Cryptocurrencies Have Limits

The Economic Limits Of Bitcoin And The Blockchain by Eric Budish is an important analysis of the economics of two kinds of "51% attack" on Bitcoin and other cryptocurrencies, such as those becoming endemic on Bitcoin Gold and other alt-coins:

• A "double spend" attack, in which an attacker spends cryptocurrency to obtain goods, then makes the spend disappear in order to spend the cryptocurrency again.
• A "sabotage" attack, in which short-sellers discredit the cryptocurrency to reduce its value.

Below the fold, some commentary on Budish's paper.

Rate limits

Andrew Marantz writes in Reddit and the Struggle to Detoxify the Internet:

[On 2017's] April Fools’, instead of a parody announcement, Reddit unveiled a genuine social experiment. It was called r/Place, and it was a blank square, a thousand pixels by a thousand pixels. In the beginning, all million pixels were white. Once the experiment started, anyone could change a single pixel, anywhere on the grid, to one of sixteen colors. The only restriction was speed: the algorithm allowed each redditor to alter just one pixel every five minutes. “That way, no one person can take over—it’s too slow,” Josh Wardle, the Reddit product manager in charge of Place, explained. “In order to do anything at scale, they’re gonna have to coöperate."

The r/Place experiment successfully forced coöperation, for example with r/AmericanFlagInPlace drawing a Stars and Stripes, or r/BlackVoid trying to rub out everything:

Toward the end, the square was a dense, colorful tapestry, chaotic and strangely captivating. It was a collage of hundreds of incongruous images: logos of colleges, sports teams, bands, and video-game companies; a transcribed monologue from “Star Wars”; likenesses of He-Man, David Bowie, the “Mona Lisa,” and a former Prime Minister of Finland. In the final hours, shortly before the experiment ended and the image was frozen for posterity, BlackVoid launched a surprise attack on the American flag. A dark fissure tore at the bottom of the flag, then overtook the whole thing. For a few minutes, the center was engulfed in darkness. Then a broad coalition rallied to beat back the Void; the stars and stripes regained their form, and, in the end, the flag was still there.

What is important about the r/Place experiment? Follow me below the fold for an explanation.

Software Heritage Archive Goes Live

June 7^th was a big day for software preservation; it was the formal opening of Software Heritage's archive. Congratulations to Roberto di Cosmo and the team! There's a post on the Software Heritage blog with an overview:

Today, June 7th 2018, we are proud to be back at Unesco headquarters to unveil a major milestone in our roadmap: the grand opening of the doors of the Software Heritage archive to the public (the slides of the presentation are online). You can now look at what we archived, exploring the largest collection of software source code in the world: you can explore the archive right away, via your web browser. If you want to know more, an upcoming post will guide you through all the features that are provided and the internals backing them.

Morane Gruenpeter's Software Preservation: A Stepping Stone for Software Citation is an excellent explanation of the role that Software Heritage's archive plays in enabling researchers to cite software:

In recent years software has become a legitimate product of research gaining more attention from the scholarly ecosystem than ever before, and researchers feel increasingly the need to cite the software they use or produce. Unfortunately, there is no well established best practice for doing this, and in the citations one sees used quite often ephemeral URLs or other identifiers that offer little or no guarantee that the cited software can be found later on.

But for software to be findable, it must have been preserved in the first place: hence software preservation is actually a prerequisite of software citation.

The importance of preserving software, and in particular open source software, is something I've been writing about for nearly a decade. My initial post about the Software Heritage Foundation started:

Back in 2009 I wrote:

who is to say that the corpus of open source is a less important cultural and historical artifact than, say, romance novels.

Back in 2013 I wrote:

Software, and in particular open source software is just as much a cultural production as books, music, movies, plays, TV, newspapers, maps and everything else that research libraries, and in particular the Library of Congress, collect and preserve so that future scholars can understand our society.

Please support this important work by donating to the Software Heritage Foundation.

The Four Most Expensive Words in the English Language

There are currently a number of attempts to deploy a cryptocurrency-based decentralized storage network, including MaidSafe, FileCoin, Sia and others. Distributed storage networks have a long history, and decentralized, peer-to-peer storage networks a somewhat shorter one. None have succeeded; Amazon's S3 and all other successful network storage systems are centralized.

Despite this history, initial coin offerings for these nascent systems have raised incredible amounts of "money", if you believe the heavily manipulated "markets". According to Sir John Templeton the four words are "this time is different". Below the fold I summarize the history, then ask what is different this time, and how expensive is it likely to be?

No-one could have predicted ...

... the threats posed by information technology to civil liberties. But my friend Robert G. Kennedy III came close. In April 1989 he wrote Technological Threats To Civil Liberties. From almost 30 years later it is an amazingly perceptive piece. Here are two samples to encourage you to read the whole thing:

An alarming synergy could occur when debit card data is accessed by connectionist machines (neural networks) for business applications. There are patterns to our behavior (economic and otherwise) of which we ourselves might be unaware; these can be extracted by neural nets without the need for formal rules, models, or a priori knowledge. A net is very, very good at pattern inference and recognition. ... One can see the potential for some truly subtle forms of embezzlement, irresistable invasive advertising keyed to surreptitiously acquired psychological profiles, or consumer fraud on a grand scale, among other things.

and:

An executive I know has told me of an office surveillance/attendance system being installed at his company, along the same lines as home security systems. Commercial versions have been on the market for over a year. It uses interactive badges and scanners, sort of transponders-in-an-ID, to track the location, time, and identity of personnel in a building: sort of an electronic leash. (He confided that it is silly to treat employees as bar-coded merchandise; for my part, I was polite enough not to mention the phrase, "Big Brother".)

As you read, remember that it was written two-and-a-half years before the first US Web page went up (which was around 6^th Dec. 1991).

The Island of Misfit Toys

The Berkman Center's Johnathan Zittrain has a New York Times editorial entitled From Westworld to Best World for the Internet of Things starts:

Last month the F.B.I. issued an urgent warning: Everyone with home internet routers should reboot them to shed them of malware from “foreign cyberactors.”

Below the fold, some details and a critique of  Zittrain’s proposals for improving the IoT.

Cryptographers on Blockchains: Part 2 (updated)

Back in April I wrote Cryptographers on Blockchains; they weren't enthusiastic. It is time for some more of the same, so follow me below the fold.