Bitcoin Self-Regulation
A small fragment of a lecture from the Princeton University course , lecturer - Arvind Narayanan
Now I want to show you another subtle thought, quite complicated, this is a very clear idea of self-regulation, which captured me the first time I met her. I want to share it with you.
What do I mean by self regulation? I'm talking about the complex interaction between three things in Bitcoin. What are these three things?
Let's start with blockchain security . Obviously, we want the blockchain to be safe in order for the bitcoin to be a viable currency, but what is necessary to secure the blockchain? This means that the adversary should not be able to seize the process of consensus. It should not be able to create multiple nodes and capture 50% or more when creating new blocks.
')
When it will be possible? What is needed for this? To do this, you need to have a healthy mining ecosystem consisting mainly of honest, following protocol nodes. This is a necessary security condition of the blockchain.
But what is needed for this? How can we be sure that many small users will invest a large amount of computing power to participate in the competition to solve hash problems? Well, they will only do this when the bitcoin exchange rate is high enough .
Why? Because the nodes are rewarded in Bitcoin, while their expenses are made in dollars, so the value of the currency increases. Especially miners will be interested. But what provides a high and stable value of the currency? This is possible if users in general, people who want to buy bitcoin, believe in the security of the blockchain - because if they believe that an attacker can take over the network at any time, then bitcoin will not have much value as a currency. Thus, we have the interdependence of these three characteristics.
Well, that is, the existence of any of these characteristics is based on the existence of the previous one. So you can drop them, and imagine the beginning, when bitcoin was only created, when none of these three properties existed, when there were no other miners besides who we call Nakamoto, or whoever is the creator of the network that launched the mining program. When bitcoin did not have much value as a currency. When the blockchain was essentially insecure, since there were not enough mining volumes, and anyone could easily capture the whole process. How would you start at this point without having any of these three characteristics to get all three?
This is what I understand by self-regulation. This is a rather complicated process by which Bitcoin as a system acquired all three characteristics independently of each other. And of course this was supported by media attention. Because the more people heard about bitcoin, the more they were interested in mining. And the more they were interested in mining, the more people had confidence in the safety of the blockchain, because there was more mining activity, and so on. And so bitcoin came from the absence of these three properties to the possession at the moment, to a large extent, all three. This is an interesting feature of Bitcoin self-regulation, and each new cryptocurrency that wants to succeed must also somehow solve this task of self-nomination through self-tuning.
Now I want to show you another subtle thought, quite complicated, this is a very clear idea of self-regulation, which captured me the first time I met her. I want to share it with you.
What do I mean by self regulation? I'm talking about the complex interaction between three things in Bitcoin. What are these three things?
Let's start with blockchain security . Obviously, we want the blockchain to be safe in order for the bitcoin to be a viable currency, but what is necessary to secure the blockchain? This means that the adversary should not be able to seize the process of consensus. It should not be able to create multiple nodes and capture 50% or more when creating new blocks.
')
When it will be possible? What is needed for this? To do this, you need to have a healthy mining ecosystem consisting mainly of honest, following protocol nodes. This is a necessary security condition of the blockchain.
But what is needed for this? How can we be sure that many small users will invest a large amount of computing power to participate in the competition to solve hash problems? Well, they will only do this when the bitcoin exchange rate is high enough .
Why? Because the nodes are rewarded in Bitcoin, while their expenses are made in dollars, so the value of the currency increases. Especially miners will be interested. But what provides a high and stable value of the currency? This is possible if users in general, people who want to buy bitcoin, believe in the security of the blockchain - because if they believe that an attacker can take over the network at any time, then bitcoin will not have much value as a currency. Thus, we have the interdependence of these three characteristics.
Well, that is, the existence of any of these characteristics is based on the existence of the previous one. So you can drop them, and imagine the beginning, when bitcoin was only created, when none of these three properties existed, when there were no other miners besides who we call Nakamoto, or whoever is the creator of the network that launched the mining program. When bitcoin did not have much value as a currency. When the blockchain was essentially insecure, since there were not enough mining volumes, and anyone could easily capture the whole process. How would you start at this point without having any of these three characteristics to get all three?
This is what I understand by self-regulation. This is a rather complicated process by which Bitcoin as a system acquired all three characteristics independently of each other. And of course this was supported by media attention. Because the more people heard about bitcoin, the more they were interested in mining. And the more they were interested in mining, the more people had confidence in the safety of the blockchain, because there was more mining activity, and so on. And so bitcoin came from the absence of these three properties to the possession at the moment, to a large extent, all three. This is an interesting feature of Bitcoin self-regulation, and each new cryptocurrency that wants to succeed must also somehow solve this task of self-nomination through self-tuning.
Source: https://habr.com/ru/post/279087/
All Articles