Joi Ito's conversation with the living web.

In a previous post, I wrote that I believe the Blockchain has the potential to be as disruptive -- and unlock as much opportunity and innovation -- as the Internet and that it could become a ubiquitous, interoperable, reliable, low-cost network for transactions of various kinds. But along with that enormous potential, the Blockchain also faces challenges that are similar to, but in many ways very different from what we had and continue to have with the Internet and the Open Web.

I'm worried about the current situation of Bitcoin and the Blockchain.

Partially driven by the overinvestment in the space, and partially by the fact that Bitcoin is much more about money than the Internet ever was, it is experiencing a crisis that didn't really have any parallels in the early days of the Internet. Nonetheless, the formation of the Internet offers some important lessons -- most importantly, on the question of the talent and knowledge pool. In those early days, and at some layers maybe even still today, there were only a very small number of people who had the background, brain type and personality to understand some of the core elements that made the Internet work. I remember when there were only a handful of people in the world who really understood Border Gateway Protocol (BGP) and we had to hunt them down and share them with our "competitors" when we were setting up PSINet in Japan.

It's very similar today with Bitcoin and the Blockchain. There are a small number of people who understand cryptography, systems, networks and code and are capable of understanding the Bitcoin software code. Most of them are working on Bitcoin, while some are working on Ethereum and other "related" systems and a few more are scattered around the world in other places. It's a community including some who have been around since the 90s, before the Web, going to crazy conferences like the Financial Cryptography conference. Like any free and open-source software community on the Internet, it's a bunch of people who know each other and mostly, though not always, respect each other, but which fundamentally holds a near monopoly on talent.

Unfortunately, the wild growth of Bitcoin and now "the Blockchain" has caught this community off guard from a governance perspective, leaving the core developers of Bitcoin unable to interface effectively with the commercial interests whose businesses depend on scaling the technology. When asked "can you scale this?" They said, "we'll do the best we can." That wasn't good enough for many, especially those who don't understand the architecture or the nature of what is going on inside of Bitcoin.

Many companies that are used to making decisions around less complicated systems -- like building a website or buying and running Enterprise Resource Planning systems -- felt they could either just hire other engineers who would listen to the customer needs better or became so annoyed with the, "we can't promise but we'll try" attitude of the core developers that they lowered their standards and went with whomever would promise to meet their demands.

The future of Bitcoin, decentralized ledgers and other Blockchain-like projects depends on this community. Many people call them "Bitcoin Core" as if they are some sort of company you can fire or a random set of developers with skills that you can just train others to acquire. They're not. They're more like artists, scientists and precision engineers who have built a shared culture and language. To look for another group of people to do what they do would be like asking web designers to launch a space shuttle. You can't FIRE a community and, statistically speaking, the people working on the Bitcoin ARE the community.

If you try to build "something like Bitcoin but better!" it will probably turn out insecure, underwhelming, and will go against the the fundamental principles that give Bitcoin the potential to be as impactful to banking, law and society as the Internet has been to media, communication, and commerce.

Bitcoin is an open project, with a sometimes-inefficient-but-open community process that always pushes for the fundamentals of decentralization, robustness, and innovation. But Bitcoin isn't a single installation, it's a living, working system that presents a $6.5Bn bounty for anyone who can break it. This high valuation causes a great deal of caution and testing before anything is deployed on its network, but we can be quite sure that many many people have been thinking about how they can break the system and have so far failed.

Ethereum and Ripple are probably the two next largest networks in the $100's of millions range (Etherium is currently $400M+) - Ripple with a fundamentally different consensus protocol and Ethereum with interesting and useful features. If you can't do certain transactions or develop certain application on Bitcoin, I can see why Ripple or Ethereum might be interesting. If you're serious about security and stability -- and you should be -- Bitcoin is almost the only choice with the largest bounty, and largest community, with the most practical modern experience deploying to a broad and active network in the real world.

Many people who are so excited about the potential applications that they have ignored completely the architecture of the system on which they would run. Just as many Internet companies assume that the Internet works on its own, they assume that all blockchains are the same and work, but blockchain technology is not as mature as the Internet where you can almost get away with that. They often view the people working on Bitcoin as a bunch of crazy Libertarians who came up with a cool idea but believe that a bunch of hired guns could put the same thing together given enough money. Governments and banks are launching all kind of plans without enough thought going into how they're actually going to build the secure ledger.

I fear that we'll build something that at the application layer looks like what Bitcoin and the Blockchain promised, but under the hood is just the same old transaction system with no interoperability, no distributed system, no trustless networks, no extensibility, no open innovation, nothing except maybe a bit of efficiency increased from new technology.

We have a good example of that. One of the key benefits of the Internet was that the open protocols allowed innovation and competition at EVERY layer with each layer properly sandwiched between standards developed by the community. This drove costs down and innovation up. By the time we got around to building the mobile web, we lost sight (or control) of our principles and let the mobile operators build the network. That's why on the fixed-line Internet you don't worry about data costs, but when you travel over a national border, a "normal" Internet experience on mobile will probably cost more than your rent. Mobile Internet "feels" like the Internet, but it's an ugly and distorted copy of it with monopoly-like systems at many layers. This is exactly what happens when we let the application layer drag the architecture along in a kludgy and unprincipled way.

Lastly, but most importantly, we're burning out those developers who we most need to be focused on the code and the architecture. Many are dropping out or threatening to drop out. Many are completely discouraged and depleted by the public debate. Even if you believe that we will eventually have a new generation of financial cryptographers, you can't train them without this community. We have many smart people on all sides of this debate and I think that most of them are doing what they are doing with good intentions. However, those of us on the sidelines fanning the flames, making uninformed and provocative statements and fundamentally disrespecting and undervaluing the contribution of the Bitcoin community to the past, present and future of this possibly world-changing innovation, are doing harm.

I've been sitting back quietly hoping that things would just calm down, and they might eventually. But I see more and more misinformation and hype with "Blockchain" being reduced to the same useless suitcase words that "IoT" and "The Cloud" have become and it makes me sad and a bit mad.

I've decided to spend the next chunk of time trying to counteract or balance some of the most misguided stuff that I'm seeing in areas that will have an impact on our future. It feels like while the Bitcoin Core development community is robust, the ecosystem of stakeholders and the understanding of how decisions are made and information is shared is still fragile and vulnerable. I fear that the communication and now emotional rift between various key groups and individuals is wide right now, but I believe it's imperative that we try to bring the community together and focus on executing on a shared technical plan that represents our best shot at broad consensus from both a technical and a practical perspective. Hopefully, we can build a community and a process that is more robust and can handle the inevitable disagreements in the future in a less emotional and more technical and operational way.

33 Comments

One of the best article about bitcoin that i have ever read and describe exactly what bitcoin is

I think that both the big business face of bitcoin and the p2p (most notably http://bit.do/buybtc) will play off of one another and are necessary for the healthy future of bitcoin. Hopefully the feds don't stamp out anonymous exchanges. I do like http://bit.do/Uphold and http://bit.do/Coinbase although they just aren't for everyone (and availability is really just North America and Europe at this point anyway).

Thanks for the thoughtful post, Joi. I agree that harm is being done to/within the community, and the entire ecosystem needs to be more mindful of our long-term success.

Hi Joi,

I believe you are missing a very important point in your article. Many of those arguing for large blocks and arguing that a hard fork would not do immeasurable market damage, as well as that more than one management structure should be involved in the development of reference implementations for an open system, have been studying the associated technologies and understand both the Bitcoin code and associated systems quite well.

You argue that opposing Core's roadmap is a result of technical ignorance, but such arguments can scarcely be made against the positions of people like Mike Hearn and Gavin Andresen, who are developers, as well as innumerable other users and academics.

The position that Bitcoin can scale and fork without becoming less decentralized is far more of a legitimate position than you imply in this post, and Core's efforts to marginalize such a position are also more substantial than you address, and continue to be unproductive to meaningful compromise and progress. For example, the refusal to denounce the blatant ideological and political censorship of the two largest Bitcoin communities on the web is a leadership failure which is unacceptable if we are to only have one reference "implementation" and "community".

I also disagree on the point about dev scarcity. Financial crypto systems are complicated, but not outside the reach of most with a background in applied crypto or distributed systems. The devs will come if there is a financial incentive for them to do so, as they have in the past.

could you make your comment more constructive or at least substantiate your position because i dont quite understand what your point is other than to make shallow divisive assertion, although your wording seemed "sophisticated and intelligent." i thought joi made an excellent unbiased view of the bitcoin situation and imo your comments sounded more divisive and damaging to the bitcoin community without much substance. thanks.
s. choate

Hi S. Choate,

Unfortunately I do not have time to summarize the whole debate, with which you are clearly unfamiliar. My argument was pointing out that Joi said several things in his article that are not correct. Let me make it more concrete for you.

"If you try to build "something like Bitcoin but better!" it will probably turn out insecure, underwhelming, and will go against the the fundamental principles that give Bitcoin the potential to be as impactful to banking, law and society as the Internet has been to media, communication, and commerce."

The debate here is about 2MB blocks. Arguing that a Bitcoin with 2MB blocks would be "insecure, underwhelming, and will go against the the fundamental principles that give Bitcoin the potential to be as impactful to banking, law and society as the Internet has been to media, communication, and commerce" is simply not a position grounded in fact. See one technical argument here: http://gavinandresen.ninja/are-bigger-blocks-better-for-bigger-miners but feel free to Google "2mb blocks data" for more sources.


Another incorrect statement: "They're more like artists, scientists and precision engineers who have built a shared culture and language. To look for another group of people to do what they do would be like asking web designers to launch a space shuttle. You can't FIRE a community and, statistically speaking, the people working on the Bitcoin ARE the community."

As I said, any developer with distributed systems background (and there are thousands of such devs currently working on consensus, hell thousands working on efficiently implementing Paxos-like datastores alone), or with an applied cryptography or systems background can easily be trained to reach a full understanding of Bitcoin through the reading of a few papers, the codebase, the extensions/BIPs since the original whitepaper, and some key mailing list discussions and history. Training such a developer would take under 6 months, and will happen if the financial incentive is there. There is no scarcity of developers in Bitcoin, and you definitely can "fire" people in an open source context - simply don't use their software.


Another thing I take issue with: "Many people who are so excited about the potential applications that they have ignored completely the architecture of the system on which they would run. Just as many Internet companies assume that the Internet works on its own, they assume that all blockchains are the same and work, but blockchain technology is not as mature as the Internet where you can almost get away with that. They often view the people working on Bitcoin as a bunch of crazy Libertarians who came up with a cool idea but believe that a bunch of hired guns could put the same thing together given enough money. Governments and banks are launching all kind of plans without enough thought going into how they're actually going to build the secure ledger."

Many of the people Joi is talking about who are arguing for a "different" Bitcoin (I would argue it is not a different Bitcoin as up to 32MB blocks are compatible with the genesis client, making such a Bitcoin consistent with the original vision of a p2p payment system) ARE highly technical developers, have been part of the community, have written code in Bitcoin, and understand the architecture of the system quite well. To argue that the people wanting change do not understand the architecture of the system is simply not true. Case in point are the names I mentioned, Gavin Andresen and Mike Hearn, though there are *many* others spanning business leaders, economists, academics, and developers. To argue that all of these people do not understand Bitcoin is insanely reductionist and quite simply incorrect.


Joi also makes the point that "I fear that the communication and now emotional rift between various key groups and individuals is wide right now, but I believe it's imperative that we try to bring the community together and focus on executing on a shared technical plan that represents our best shot at broad consensus from both a technical and a practical perspective."

This is almost infuriating to me, as I would love to communicate and discuss the technical merits of various proposals, which you cannot do on the two current largest Bitcoin communities (bitcointalk and r/Bitcoin). In these news sources, moderation clearly forbids the promotion of any non-Core software, and bans those who discuss such software. This biased, censored, and curated discussion (before you even get into the 70+kb hacky CSS and vote order tricks used on reddit to enforce theymos's censorship) is unproductive and is exactly what's splitting the community apart. Core is a big part of this problem, as they deny the existence of the censorship (Adam Back, Greg Maxwell, Luke-Jr have all posted on reddit expressing their opinion that the censorship is a myth in spite of overwhelming evidence, and continue to knowingly incorrectly refer to it as moderation) and thereby support the continuing exodus of those with politically opposing opinions and shut down all potential avenues of discussion and compromise not controlled by them.


Lastly, I make the original point in my comment that I do not believe that hard forks are unsafe or would cause any security problems in Bitcoin. I do not believe 2MB blocks would cause any decrease in decentralization. These arguments have been hashed out thousands of times, for example here: http://gavinandresen.ninja/minority-branches (I agree with the majority of this post), so I really don't feel like repeating them here for you.

Calling dissenting thought divisive is an old strategy for shutting down dissent. My post is not divisive: I believe we have community consensus on an increase of the max block limit, I believe we can do it safely, and I don't believe the people advocating for this are ignorant of the architecture of Bitcoin.


Hope that clears things up for you.

Good post. I agree.

One correction: "share then with" => "share them with".

Thanks! Fixed.

great post, joi

one thing i have been reflecting on -- and would love your pov -- are the key learnings from the IETF and similar organizations constituted at the birth of the Internet, that can potentially be applied to the Bitcoin community today?

Many smart technical people want larger blocks not out of technical ignorance, but because they disagree with Core on economics and social factors.

The biggest mistake I see on the Core side is the belief that because Core are experts on Bitcoin technology, we should privilege their economic beliefs over the economic beliefs of other smart people.

A good example is Gavin and Jeff Garzik. Obviously they understand the technical issues, but they disagree with Core about how bad high fees are, and how disruptive hard forks would be.

Thank you for your work in the space Joi. We'll be sharing this with our immediate community of clients.

We see a lot of noise coming from both mainstream media and corporates wanting to jump on the 'blockchain' bandwagon without understanding what it actually means. We're convinced that a lot of it is subversive PR campaigns designed to make banks and financial institutions buy into expensive contracts from 'blockchain' companies. Do you have any suspicions of subversive activities within both the Bitcoin community and the wider community of 'Bitcoin bad, blockchain good' believers?

"Ethereum and Ripple are probably the two next largest networks in the $100M-ish range .."

Etheream is over $400M in market cap. This misinformation about other non-bitcoin projects. I would expect a more fair assessment from respected organizations like MIT. This one is too biased and in faour of bitcoin.

That's a fair criticism. I should have said $400 or 100's of millions.

Edited the article to reflect this.

The huge downside of the bitcoin blockchain is its lack of privacy protection. That will deter its currency value because it destroys fungibility. This problem is much more severe than any security issues related to transactional integrity, which can be fixed. Lack of privacy protection is not feasibly fixable.

There are a number of ideas including things like Zcash or Enigma from the Media Lab. I agree that it's an important concern but I think it's possible to imagine some solutions.

I have a preferred solution: Monero, aka XMR. It is a cryptocurrency in operation since April of 2014 which offers an opaque blockchain, and sound privacy assurances based on the well-understood cryptography of ring signatures. There are also many snake-oil crypto offerings which I do not consider to be positive contributions to this space.

I apologize i have not shown up for the community until now. I designed the platform in 2007 that Sotoshi built for me in 2008 and now for you. This platform needs to get through consensus for a final decision on applying a scalible code. I prefer a 4mb to 8mb scale. It can scale only so high. Also mr. Ito is right and wrong. Sotoshi and i picked Gaven to run the platform and to follow our well thought out theory of rules. Those rules must be followed today! Without our Vision, bitcoin means nothing. Therefore rules are rules followed by a select group of core developers. Developers watch each other by distrust to complete the task. I am hearing that core is working for big $$ complanies to push their agenda. That would be a conflict of interest. Must stay true to the platform first and formost. If those companies are pushing too hard for scalability too fast. Drop them as they are not supposed to have ANY control period. REMEMBER! BITCOIN IS STILL JUST A EXPERIMENT! Sotoshi and I and core have backdoor keys if Bitcoin needs to be--shut off, completely. We will see our vision through as we theorized it to work towards great innovation. Core developers have to agree with each other to implement code. The other communities work to build the code, and vote for a final decision on changes to be made to the platform. 75% vote. I picked 75% for the rules and that is the way it is This platform has to stay peer to peer sharing, or our vision is lost and so is Bitcoin. Let me make this clear- Bitcoin is run alongside the Dollar. It is not to take over the dollar. If the dollar fails, bitcoin is to prop up a economy until agreements are made to print more tangible dollars. Sotoshi and i agreed that tangible U.S. Dollars must be kept in circulation. Do not out the dollar for a cashless society or Bitcoin is dead too and will turn corrupt too just like fiat. The whole community and developers must follow Sotoshi protocols. If you want to make changes like Mr. Hearn, leave Bitcoin and build your own platform, separate from bitcoin. Thanks, Bitcoin Founder2433

Hi Jim I would like to do an interview with you, would you be down?

Hi Joi,

I agree with the sentiments expressed in the post but (there is always a but otherwise it is not worth posting a comment) the BITCION Core is a small group of highly talented, committed and passionate people and some of the members operate as if the bitcoin infrastructure that they have built is some sort of child which cannot be tampered with, without their consent.

The infrastructure is just that; a piece of very fine and uniquely crafted infrastructure that can be best described as OTT technology. The ability to progress the blockchain opportunities does need more people who will have the same passion as the BITCOIN Core. The involvement of big business I think at this stage is best described at exploratory, much like the early days of LINUX.

I am not as pessimistic as some have expressed. The principal issue with blockchains is that there is too much hype about to what it can be applied. The real issue as I see it is that problems need to be properly analysed to identify if and only if a distributed ledger can assist in solving the problem.

It appears to me that most of the financial sector is looking at blockchain as being some sort of panacea on a trial and error basis which in the end will waste a lot of resources, money and talented passionate software engineers who could have applied their skills in a more productive manner.

Wonderful post, joi

I hope the core developers to be able to use the Bitcoin and Blockchain for purposes other than capitalism. I think we should not be used these technologies to the government and a joint‐stock company.

I think we are thinking we can take to what the technology,but we should consider whether to take the technology for what.

So,I want to take technology for human evolution or protect the freedom of the individual.

While I don't disagree with anything in this article, it's important to remember that what has been asked of the lead 'Core' devs is basically the changing of one number in the code (to increase the block size *limit*). They are basically refusing to do this, for reasons that can be debated.

Whatever those reasons are, one needs to be able to look at this as a relatively minor, yet important, example. What if those currently leading development really were taking things in the wrong direction, for any rational onlooker to easily determine? What would/should we do then? There must be a plan B. That plan B, the only plan B, is in the form of miners voting with different alternative code bases.

>>Even if you believe that we will eventually have a new generation of financial cryptographers, you can't train them without this community.

Genuine question: can the skills that are needed to be a bitcoin developer be achieved through self study? Or is an apprenticeship the best way to learn?

I think you can self-study a lot of the theory and you could even try to read the code, but since there isn't really a "specification" and that the code itself is sort of the specification, you have to get your head around the code. It's much easier to "join the community" and have them help you. Having said that, my understanding is that the community is, relatively speaking, helpful to people who have the requisite skills and patience and are sincerely interested in learning and contributing.

My point about the importance of the community is really this. Of course a bunch of CS students can read the code and learn the theory, but operationally, it's much easier to get on the mailing lists and IRC and work together with the existing developers who will help you learn. With an open source project, there is a pathway starting with code review and other things before you're writing core code.

Joi, you were an early investor in GuardTime's blockchain based KSI techology. Now that a few years has passed, what are your thoughts on their technology?

When we started the Digital Currency Initiative at MIT I divested all of my investments in "blockchain-related" companies so I sold my GuardTime shares. Therefore, I'm no longer an investor. However, if it weren't for that I'd still be an investor.

I think it's solid technology and has some interesting applications. I think the key here is to apply appropriate technologies to the right problems and there are a lot of problems that KSI solves that don't make sense to use Bitcoin Blockchain for.

" it's a living, working system that presents a $6.5Bn bounty for anyone who can break it. "

There's no bounty in destroying the value of bitcoin, maybe some, but certainly not in bitcoin.

Joi--

You are the one who is misinformed. The core developers became employees of block stream Inc and now have a conflict of interest.

The community is not "misinformed" and the Classic team is not made up of weak developers.

Your article is just a regurgitation of Core propaganda without any insight or understanding of the situation.

You're arguing for centralization and a closed Bitcoin by endorsing core.

You discredit yourself by publishing this.

This is very heartening. If money can't buy this, that surely will keep it very pure and free. I think Bitcoin is just the first step, a fairly successful experiment. It will probably linger on, but what needs to happen (IMHO) is that this "core group" should just start fresh, take the best of Bitcoin's salvagable code and whatevers and make something that isn't ultimately just a beta version...a true real world cryptocurrency.

Not only is this needed, it would also be a big middle finger towards those who wish to manipulate these core guys and what they are doing. I mean, I'm 10000000000% sure that there are people who would pay their room and board during a one year term to hash it all out in the South of France or somewhere, and do it right.

Joi- unless the code is a mess, it should not take a lot of interaction with the core team to decipher it. There are individuals (such as myself) who exist and who are completely off the radar of any involved in this "community" who possess the requisite skill set to read, refactor & maintain the existing or future codebases (once again unless they are such a mess as to seem almost intentionally obfuscated [and even then everything is possible with time]).

Very impressive article!

It is not accurate to describe the scaling debate as one between well-funded businesses and innocent core developers.

Planning for the hard fork to raise MAX_BLOCK_SIZE began in 2011.

Near the end of 2012, however, a group of agitators began raising doubts about whether or not Bitcoin should scale at all.

The were successful in driving out all opposition via attrition and taking control over the reference client (now called Bitcoin Core).

They are in no way "caught off guard" by the current situation - all of this was predicted years ago and they chose to pursue this path deliberately.

Now they are trying to re-write history but that shouldn't work since all the conversations are documented and anyone can see for themselves what's been happening for several years.

Bitcoin Core / Blockstream choose to create this situation, knowing what would be the result.

https://bitconnect.co/bitcoin-news/175/bitcoin-vs-gold-security/
Gold is not as Secure as Bitcoin - Bitcoin Foundation Exec. Director

​The public perception of Bitcoin has never been very good. When something good happens within Bitcoin, it is not mentioned as often or as prominently as when something unfortunate happens in relation to the digital currency. The mainstream media’s spotty coverage is the main reason for this credibility gap.

A recent televised interview on RT’s “Sophie & Co.,” hosted by Sophie Shevardnadze, is a classic example of the uphill battle Bitcoin has with its skewed public perception. Today, we’ll provide some highlights and lowlights from Shevardnadze’s interview of The Bitcoin Foundation’s Bruce Fenton, who looks to provide an update to RT’s viewers on Bitcoin and its progress.

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