Challenge of Mining Centralization Unveils Bitcoin’s Elegant …

Last year, growing problems of Bitcoin mining centralization came to light with the controversy of an AsicBoost scandal. As a largely centralized hash rate began to threaten the software’s magical property, concerns were raised that incentives at the crux of Bitcoin’s game theory had broken away.

Now, the power of miners, harnessed by economic incentives, escaped accountability by attacking Bitcoin’s SHA 2 hashcash and exploiting it. This further gained advantage through vulnerability in the network’s interface with the old world of industrial infrastructure and patents.

In facing the increasing power of hardware manufacturers, the idea emerged to make changes in proof of work to fix incentives. Some see such moves to be dangerous, as it could devastate the security of the network and create a contentious hard fork. Others are more pessimistic about ASIC-resistant algorithms, due to the flexibility of hardware engineers and manufacturers’ ability to control hardware production. This challenge that cannot simply be solved technically brings us a unique opportunity to explore this innovation and discover the technology’s elegant design.

Money as a Technology of Cooperation

The invention of Bitcoin arrived through the accumulative efforts of many minds. Before Satoshi Nakamoto shared the vision of peer-to-peer digital cash in the white paper, there were pioneers who stepped into this uncharted territory. Nick Szabo, a legal scholar and cryptographer, with his creation of bit gold inspired this breakthrough of computer science.

In the paper Shelling Out, the Origins of Money, published in 2002, Szabo traveled into the ancient past to trace precursors of money used by our ancestors. By gaining the insight of evolutionary biologist Richard Dawkins who saw money as a “formal token of delayed reciprocal altruism,” Szabo recognized the role of money in providing humans’ unique evolutionary advantage. Describing it as a “technology of cooperation,” he noted how early forms of money, such as the shells of clams, solved the problem of the risk of cheating in the exchange of favor, where reciprocity wouldn’t be made simultaneously.

Now, in this digital age and with the birth of Bitcoin, this tool for cooperation is replicated online. Satoshi, through engaging computer machines to work on mathematical puzzles of computation, found a way to check man’s selfishness that takes advantage of others’ good will. Bitcoin’s consensus algorithm enforces sets of rules across a network, by aligning incentives of all players and encouraging each to overcome selfish tendencies that prevent cooperation with a careful balance of risk and reward.

Puzzle of Altruism

The genius of Bitcoin’s protocol was developed on this understanding of the origin of money that is deeply tied to evolutionary forces within mankind. At the core of this technology lies knowledge of human nature informed by evolutionary biology. Dawkins, who authored the influential book, “The Selfish Gene” renewed the theory of evolution by putting genes rather than individuals at the center. With the term “the selfish gene,” he explained how “a gene that didn’t look after its own interests would not survive.” With this gene’s-eye view of life, Dawkins appeared to have solved part of the riddle of human nature. Yet, he stumbled upon another when he recognized acts of kindness in nature. Altruism has been one of the greatest puzzles for many biologists.

Dawkins asked, “How can selfish genes support kindness?” Charles Darwin’s theory of natural selection offered no incentive for organisms to help others. Dawkins went on, “If genes are striving selfishly to make more copies of themselves, how can a gene achieve this selfish objective by making their bearers act altruistically?” He contemplated how, in the Darwinian struggle for existence, kindness toward others seemed to counter this programming.

Partial explanations were provided in the idea of kin selection. Inclusive fitness theory argues the reason for such behavior is due to a sharing of large percentages of genes among close relatives. Another is the idea of reciprocal altruism used to explain costly cooperation between non-relatives, with a tit-for-tat strategy of “you scratch my back and I scratch yours.” Here, altruism is widely considered by biologists to be part of a survival game for genes, and nature has shown that the genes that return favor are more likely to survive. Yet, Dawkins pondered that, when it comes to humans, there seems to be something more that goes beyond what these theories can explain, for helping occurs even among those who are not close relatives and is given to complete strangers who don’t return favors.

Paradox of Human Nature

In recent years, examples of altruistic acts emerged on the internet with the waves of whistleblowers. From WikiLeaks founder Julian Assange to Chelsea Manning and Edward Snowden, we have seen individuals that acted…

Article Source…