The Center For Gaslighting About Blockchains

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On March 10^th 2022, as Bitcoin recorded a 43% loss from its peak the previous November, and 8 weeks before Terra/Luna crashed, driving the loss to 76%, Princeton launched the Center for the Decentralization of Power Through Blockchain Technology.

A year later I am laughing as I read Francesca Maglione’s Princeton Says Crypto Chaos Helps Justify Its Blockchain Center describing their desperate attempts to spin this as a good move. Below the fold I pour scorn on this outbreak of "blockchain is the answer, now what was the question?".

This is from Princeton's press release announcing the launch (my emphasis):

The initiative received initial funding from four alumni who are leaders in technology, investing and blockchain. The donors are: Peter L. Briger, Jr., a 1986 graduate and principal and co-chief executive officer of Fortress Investment Group; Joseph M. Lubin, a 1987 graduate and a co-founder of the blockchain and cryptocurrency platform Ethereum and CEO and founder of ConsenSys, a blockchain company; Daniel W. Morehead, a 1987 graduate and founder and chief executive officer of Pantera Capital; and Michael E. Novogratz, a 1987 graduate and chief executive officer of Galaxy Investment Partners.

Fortress is a diversified investment fund, but Pantera is a cryptocurrency fund.

Maglione notes:

A little less than a year ago, Princeton University launched a center devoted to blockchain technology, backed by a $20 million donation – and a lot of hype – from former students and crypto advocates like billionaire Mike Novogratz.
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The university said its Center for the Decentralization of Power Through Blockchain Technology – or DeCenter, for short — was founded to explore the potential benefits and pitfalls of blockchain.

Initial funding of $20M comes from four people heavily invested in blockchain technology and cryptocurrences. Clearly, the center will need to continually raise more money. This is, after all, an Ivy League university and raising money is their raison d'etre. This money won't be coming from "Big No-coin", because no-coiners haven't ripped the suckers off for many millions of dollars. It will have to come from other crypto-bros, so I think we all knew from the start what the Center's opinion as to the "potential benefits and pitfalls of blockchain" was going to be.

It wasn't going to be a great way to ensure that the crypto-bros ponied up the next $20M to point out that the research literature showed that blockchain technology was:

• by design, slower, less efficient and more expensive than equivalent alternatives,
• at scale, incapable of delivering decentralization either in theory or in practice,
• the cause of vast externalities.

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The objective nature of the Center's mission is even belied by its name. The "Center for the Decentralization of Power Through Blockchain Technology" makes an assertion that was not true as Bitcoin launched, when for 2009 it was controlled by Satoshi Nakamoto, has never been true, and is still not true today, when as I write three pools mine 2/3 of the blocks. The reason has been obvious for nearly a decade. That blockchain technology provides "decentralization" is the core element of the gaslighting to which the Center is devoted.

The center is led by two emminent faculty members, the Dean of Engineering and Applied Science and the Professor of Computer Science, Technology, and Societal Change, the "co-founder of a blockchain-based company". They have no excuse for ignoring the literature, and promulgating BS such as:

“We are at a very early stage in understanding the opportunities and challenges associated with these technologies and their applications,” Singh said. “The decentralization of trust may be just as powerful and transformative as the worldwide web. It may transform existing systems and lead to new applications that we cannot even imagine today, with far-reaching impact for society. We need to be engaged not just in the technology and its uses but also in the economics, governance and policies associated with them, and to do so together with industry. Getting it right will require fundamental, interdisciplinary research, and education, and close engagement with the fast-moving startup community.”

As Molly White points out, we aren't "at a very early stage in understanding the opportunities and challenges". We have almost a decade and a half of experience with Bitcoin, and nearly three decades of experience with the commercial use of a blockchain. It isn't that we don't have experience of the "opportunities and challenges" of the technology, it is that the crypto-bros don't like what the experience teaches us because it gets in the way of ripping off the suckers.

The Center's web site announces its mission thus:

New technologies that provide trust without centralization could transform many aspects of society, including financial, business, and social systems. The Princeton DeCenter examines the most important applications of blockchain, drives interdisciplinary research and education across applications and foundational blockchain technologies, and promotes the development and understanding of the policy, governance, and societal implications of this fast-growing field.

Does that sound like objective research? The Center has hosted some events, but nowhere on the web site is there any trace of actual research output. Why is Princeton lending its brand to an organization that exists to host promotional events for a technology whose only goal is to evade regulation in the interest of fraud and market manipulation? One obvious answer is $20M.

Given all the cryptocurrency companies that have failed since the Center launched, it is no surprise that the Center's co-directors are sounding defensive:

It’s essential for universities to play a major role in the technology development, use cases and societal and ethical implications of blockchain and to harness its powers for good, said Andrea Goldsmith, Princeton’s dean of engineering and applied science one of the co-directors of DeCenter.

“That was my motivation to start this center,” she said in an interview, “and everything that’s happened since we launched it has only validated that this is the case.”
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If anything, Singh said, the events of the past year have made DeCenter’s mission even more important.

“Having a university in the middle of that helps not only convene people and have deep discussions, but also to do the research to really flesh out what is hype, what is not hype, what’s possible, what’s not possible,” Goldsmith said.

But that level of BS is easily beaten by the Center's founders:

Novogratz’s vision for DeCenter hasn’t changed.

“Princeton is a world-class institution,” he said in an email. “We wanted to work with someone who wasn’t a market participant or pressured by short-term views to take an academic look at all aspects of what a decentralized world will look like.”

Note the "wasn't a market participant" for Singh, the "co-founder of a blockchain-based company", and the assumed inevitability of "what a decentralized world will look like". Everyone involved is Talking Their Book.

To be fair, I should note that other Universities have jumped on the bandwagon. For example, Stanford's Center for Blockchain Research, whose mission statement is:

The center's primary mission is to support the thriving ecosystem by developing new technologies needed to advance the field. Beyond its research mission, the center runs an extensive education and outreach program, including on-campus courses, MOOCs, workshops, and conferences for the general blockchain community.

Inevitably Stanford's center is sponsored by a collection of cryptocurrency companies. Like Princeton's, it runs conferences. But unlike Princeton's, Stanford's has been around since 2017, has courses for the students such as CS251 and EE374, and publishes actual research. Importantly, their research is mostly funded from granting agencies not from blockchain individuals and companies, leading to acknowledgements such as:

This work was funded by NSF, DARPA, a grant from ONR, the Simons Foundation, NTT Research, and a Google Cloud Platforms grant.

I am skeptical of the value of the application of their research to the real world, but Stanford has no need to be defensive about its academic quality.