Ever since monarchies fell to the collective idea that citizenship and voting rights should belong to every individual, decision making has been constrained by a lack of long term thinking and rational irrationality. Of course, monarchy had it’s own drawbacks. Your sovereign can suddenly die and a power struggle between heirs can ensue. Every once in a while, the individual who comes to power might become a tyrant, insane, or incompetent.

These issues are usually what leads to the transformation into some form of democracy. Democracy, however, comes with a couple of insurmountable problems.

  1. Rational ignorance
  2. Rational irrationality
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Rational ignorance

“Users give value to frozen concentrated orange juice”

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Frozen Concentrated Orange Juice

I, the user, am a sovereign individual. All evaluations are in my, and other users, control and we determine that which is and is not valuable. There are no forces which act upon us by which this evaluation is determined. We deign to value frozen concentrated orange juice, and that act, alone, is what gives frozen concentrated orange juice its value…

This is nonsense.

Value is an ordinal placement in a prioritized list of ends. You give value to your ends when you place them in that list. Goods, however, are not…

The NPC (Non player character) meme has recently come to internet fame as a way of disparaging people who seem to have nothing new to offer to a conversation, generally about politics, and speak about subjects as if they were dialog trees which were just responses programmed into them. While the most frequent occurrences of the NPC come from certain sections of the political spectrum, the level designers have still populated our simulation with NPCs of many different ideologies.

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Players often find themselves going down the same paths of these dialog trees multiple times with multiple different characters, and sometimes…

Have you ever wondered why banks have marble floors? You walk in, the place is decked out with fancy columns and marble everywhere. Do you value that? Your goal is to spend as little time as possible at the bank to perform some transaction, does the interior matter THAT much? You know you’re paying more for that, right? That bank has to pay for the marble floors, and to do so, they must make money. So you pay more interest on your Mortgage, or get a smaller amount of interest on your savings account.

Why then does this exist in…

Suspend your disbelief for a moment, and postulate that miners don’t actually control the blockchain regardless of what non-mining fully validating nodes say they would like the protocol rule set to be by broadcasting their node version. Imagine instead that full nodes are able to successfully constrain miners. These apparently provide miners information about the consensus of what rules are supported by the “economic majority”.

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The problem is you can’t actually tell which full nodes represent which coins unless each node broadcasts a signed message from their private keys holding their coins. Furthermore, one of the reasons for running a…

Recently, the St Louis Fed has entered crypto news stating that Bitcoin and government backed currencies have no intrinsic value. This is supposed to be in contrast to things like commodities, but this contrast doesn’t exist. To show why, let me first explain what the fed means by intrinsic value.

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It’s easy to informally say that you value your red car with a cup holder, but that’s not quite right. You value being able to quench thirst on your way to your desired destination, plus whatever reputational benefits and excitement is achieved by owning a red car. …

I try to bring to all my articles the principle of charity, taking the best arguments my opponents have to offer, and strive to never straw man them. I often do this by taking the points they argue for as given, and then go behind their front lines, and looking for non-obvious ways that their arguments still fail. …

It’s been said “Not your private key, not your Bitcoin. Not your node, not Bitcoin”. The theory goes like this. If you aren’t running a fully validating node to verify your own transactions, then you can’t know if you are transacting on the chain you intend to. Running a full node “guarantees” that you are securely transacting according to the exact rules that you desire.

Let’s see how close we can get to the security of a full node without running one. …

In the Bitcoin protocol, only 21 Million Bitcoin will ever be created because the reward for mining blocks halves every 210,000 blocks. This reduction of miner incentives has some worried that if block space isn’t artificially limited, then when the block reward is too small a race to the bottom will occur as miners clear out the mempool of all available transactions in order to claim the maximum amount of fees.

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Bitcoin schedule for miner reward

This analysis does not however reflect the true power that miners collectively have over the block reward. Even without a block size limit, miners can enforce any fee or…

Bitcoin-accepting merchants want to receive payment and provide services instantly. However, block construction times can be as much as 10 minutes after the moment a bitcoin transaction is broadcast. In the time after a transaction but before a block’s creation, that transaction can be superseded by another transaction with a larger fee paid to miners.

With the change in the mempool protocol from first-seen-first-included and the rejection of conflicting double spends, to the inclusion of double spends and prioritizing transactions with larger fees attached, 0-conf transactions can no longer be reasonably secure for any sized transaction.

The idea of replace-by-fee…

Sam Armstrong

Software Engineer @Go figure it out if you want to

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