The Weekend Read: Sep 13

trump 1. Permissioned validators and permissionless innovation

IB Times featured an interview with Smart Contract godfather (and oft-cited Satoshi candidate) Nick Szabo entitled If banks want benefits of blockchains they must go permissionless:

Szabo reiterated the point: to remove vulnerability banks also have to remove individual human control and the individuals in charge or with root access. Banks naturally hate that loss to their power. But they don't have any choice if they want to gain the benefits of having an army of independent computers that rigorously, constantly and securely check each others' work, he said.

Szabo's argument is that any level of permissioning makes a system more vulnerable and less secure, and that it introduces a slippery slope back to the current, sub-optimal infrastructure. Tim Swanson and others have argued the converse of this, with the argument that regulated financial entities both want and need some trust and permissioning in order to properly conduct their business.

One key distinction needs to be made: it is possible to have 'permissionless innovation' with a system or network that has permissioned validators. From a tech development perspective, the focus should be on the openness of the code, the vibrancy of the developer community, the transparency of the network's standards. Those are the biggest determinants of the success or failure of the innovation. Outside of a rhetorical confusion due to the similar wording, the status of validators on a network should not have any impact at all in determining the likelihood of permissionless innovation! The 'permissioned validator' crowd would be best served to rebrand. Ideas welcome.

2. Conference wraps


Coindesk's Consensus conference this past week hit all the usual notes with a very packed 'put a Blockchain on it' agenda. I had very high hopes for the Future of Innovation on the Blockchain panel (pic above), yet the esteemed panelists only had 30 minutes to chat. It proved to be too little time for any substantive debate or outrageous comments. You can find a review of the sessions here and here.

Many of the attendees of the Consensus conference headed straight for Montreal and the Scaling Bitcoin summit, which is still ongoing. In typical hacker fashion, the full transcripts can be found online.

3. Bitcoin Winter Blockchain Spring

As we discussed previously, the end of the summer doldrums should usher in a few interesting data points on the blockchain funding climate. And this week we got two. First, Bitcoin remittance app (or Mugging-as-a-service if you are snarky) Abra announced a $12m Series A round. That news was somewhat overshadowed by Chain.com announcing a $30m funding round made up of strategics such as Nasdaq, Visa and Capital One. The company was profiled in a longer Forbes piece as well:

Says Nasdaq Chief Executive Bob Greifeld, “[Blockchain] is the biggest opportunity set we can think of over the next decade or so.” [snip] “We know if we find a good way to deliver value to the customers in the industry, the numbers will follow. … It’s really about, ‘Let’s find the proper use for it–where we can change the world–and then the investment returns will follow.’ ”