Bitcoin Evolution – About trust and the need for security

What is money actually? A universal commodity whose value is ultimately based on trust, in order to constantly receive an expected countervalue for it. That’s how you could define it briefly and concisely. We are all aware that the monetary system is a construct designed to facilitate trade by creating a universal currency.

But this universal currency is not a purely financial object that has arisen from nothing. It is Bitcoin Evolution not only politically regulated, it even fulfils political purposes. So it seems as if it is a classic feature of currencies that people are inevitably responsible for their control, monitoring and regulation. After all, this is how it has been remembered over long periods of history.

Bitcoin Evolution and the tuture

But what role do digital currencies play in our classic image of currencies and financial systems? They do not have a central responsible person on whose decisions one can rely, at best they can be regulated in their use. The basis of such a system Bitcoin Evolution is technically laid, once erected and carved in stone. A digital currency is usually resistant to political decisions that cause inflation or deflation. They act completely autonomously, because nobody has power over them. Or do they?

Suppose digital currencies are completely independent of any human decisions (in reality, however, developers of the system have some influence). That would mean: Every participant of the system can do what he is inclined to do. There are no restrictions, no taxes, Bitcoin Evolution no monitoring in the classical sense, but also one thing: security.

For one advantage that the classic political financial systems offer us is „security“. Political decision-makers have the accountability and responsibility to keep the system running (at least apparently). The demise of a financial system or the expropriation of many people means a loss of power for these political instruments. They are therefore interested in creating the impression that the financial systems are stable. The fact that the actual guarantee of security and responsibility is seldom successful becomes visible again every year in the form of a financial upheaval. Extensive instruments of power can at least ensure that losses are not realised by the individual as such.

Political money systems give us a certain feeling: security! Most people always bear in mind the idea of the delegation of responsibility: „If something so bad happens, they will attack in time“. Although we know that we are facing an economic crisis at a more onlinebetrug or less even pace, indirect burdens such as cold progression or rising inflation are not as dramatic for many people as a total loss of wealth, which can be seen on the bank statement.

If we compare the digital systems again with the classic monetary systems, we find that in the world of digital currencies there is no political instrument to which we can transfer our responsibility. The user alone is responsible for all his actions. If he loses his money, it is irretrievably gone. On the other hand, there are possibilities open to them that are unimaginable in classical financial systems, such as the greatest possible anonymity.

If one starts from a certain image of man, then people are very careful to shy away from responsibility and to place it in other hands. People want maximum safety with minimum responsibility. That is why the plateau on which crypto currencies are written is hardening: There are some people who are willing to give up their need for security in favor of the advantages of a digital payment system. But most people are still sceptical, fearing the new technology to some extent. It brings risks – that cannot be denied. And these risks seem to outweigh the benefits in most cases. That’s how it was with the invention of the railroad back then, and that’s how it is with digital currencies today. Until one has slowly but surely reached a point and the system has become so big that one can trust it.

Battle of the visionaries – Vitalik Buterin criticizes Dan Larimer’s vision EOS

On Reddit, recently Vitalik Buterin, the head behind Ethereum, made a critical statement about EOS, a statement that did not have to wait long for an answer from Dan Larimer.

EOS has often been called the new Ethereum in various circles. BTC-ECHO has also reported on EOS as part of the ‚New Coins on the Block‘ series, but without using terms such as ‚ethereal killer‘.

Now the Ethereum subreddite on Reddit posed a rather offensive question:

The team behind EOS claims that the Delegated Proof of Stake technology behind EOS would be better than Ethereum and that therefore Ethereum can never execute as many transactions as EOS. In addition, Ethereum should not be able to use the virtual machine behind EOS, as all the dapps on the Ethereum blockchain would then no longer work. Are these accusations true and has anyone from Ethereum commented on them themselves?

The answer was not from anyone, but from Vitalik Buterin herself, the most famous person behind Ethereum.

With regard to the claim that EOS could execute significantly more transactions, he pointed out that this scalability is realized by relying on a small number of master nodes – and therefore a strong centralization. In addition, technical details such as Merkle proofs are being abolished, so that a normal user hardly has a chance to check the execution of transactions.
Vitalik Buterin also criticizes the concept of Delegated Proof of Stake. This consensus mechanism wants to maintain decentralisation via an electoral mechanism. According to Vitalik, there are several problems here. On the one hand, voter turnout is low; on the other hand, bagholders – and not users – determine the future of a blockchain.
Finally, he goes into another unique selling point: The lack of transaction fees in EOS, as with Steem, another project by Dan Larimer, is compensated by a stake-limited number of transactions per second. This means that a potential EOS user has to create a large stake in order to initiate many transactions efficiently. In this way, fewer wealthy people are ultimately excluded from the system.
Dan Larimer commented on these points on Steem. He addresses the three points and, from his point of view, describes how the problems mentioned – with regard to Steem – are none. In his view, non-voters are as much a certainty as voters. If someone wants to submit a negative proposal for the Delegated Proof of Stake system, he believes there will still be enough voters whose large stake will lead them to use their right to vote in their favour.

Regarding the poorer people discouraged from using a toll-free system, he replies that this problem exists anyway: The effort someone has to put in to exchange Fiat for any crypto currency at all is so high that it would only pay for itself from an investment of a hundred US dollars. In this context, he also refers to Steem, a network that has existed for some time with toll-free transactions.

Dan Larimer concludes with a criticism of Casper, the proof of stake consensus planned for Ethereum, referring to an analysis he had already made two years ago. In his opinion, Casper also leads to a centralization. This criticism was further deepened by him.

Vitalik, of course, did not let the statements stand like this. Thus he went again into the individual points on the part of Dan Larimer and criticized that the criticism of Casper addresses points, which were current two years ago. Since then, however, Casper has continued to develop.

The debate is certainly not over. What is striking in a positive light is that both Vitalik and Dan Larimer focus largely on factual arguments. While other steemers and editors write ad-hominem attacks, both look at the technical details – and base their criticism and defense on them. From this point of view the reading of this exchange of blows is worth reading for everyone – one learns a lot about attack vectors on decentralized systems and about consensus mechanisms and the associated difficulties.