognition if anything at all is allowed to change.  Whether it be something like the blocksize, what they might perceive as the "official" developers suffering a "hostile takeover" or "power grab", or in this instance some sort of sovereign immutability being lost.  But I don't think any of that can change the basic underlying formula that makes Bitcoin what it is.  

The magic formula (IMHO) is as follows:

• Open source code, meaning it doesn't matter who coded it or what their beliefs or motives might be.  As long as the effects of the code are neutral, obvious, stable and bug-free, it doesn't matter where the code originated.
• Users are free to both view the code and to select the code they choose to run based on what rules they believe should be enforced and how that code should govern the network
• The network shouldn't be so resource intensive so as to make it impractical for the average user to run a non-mining full node if they so wish
• The network shouldn't be so congested or have fees so high as to make it impractical for the average user to transact on-chain if they so wish
• The consensus mechanism (and by extension, the alignment of incentives for securing the chain) is never undermined or subverted

There isn't really a single word to describe it yet, but that's what Bitcoin is.  Bitcoin's purpose can be defined as a global network to transfer tamper-proof ownership of digital data without needing a third party.  But what it really is can be defined in those 5 bullet points.

For the duration that all of those five golden rules remain intact, I'm convinced Bitcoin can resist devolving into one of those lesser, "human" archaic and perverted power structures.



Honey Badger Republic.  

Bitcoin is following for basic principals of the democracy:
1. Equality. Of course, this ideal is fully presented in the Bitcoin Protocol. Unlike Bank money, which, if desired, can be subjected to censorship (as it was with the banking blockade of Wikileaks), bitcoin payments are completely impossible to censor, since these payments do not require a mediator, and literally consist of cryptographically protected information – pure analogue of freedom of speech if you want.
2. Popular sovereignty. Bitcoin literally exists because of the consent of its users; if they don't agree with the rules of the Protocol, they will simply not use it. And this use, in turn, is what gives value to currency. In the end, users of Bitcoin would be nothing more than a source. Moreover, Bitcoin is not just ruled with our consent – it exists with our consent.
3. Autonomy. It can be argued that the organizational structure of programming open-source is certainly the best way for ordinary people to develop their abilities to organize themselves.

It's a Republic.

Each person that owns bitcoin does not get to vote on the future developments of Bitcoin. But bitcoin owners entrust the node owners and miners (bc miners have slightly greater "voting" power) to make the decisions on future Bitcoin developments. And if you don't like how the node owners and miners have "voted" you can sell your bitcoin and choose to you another cryptocurrency or none at all.

The one empowering element is that anyone can run a bitcoin node and thus participate in the "voting" process.

I put voting in quotes because it's not a vote as much as accepting newly created code. Any new code generated needs to be accepted by the nodes and miners and if a majority accept the new code it becomes part of the existing core blockchain (and thus bitcoin).

The concepts themselves are quite clearly defined.  However, they do indeed not apply to our current societies.  Our societies are elective aristocracies.  That is to say, they are aristocracies, but instead of having a hereditary indication of who is part of the aristocracy (= those that can impose their will on others, also called "lawmakers"), there's a voting game that is played.  Voting is a game like any other, and is not a clear expression of own preference.

A true democracy is a system where all subjects subjected to rule, are to decide themselves by vote of majority on every rule and aspect of collectively imposed behaviour.   No place in the world is a democracy.  Probably Switzerland comes close, but no cigar.

In a true democracy, every single decision by the "collectivity" is taken by majority of all those affected by the decision.  It is the pure dictatorship of the majority.  Most systems that call themselves "democracies" are jokes, in that they only give themselves a kind of imposed legitimity by a funny system of pseudo majority of votes over the aristocratic clan that will have the power to decide on all of collective aspects for the next 4-5... years.


From the moment you have "elected agents", you have lost democracy, and you turn those "elected agents" in an aristocracy of some kind.


Yup.  That is the fundamental function of state: to extort the people to keep the power in the hands of an aristocracy.  In the ancient regime, that was explicit, in the new regimes, that is somewhat better hidden with games like elections and so on. 


Yes, but that is the unavoidable outcome of every power monopolist (state) ; it was designed for that purpose by the first Kings.  The first Kings (in Mesopotamia) were actually temporarily put in power by the "council of the wise" in the city-states the time of war and conflict, because war-time needed a leader and one didn't have time to ponder and discuss.  The King soon realized that he would remain in power if he kept war ongoing, which is what happened (the Kings in other city states came to the same conclusion).   As Kings remained in power during never-ending wars, they could impose their own kin as their own successors.... this is how royalty was born.   Nothing fundamentally changed since then.


true.

Given that in "modern democracies" about 70% of the national product goes through the hands of the state in some or other form, we are in reality in state capitalism.  The "capitalist" countries of this world are almost more communist than the USSR was in its initial years.


Bitcoin is no exception.  Bitcoin's power structure will fall in one of the different classes of standard power structures.  The ONLY possible exception would have been if bitcoin were truly immutable.   If bitcoin turned out to be game-theoretically immutable, it would mean that there is not any power structure that can make its rules.  It would be a "theocracy" where the rules are laid out once and for all by a divinity, Satoshi, and nature would be such that no-one would be able to modify the Divine Rules.  However, we all know that the original rules will hit a hard wall, because of the block size limit.

So in as much as Bitcoin is a theocracy, it will have a Final Judgement Day very soon built into it.

And if ever the rules can change, there will be a power structure that will change those rules, and it will be a human power structure, with people having the power to change them, and others, without that power, which is exactly what an aristocracy is about.

The thing with trying to compare Bitcoin with concepts like "Democracy" or "Capitalism" is that those are generally poorly defined concepts to begin with and involve so much wishful thinking and doublespeak that it's beyond a joke.  Both are deeply flawed and even downright broken and debauched in their current guises.  Both are murky, contorted shadows of what they should truly be.


If you live in certain parts of the world, many would have you believe that your system of governance is a democracy, but these people are in denial. Democracy can be described as:


In reality, the thing we call democracy is where a bunch of tax-dodging corporations and millionaires throw money at some corrupt puppets who try to enact the policies that prove most profitable for the corporations and the millionaires.  Influence is bought and sold with the intent of redistributing wealth to the top of the pyramid.  The public then vote for the bought crook they detest the least.  It has absolutely nothing to do with representing the interests of the general public and hasn't for decades.  

A more accurate description would be a "Kleptocracy", a form of political and government corruption where the government exists solely to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population.


If you live in certain parts of the world, many would have you believe that your system of commerce is capitalism, but these people are in denial. Capitalism can be described as:


In reality, the thing we call capitalism is where the businesses that don't even need it receive government tax breaks and are effectively subsidised by the public for no reason, while the failing businesses like banks are bailed out by the government, again at the taxpayer's expense.  The government also generally keeps interest rates artificially low to benefit the financial sector.  It has absolutely nothing to do with a level playing field where the most competitive companies reap the rewards and hasn't for decades.

A more accurate description would be "Growthism", the toxic admixture of capitalism for the poor, who receive no advantages, while it's socialism for the wealthy, who will receive an endless stream of handouts, subsidies, bailouts and lifelines at the expense of the wider population.


Bitcoin is none of these things, and thus, can't be compared with them.  It's something better than democracy or capitalism could ever hope to be.

I think bitcoin is somewhere near being an Anarchy type of currency because it's not under the control of the government and is certainly not a democracy as we witnessed earlier before segwit was activated, it is not really based on our votes in spite having a part to play by influencing the devs . I honestly think these political terms can not define bitcoin it just belongs in its own world.

Yes, and no.  On one hand, you are right, in that at first sight, there are no privileged aristocrats that can give the "right to mine", like they give licences to be a pharmacist or a wireless operator, and punish with violence those that try to do that without their agreement.

However, in reality, economies of scale and local subsidized electricity and manufacturing of asics make that there is a *de facto* oligarchy of mining pools, mining producing equipment, and profitable mining business.  Essentially, as a small newcomer, you cannot enter, even though there is no aristocratic RULE with violence that holds you back.  Call that "free market" if you wish.  But if you push this logic to the extreme, then even states are a free market.  After all, how does a state acquire its monopoly of violence over its territory ?  By having an army.  You can then argue that there is no barrier to entry: everybody can set up his own army, compete in the "revolution market", and try to win the de facto violence monopoly, so states are no aristocracies either if you push the logic you advance, to the extreme.

The point is that there is a kind of "winner takes all" system in bitcoin: the block that is won, makes all other competing work on the previous block moot.  Yes, statistically, you can compete with small mining equipment, but in reality, you can't, because there's a collective unique consensus for each block, and there are no "small, local blocks with their own customers".  In fact, that DOES exist, but it is called "alt coins".  Within bitcoin, every block is a winner-takes-all competition.  This is different in a real free decentralized market, where the local bakery can sell bread to the local customer, without a "winner takes all" global competition for each bread that is being sold.

The effective economies of scale that make mining only profitable if it is done in large pools, with large equipment, and with local subsidized electricity and cheap labor, makes that it does lead to a de facto oligarchy, even if that oligarchy is not a "privilege oligarchy" obtained by the direct licensing of the violence monopolist aristocracy.


This is a bit ironic with bitcoin, because bitcoin mining is pure waste.  You get in fact a competition of wasting where the "wasting function" is simply biased.  In bitcoin, you have to abuse the bias in the wasting function to be "efficient" in the way you explain.  Efficient usually means "More utility for the same waste", which is at the basis of the "best allocation of scarce resources".  But in bitcoin, "proof of work" is simply "proof of waste", but the proof is biased.  You can FAKE produce more "proof of waste" in certain circumstances than in others, but the "difficulty attained" is of no economic utility by itself.  Nothing is produced.  You only "proved waste", and some can "prove more waste with less waste" than others, which is the degenerate idea of "efficiency" in this particular case.  If I can get cheaper electricity, and I can build smarter hardware (ASICS), I can fakely "prove" more wasted work than someone else, and I get to win the contest, but nothing more valuable was produced.

This is entirely different from "finding ways to produce cars with less resources".  No, I find "ways to prove more wasted work with less resources", which begs the question.  The proof of wasted work has no utility, contrary to cars that were produced. 

The fact that you can get "economies of scale" and "efficiency advantages" in "proving wasted work" is simply an error in the proof of work function, which only provides a biased proxy to "wasted work", and doesn't prove any direct waste ; if it were, there couldn't be any efficiency differences, by assumption.  Proof of work is (by definition) not useful.  It was only meant as a tool to avoid sybil attacks, and to enhance true decentralization, while it degenerated in exactly the opposite because of the failed design of it.

I dont consider bitcoin as fully democracy because government can still seize and regulate it anytime they want. Consider it democracy in terms of sending money wherever you are and whatever you do.

There's no right term to call it though if its not democracy then. But good thing is we enjoyed bitcoins hassle free transactions.

Anarchy for some places. But according to its function I consider bitcoin is a free thing because we can freely use bitcoin.
Bitcoin can now be used by everyone and everyone is entitled to use bitcoin.

Why was Bitcoin created in the first place?

Going against Bitcoin fundamental is unethical and criminal. Activities of stakeholders MUST revolve around Bitcoin/Blockchain fundamentals.

I think bitcoin is like an anarchy just because miners who has a huge mining power holds the upper hand in terms of bitcoin scaling and whales holds the power in terms of price. Having said that, this two won't have real power if users would not use bitcoin in the first place so it is none of the above. For me bitcoin is just like an anarchy, but it ain't one.