Author: Ming Guo
Translation: Claire Wu
Author: Ming Guo
Translation: Claire Wu
The author of this article, Ming Guo, is the co-founder of the block chain star project Soteria.
Soteria founder: Why Bitcoin is ahead of our time (1)
Soteria founder: Why Bitcoin is ahead of our time (2)
Decentralization, our understanding of this concept was wrong from the beginning, but this is not the fault of Bitcoin, the mistake is entirely from ourselves. Since the origin of human civilization, we have treated everyone and everything in a centralized way, and now we treat decentralization in a centralized way as always.
This perception not only has a wide-ranging impact on the understanding of alien technology like Bitcoin, but also creates a fundamental flaw in our world governance, and also affects the feasible path to change the future world. We’ll explore all of the above in detail later, but for now let’s focus on the study of Bitcoin and cryptocurrencies.
So far, we are still in a centralized world. Bitcoin was designed as a decentralized peer-to-peer electronic cash system (according to a paper by Satoshi Nakamoto). Whether in business or social welfare and charity, when we try to integrate Bitcoin or other cryptocurrencies into the entire system, we try to make it a decentralized system. Have we really succeeded? Obviously not!
As mentioned earlier, when we forcibly integrate an alien technology into an existing system, this new system will not become a part of a shining alien technology, it can be said to be far away. It can even be understood that most of the decentralized applications built using cryptocurrency are unnecessary, but in fact it is just a kind of "cargo cult" (Cargo Cult) [1]. This cult in the cryptocurrency space is a step backwards in our understanding of alien technologies like Bitcoin and cryptocurrencies. We cannot put cryptocurrency into the system and call it a decentralized application (or system/business scenario).
The real world is multi-dimensional, and some dimensions cannot be reduced based on different operating environments. When one wants to design and optimize only one or more specific dimensions, other seemingly redundant dimensions still creep in. Pretending that these problems don't exist will only damage your (system) design.
This phenomenon is common in cryptocurrency (or blockchain) systems. The main paradox by far is that for most people, they think that the dimension of decentralization is the dimension of cryptocurrency or blockchain, however, no matter how much you simplify and purify your design, once your system touches the real world It will get dirty, and other dimensions that you don't want will sneak in, as we said before; since these dimensions that are mixed in are likely to be centralized dimensions, boom! Your "decentralized" design with a shiny cryptocurrency component suddenly collapses into a generic centralized system. So what's the point? You might as well design an ordinary centralized system from the beginning and be done!
A good example is cryptocurrency exchanges such as Mt. Gox and its successful successors.
Users of cryptocurrency exchanges must realize that trading through an exchange is completely different from conducting peer-to-peer transactions directly with cryptocurrency. The nature of cryptocurrencies and cryptocurrency exchanges are very different.
Cryptocurrency exchanges do not share many of the characteristics of cryptocurrencies such as Bitcoin: decentralized peer-to-peer systems, censorship resistance, trustless consensus, etc. Instead, these exchanges are very centralized, the exact opposite of cryptocurrencies like Bitcoin.
So, what are the characteristics of our cherished cryptocurrencies?
1. Decentralization: Cryptocurrency exchanges are even more centralized than traditional stock exchanges.
2. Anti-censorship: Even without KYC/AML certification, most cryptocurrency exchanges have absolute control over customers.
3. Trustless consensus: Cryptocurrency exchanges, like other centralized systems, are based entirely on trust and restrict user access. You can only use their services if you are allowed by the database, there is no privacy at all. Without privacy, you completely lose control and ownership over your assets.
In other words, the desirable features of Bitcoin and cryptocurrencies will be lost on cryptocurrency exchanges. These exchanges and cryptocurrencies are designed to be in opposition to each other.
At least, traditional stock exchanges are bound by laws and regulations developed over decades, and the two functions of custody and trading must be separated. People trust licensed institutions that are centralized but closely regulated. Cryptocurrency exchanges, on the other hand, are freaks that routinely cheat users with impunity.
(to be continued)
To sum up, Bitcoin and cryptocurrencies have inherently good characteristics of decentralization, however, once they are combined and used in the real world we live in, they will be distorted. When Bitcoin or cryptocurrency inevitably adds different dimensions of centralized features in our real world, such as cryptocurrency exchanges, it is impossible for them to retain decentralized features. A centralized world will swallow the decentralized nature of cryptocurrencies. As mentioned earlier, Bitcoin and decentralized cryptocurrencies are not really compatible with our world.
(to be continued)『Bitcoinis Alien Technology Part 2』
