A Letter to Jamie Dimon

I think your concept matches the intention: decentralized.

Does BitCoin achieve that, or do we need some significantly better technology?

Censorship resilient: China managed to shut down BitCoin exchanges, so, well, er, not quite. They could shut down the protocol, as well, I suppose. They did shut down Tor, another censorship resilient decentralized thing. So partly, it is (the ransomware authors seem to make good money through BitCoin, and ransomware attacks are far more common now you can earn a fortune with them without being caught), and that begs the question, if we really want censorship resilient financial transactions at all.

But that’s just the “it’s illegal” part of the bullshit bingo matrix of BitCoin criticism.

There is another one: sharing work between many computers is not actually decentralized, it’s “a cluster”. If you make the transactions hard to sign (PoW), the response is by creating a cluster of computers to do so. Those can be distributed, but since they all have to work together on the same data, it’s not decentralized.

Decentralized would be, when each host can keep only a small subset of the crypto-ledger. Where we can therefore keep a lot larger ledgers than with a centralized entity. And that’s a thing where you can be better in terms of comfort and performance than the centralized entity.

Think of BitTorrent, the decentralized ancestor of netflix. It’s not only cheaper, it was available and useful more than a decade before netflix. Of course, through the censorship resilience, the copyright owners hate BitTorrent, as they can’t censor the pirated movies there. Censorship resilience quickly means “illegal” here, too.

If the crypto-ledger was distributed in the BitTorrent way, each node would hold a small part of it. The checking of the balances would be distributed, each node would check a small subset of transactions for correctness. And with some redundancy and MITM-attack prevention (from TOFU to PKI everything is possible; unlike the spending entities, the signing entities on a crypto-ledger don’t have to be anonymous), you could actually avoid double spending, too.

And for the bubble: Yes, there’s possibly more room to grow. But remember: Growth never is infinite, and the faster you grow, the faster you hit the ceiling. And as human psychology is driving here, a big crash of the BitCoin price and a lot of people who jumped on late will not only cause an economic crisis, it will also ruin whatever people understood BitCoin is. Crypto currency, decentralized application, BlockChain, whatever they associate with it will be burned, at least for a decade. The ICOs probably will contribute significantly to that feeling of something went horribly wrong.

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