Medium Around The Block: #1
Medium is one of the richest sources of information in the crypto + blockchain ecosystem. In fact, it is far better than any single professional publication. However, it is very difficult to surface signal amongst all the noise. We share a weekly list of the most interesting pieces we’ve discovered on Medium from the past week — or from the archives. To receive more of The Block’s analysis, insight, original content and curation, visit us at The Block!
Let’s ease into this! Ben Yu introduces us to the cryptocurrency market with his exceptional introductory 101 post from June 2017.
Now, let’s add a little bit of historical perspective on Bitcoin specifically. Nic Carter and hasufly explore the evolution of Bitcoin narratives over time.
John Backus considers decentralized technologies and the cryptocurrency market through the lens of BitTorrent and the P2P file sharing market: “Technology mattered, but legal strategy and targeted decentralization killed off the majority of the market in the long run.”
John Backus with another great piece. The key question to ask:
what can some people not do on centralized systems which they should be able to do? If you look closely, you might be able to spot informal strategies people are using today to get around the rules, and these could help inform what to formalize into a protocol. Decentralization can be a powerful weapon, but it is hard to deploy and can backfire if it isn’t paired with other legal strategies.
As we think about how open economic protocols are similar to and different from traditional businesses, Richard Burton has coined the term “hashflow”, a play on cashflow. In Ric’s words
If you replace the cash that comes from commerce with the hashes that come from algorithms, you can start to follow the flow of value around these open economic networks
In response to Naval’s recent comments on developer incentivization and the importance and value of holders with respect to cryptocurrencies, Brendan Bernstein writes a piece on the “power of holders.” Brendan concludes with the following thought:
Valuation is predicated on investor behavior and so is developer compensation. Devs ultimately follow the holders in terms of valuation. Investors are the most important aspect. Holders control the protocol.
A great piece from January 2018 by James Prestwich with this key conclusion:
The more money in a system, the more likely it is that miners will mess with it. As we build bigger exchanges, more complex casinos, and add more and more value to the chain, miners have greater incentives to interfere Consensus isn’t a layer underneath our dApps- the two are deeply intertwined. When we write software, we don’t care about the physical properties of silicon — because silicon doesn’t actively try to take our money. Unfortunately, the EVM doesn’t run directly on silicon, it runs through miners — and if miners can’t be trusted, then the EVM can’t be trusted… Solidity developers must program a computer that’s working against them. The EVM itself is a Byzantine system… Miners aren’t your friends or enemies — they’re a force of nature in our consensus systems. Systems that fail to plan around this will eventually lose out to clever miners.
We close with a strong claim by Nik Bhatia:
Bitcoin staked to Lightning is the most unique income producing asset in all of monetary history: income with zero counterparty risk. The historical implications of this on capital markets are tremendous.
Thank you for reading what we’re reading this week. Until next weekend, Happy #HODLing and see you at The Block!
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