The Ethereum Blockchain, My (short) Thesis
The technology knows no borders, shatters societal barriers, and will disassemble your mental model with ease.
Ethereum allows for confident, friction-less exchange on a global scale with no prerequisite for trust. It can be set to automatically process any transaction you could imagine with its open source brain. Yes, I believe 100% in this technology because it just…makes…sense.
Many would argue that all of it is for naught. There are too many attack vectors, there’s too much at risk, and in due time will be reduced to ashes by hackers. If it’s not the speculators abandoning the project when the market crashes, then it’s going to be the distributed world turning its back when they realize that blockchains should only do one thing, allow transfer of value from party to party. Well… I respectfully disagree, not because I want to be right or the critics to be wrong, but because
Facts are stubborn things.
-My friend John Adams
You see, there can never be too much progress, only progress moving too fast. This is where I believe the confusion sets in. Many of the critics are correct with their security and valuation assessments right now and we should heed their advice, especially those playing (and yes we are ALL playing right now) with real money, but when the assessments are placed in terms of NEVER or NO WAY AT ALL I think they lose the right perspective. Here’s my perspective with regard to two of the most common sources of critics: Markets and Bitcoin
Markets
I’ll start with the easy one… Markets are greedy.
That’s really all there is to it! Despite the prevalence of efficient market theory, the evidence has shown that we can be quite irrational and never more so than when we see dollar signs. Look at the headlines and you will find, quite remarkably, that the ONLY consideration being given by a majority of the public, which may even include you, to blockchains, is the valuation of cryptocurrency. WHAT?!? Markets have absolutely no, or bare minimum standards at best, when it comes to throwing a LOT of money into a new technology.
This behavior is not new!
Lack of understanding + possible fortunes = Irrational behavior. That has held true through all of the market bubbles over the past century and is NOT an Ethereum problem. People have simply decided to take significant risks, hoping for a significant windfall.
Bitcoin
Oh my. All of the wonderful discussions with Bitcoin maximalists. Just might be one of my favorite things to do.
I guess I’m optimistic that one day we will actually be a happy family together. This is not coming from a place of I’m right and you’re wrong.. this is more of an acceptance that we each have a different means to a different end. That means there is no intersection between the purpose of our respective networks.
Ethereum and Bitcoin simply exist in the same realm of technology.
So while the world tries to lump us into the same body, the reality is we’re siblings in the same family, and like siblings, we are growing to be adult individuals with different life paths. My hope is we maintain a mutual respect for what we choose to do with our networks.
I can boil the debate between Bitcoin and Ethereum down to one thing. Handling value. Bitcoin maximalist types believe assets should be maintained in a definitive state, no tricks, no “smart” systems, no gimmicks. Recording state changes for the same bits over and over. They believe the blockchain should do one thing:
- Track UTXO
Period. I get it. If I would’ve posted about Bitcoin a few years ago this would be completely different. I never had much of an interest in Bitcoin past the discovery of a practical trustless network. That was a poor decision on my part because there has been and always will be a future for Bitcoin, I’ll save my explanation for another post.
Ethereum
In THIS post I’d like to briefly discuss the Ethereum system.
Ethereum believes the blockchain can do more than one thing:
- Implement automated logic to change state
- Maintain the state changing mechanisms, AND
- Record the state change itself.
Whaaaaaaaaaat?? Mind blown!
TIMEOUT: Those that aren’t familiar may be asking why do you keep saying state changes??? STOP SAYING THOSE WORDS AND EXPLAIN THEM! State in a distributed ledger, which is a blockchain network, is the recorded location of bits, as digital assets, at any point in time. The location and point in time that tend to receive the most interest is your address in the network’s memory and right now.
Now let’s get back to what I just said. Ethereum implements a distributed ledger that has automated logic to change state, permanently maintain the state changing mechanisms, AND record the state change itself. Sound more difficult to manage than Bitcoin? It is! On top of that, we have a global movement of unregulated money wanting in on it. If you can’t see what’s going on here, imagine finding a copy of Windows 3.0, putting it on the world’s most accessible computer, and then, as you’re building the prototype, a bunch of people insist on securing $20 billion in it. This IS an Ethereum problem. BUT, as I said before
We can never have too much progress, only progress moving too fast.
We simply have a difficult problem to solve. We don’t abandon this leap in technology just because our challenges on Ethereum aren’t being overcome today, right this second. We keep moving forward because the cold hard fact is, Ethereum will change everything.
Evan Van Ness released a newsletter today, be sure to read it. Vitalik Buterin released the latest draft in Proof of Stake incentives for Casper , it’s a nice light read over breakfast. Check out our website at majoolr.io, follow us on twitter @Majoolr, our libraries and contracts are posted and documented on github, if you have useful library code then SEND A PULL REQUEST!
