If only audible was free and had nothing but Bitcoin content fear no more the crypto. Konami is here. Alright guys, welcome back to the crypto economy. I am guys Swan the guy who was read more about Bitcoin than anybody else, you know, and we are starting into a two-part episode and we are going to or a series here on the Bitcoin times. This is Alex Anders fat skis really fascinating first volume 2 A ongoing series that it looks like he's doing there's a volume 2 coming out soon and I'm really excited about it will stay on top of this but I really wanted to hit this piece because this is the first volume and it is titled blockchain is dead. Like I said, this is going to be broken up over two episodes and I'm actually just going to save my commentary until the very end. So let's go ahead without further Ado and jump into part one of The Bitcoin times volume 1 Block Chain is dead. The future is on lightning contrarian views Bitcoin networks lightning and more by Alexander's fatzke. Where should we focus this year blockchain? It'll change everything. Everybody's talking about it. The potential applications are endless. We don't want to be left behind what exactly is blockchain also artificial intelligence. Quote what important truth do very few people agree with you on in quote Peter teal. In early 2018. I was on stage talking about how ridiculous blockchains and ico's were my talk was entitled blockchains AOL moment in honor of the complete failure that AOL became and the Magnificent success that quote silly useless slow Network. The internet had become. Some people laughed some got angry but the Smart Ones well, they listened and in the process probably saved themselves a lot of money this year. I'm going to up the ante the word blockchain is still alive. It's just move from the vocabulary of the opportunistic so-called entrepreneurs AKA morons to the other end of the spectrum corporates. Corporates like IBM and JP Morgan who we all know are always late to the party. It takes a little time for the marketing department suffering from fomo to get their message across to the board IE. We need to do something with this blockchain thing. So this year we will probably see some ridiculous Enterprise blockchain stuff appear, but I predict they too will fade away into Oblivion like the icos of the last few years. And AOL 20 years before that. So what important truth do very few people agree with me on it's the ultimate contrarian question, isn't it? My answer and the inspiration behind this paper? Blockchain is dead. The future is on lightning. The last few years have been a festival of hype stupidity and downright Madness. It's time to call out and discard the rubbish in lay a fresh Foundation. One of understanding and sense because it's only when we remove layers of ignorance that we can experience the lightbulb moment. Quote in order to learn something new one must question what it is. They think they already know in quote unknown. a note quote these notes were originally the basis of a presentation for wholesale investors 2019 emergence event. However, as I began to elaborate on the ideas, I realized my 30-minute presentation would blow out to around three hours whilst I have been described as entertaining on stage. I don't think any sane human would want to listen to me lecture for three hours end quote Alexander's fatzke. Welcome to the first publication of the Bitcoin times. This special edition was inspired by three mildly excessive rants from our chief Editor to having occurred at 3 a.m. In the morning and another whilst driving and dictating to one Chantal De La Rey frantically tapping away on the phone taking notes the team at Amber decided to transform all that content into one broad but concise digestible and Native publication aptly entitled as the first edition of the Bitcoin times in the pages that follow you will find the important information that brings the key elements of the Bitcoin story together by the time you finish you'll understand the premise behind the shock headline and why if you're an investor entrepreneur fund manager or human of any sort you should be taking a serious look into how you can participate in both Bitcoin. And lightning we don't expect everyone to get as excited about all this as we are, but do anticipate this will most likely be for the benefit of the Skeptics the Curious the die-hard stubborn minority any Ka holders of Last Resort. So we dedicate this to you all. We hope you get a lot out of it that it challenges some of your more unfounded biases and beliefs. Reinforces those that make sense and helps you emerge on the other end with a broader perspective. the Bitcoin times editorial team breaking the blockchain Quote I must break you Rocky 4. Blockchain doesn't work. About halfway through a few of last year's talks. I presented what I called the new formula a formula that if dismissed as an experiment and allowed to grow large enough would lay the foundation for a new form of global collaboration consensus value storage and transfer but only if we take all the elements in combination. networks Game Theory and mechanical design cryptography proof of work in Byzantine fault tolerance social engineering and psychology computer science decentralization and distributed computing economics incentives and disincentives and a data structure blockchain. This formula. This recipe would come to yield something that is technically and socially secure natively digital and globally distributed shut down and censorship resistant practically immutable and as a result of maintaining the sanctity of the above attributes this formula would also produce something that was relatively speaking slow very expensive to run and limited in duration. Act scope much like the internet. The only thing the actual internet can do is Route packets of dumb data. What do I mean by direct scope? Well, it's the number of things this formula can and should be used for and that includes verifiable digital scarcity a secure unconscious skateable monetary unit a self Sovereign digital store of value. And a global immutable digital settlement Network. But here's the kicker what we can then build with the above. And on top of the above is endless. Much like language and the internet Simple Rules IE protocols create a solid foundation. This gives you the opportunity to build infinite complexity on top. So where did blockchain go wrong? In short a complete lack of contextual understanding both on a macro and micro level but let's explore three key points context scrambled eggs. Focus and Overkill Rube Goldberg Number one context first of all what I like to call the scrambled eggs Theory the blockchain ingredient on its own does not give you any of the attributes. We discussed earlier security and immutability are not some inherent traits that magically appear thanks to blockchain security is a function of cost in comes as a result of all of those ingredients combined. In fact anyone who tells you otherwise is probably convinced themselves that a great cake is made with only one ingredient for example eggs and that they could make you a better cake if they whisked the eggs much faster. The reality is they're not selling you cake. They're selling you scrambled eggs. I'm sorry, but that's not how things work taking. The one ingredient out of context does not yield the same result. number to focus The Innovation here is autonomous consensus removing intermediaries means just that if it must be run by some entity or trusted institution, it just reinforces its inherent uselessness. There is zero reason to use a blockchain if someone is managing it It's a much more practical approach to just build a tech product that solves the problem. There is no need to slow it down by creating excess redundancy, especially when there's no actual disintermediation of a managing party you end up with the worst of Both Worlds. number 3 Overkill you could be in the other camp that says quote. We agree blockchain isn't that entire recipe we just use the term for shorthand. We just believe it should be used everywhere in quote. I'm here to tell you that taking the entire recipe and applying it to anything other than the for direct applications. I mentioned above is complete Overkill there is nothing as critical to the function of society as money or value transfer as I'll explain later that could justify or require such an expensive method of disintermediating central authorities. I mean the very essence of Bad acting or stealing is related to money or value a major reason why the institutions we trust to manage money exists in the first place is that maintaining some form of Integrity in the money we use to represent. Our labor is the foundation of our ability to cooperate as a species. Bitcoin is simply a better way to do this and places that guarantee of Integrity into code backed by math and agreed to Via broad participatory consensus. So to sum up we really only have two situations when it comes to blockchain summed up by my sophisticated chart below a blockchain alone. If we take one ingredient out of the rest. The or even just combine it with a couple of others, for example, the distributed computing part DLT as it's now being touted. It's a complete waste of time and the fact that it must be run by some Consortium or trusted institution just reinforces its inherent uselessness. Be the entire recipe on the other hand for anything other than what I described above IE money or a settlement Network. It's a Rube Goldberg machine. It's too expensive and if we needed that level of validation for everything we do as a society, then nothing would function anyway, people groups companies entrepreneurs Etc are generally trustworthy and doing the right thing most of the time we Don't need everything on a blockchain the issue lies with groups or institutions that have disproportionate power that have abused that power and that have very little or no skin in the game and whilst there are less of those in number. They create distortions in society due to their size and ability to tamper with the core resource for human collaboration. A network such as Bitcoin that reinvents codifies and liberate something as important as money like the internet did for information and communication changes the game for the better by reintroducing symmetry, but it's expensive and as I've stated there's nothing else as mission-critical in the world that warrants the application of this formula to be successful. blockchains broken promise the promise of blockchains that would solve all the world's problems came in the form of two key attributes security and immutability. That was it game set match. Let's now use it everywhere. The problem with this conjecture as we established above is that block chains are not mysteriously endowed with these attributes because of their unique technical architecture. In fact, there is nothing unique about blockchain architecture. It's just chunks of data segmented and chronologically connected and these days supposedly across multiple servers in the case of the new buzzword DLT. Let me be clear. This does not give you anything that's secure security and immutability are a derivative of cost and cost only comes from combining all ingredients in the recipe as discussed earlier Bitcoin is different. Why Bitcoin is the most secure public digital Network? We have not because it's built on the blockchain. But because it combines that form of database architecture. I'll call it that because that's what it is with a robust game. Theoretically sound economic model with a well-thought-out incentives and disincentives mechanism and proof of work which solves the Byzantine generals problem in a distributed. Decentralized system and introduces the game theory in other words Bitcoin is secure and immutable because it has a currency baked into the protocol that is priced by the free market where its value is inextricably linked to the security of the network by incentivizing each of the participants of the network whether validators judges users Etc. Ha economically it is in everyone's self-interest and therefore Collective interest to maintain the Integrity of The Ledger micro and the network macro. It is probabilistically sound and becomes more. So with time this means it's Lindy compatible and is the most robust form of system you can have that is the Innovation an autonomous Network. It's made up of participants at multiple layers all with skin in the game not block chain or DLT. the Limestone analogy when people get up and begin to talk to me about how they're going to use the blockchain to solve supply chain or whatever other mostly ridiculous idea. They have it reminds me of someone who just discovered that lime Stone aggregate in concrete makes for better strength and better overall properties in concrete. So they then apply it to everything else. They put limestone in their green smoothie on their avocado and toast in their latte as a back rub on their Partners skin. And even as fuel in their car why because of course, it makes everything better. It's preposterous. And it can only come from people who have a thin veneer of an ideology that they've adopted without either being able to understand or even bother to understand what's actually going on. Bitcoins superpower immutability Let's take a quick break and hit our sponsor and they will jump back in on this section. For anyone who has a podcast anchor cannot be beaten particularly for trying to get off the ground their entire platform is free. This includes unlimited hosting both in audio that you upload and how much your listeners download. I have uploaded an incredible library of audio now and I've never paid anchor a dime. In fact, they connect me with other sponsors and have run an ad consistently on my show. So they've paid For exposure to my audience that's really hard to beat even if we ignore that I can record directly in the app or my browser. I don't need any other software. If I don't want it I can edit at sound effects clips and they automatically publish to all of the top podcasting platforms. I never had to do a thing. So if you were thinking of starting a show or already have a podcast, there's no better platform out there check out anchor by downloading the app or go to Anchor dot f FM today immutable equals resistant to change to go back in time and change one transaction on the Bitcoin Ledger. It would not only require you to accumulate enough mining equipment or Capital cost but also expend enough power to win the proof-of-work game and validate the blocks from that point forward to today. This is not only financially insane but almost physically impossible why it's the cost of validating transactions and maintaining the Work of distributed but consistent Ledger's that gives something like Bitcoin. It's immutability for someone to change something on this network in the past. It would cost billions. In fact, it would require something like three trillion with a t modern high end laptops worth of computing power just to change one transaction on bitcoin. That is the definition of immutable. It's this proof of work. Brings the cost into Bitcoin and forms the basis of the game theory proof-of-work is the bridge between the digital and the real world and the sunk cost of capital and work done is what makes it immutable people hear words, like cryptography or encryption or hashing together with terms such as blockchain and mistakenly assume that it's somehow got something to do with immutability. They also hear that mining uses. Lots of electricity and is bad for the environment. I meant from those with an ineptitude to math probability or Game Theory and by not understanding the broader recipe at work here. They think that they can discard that expensive proof-of-work part and keep the nice fluffy inexpensive software or blockchain part. But as we've established there's a problem with that line of thought if there is no cost to change something then we're back where we started in other words taking someone's Word that this is the way it is, which as I stated Works in 99.9 percent of cases IE. If you can't trust your family member or co-worker, you've got bigger problems putting it on a blockchain is not going to solve it but not when you're driving The Narrative of immutability sovereignty or security. So I'll say it again security and immutability are functions of Cost proof-of-work is the part that looped it all together and helped us for the first time in history associate a real world cost to an ephemeral fungible digital object furthermore because proof-of-work is a compounding phenomenon. It only gets stronger and more immutable with time. This is at the core of why people say quote Bitcoin is antifragile it benefits from the passage of time. time the Lindy effect Bitcoin is the first time we've had a digital good that functions like something physical and because it's bound by math. It's able to be verifiably scarce Wireless maintaining the scalability. That only comes with something that is natively digital. The banana example if I give you a banana in the real world, I no longer have it if I send you a digital banana, all I did was copy it and now we've both got a record of it if I send you some Bitcoin I no longer have it just like the banana in real life. It's now yours. I didn't create a new one. I didn't copy it and I can't reverse it. I can't go back in time. The only way I can get it back is if you send it back. But that's a new totally separate transaction forward in time. Bitcoin is the first and probably last network of its kind that's reached this status why a big part of it was luck and timing Bitcoin got quote. This is bullshit for five years before anyone even took it remotely seriously for someone to catch up and replicate this level of infrastructure. They'll need something. Like a hundred billion dollars and hope that nobody realizes what they're doing and attempts to compete because it will then cost each player more than 100 billion dollars the result of all of this would only reinforce Bitcoins importance and drive its value higher and create this self-reinforcing feedback loop, which asymptotically approaches a cost of infinite. Bitcoin was a once-in-a-lifetime thing Andreas said it best quote proof of work in Bitcoin is now significant because it was historically insignificant. People take it seriously. Now. If you try to replicate this experiment again, you'll be noticed you'll be attacked. And by the time you've made any Headway Bitcoin will have progressed further think about it this network grew from zero to a hundred billion dollars worth of value stored on it along with infrastructure built around it with no marketing budget. Tell me the last time something like that occurred the closest analogy. Is the internet except this time quote measurable value is associated with the network. So it's a little more contentious this also explains why all the others have had to raise non-dilutive Capital rounds and sell the quote that protocol thesis in order to make noise and get some attention. I guess everyone wants to own this like the telcos wanted to own the internet. The reality is that public networks so far down the societal stack our own Owned by the collective which is what gives them power time and volume of participants are on their side everyday, the Bitcoin remains operational it gets stronger more secure more immutable more robust more trusted and more valuable. In fact, it's Lindy effect seems to be accelerating which is something we've not seen before for everyday a competitor grows. Bitcoin Grows by multiples or magnitudes more. Network effects are runaway trains and Bitcoins immutable proof of work network has taken off and will be practically impossible to catch up with this is why I believe trillions worth of economic activity will anchor to it the same way as the internet was the most robust way to Route information across the new digital world Bitcoin is the most robust Global Network upon which money can live and Via which it can be settled and routed. A strict should the value be large enough to justify routing directly on it. Immutability as a service quote Bitcoin provides immutability as a service. There are not many applications in the world that need immutability and perhaps only a couple that need to build immutability as part of their core stack. It's just too expensive now if we view immutability as a service one that any application in the world can anchor or connect to then we begin to reframe how we view Bitcoin IE as a broader Network that settles transactions or states with Associated to them an example here will help there is no reason or very little reason that any company Tech or otherwise today needs to buy host and maintain its own server infrastructure. It's costly and it makes up only a fraction of what matters in their actual business. So they use a cloud-based service such as AWS. You will also note that because of the economies of scale. There are only three real options AWS Azure and Google why they got in early and they poured billions upon billions into it immutability is similar, but also different. similar because the infrastructure required to make something truly digitally immutable is extraordinary perhaps even more than all of the combined infrastructure that Amazon Microsoft and Google operate and it only makes sense that people will anchor to it as and when they need to different because it's not something that can be run by one or a few parties a concept like immutability and things that inherently need it IE money are only so if broadly owned in other words, the more distributed and decentralized the architecture and higher the number of owners validators and nodes the more robust costly and therefore immutable it is Should one or a few entities manage all of it it then undermines the value proposition and defeats the entire purpose. the immutable Network immutability as a service is what will bring more economic activity to the Bitcoin Network in the long run again similar to the internet the internet started off as a way to connect computers at a distance and over time as more people used and trusted it evolved into this new communication Network that provides data packet routing as a service we built everything on top and the innovation has been extraordinary the next step is making monetary value into a protocol owned by the collective whose core tenant is absolute digital immutability a network where you can't turn back time, like in the real world all of the economic value from applications that require this feature along with any broader monetary banking capital or financial applications that require Wire an absolute guarantee of the following functions sinned store and receive will accrue on it. And as I've stated Ad nauseam the more economic activity that occurs on and on top of the Bitcoin Network the more immutable and secure it will become its compounding it is self reinforcing. It has already hit a critical mass and it's now Runaway Train other consensus mechanisms there are and there will continue to be lots of other consensus mechanisms created some that might work most that definitely won't they may be used on their own networks for applications that are either private proprietary or for applications that don't require an absolute guarantee of immutability and security. I personally don't believe any money related or high value applications will run on their own networks except in vain over the next as this space evolves because networks especially those were the broad population participate generally converge to Unity. That's why we largely have one internet one set of protocols for email why we all use AC power y within a Nuclear jurisdiction the network of language converges to 1 and similarly so with money there is 1 USD in the United States likewise one AUD in Australia. In fact, we see this as the world becomes more global. English hit its critical mass attain the primary Network effect and it's now more functional to speak English in most places around the world aside from converging to Unity due to efficiency and practicality the world can probably only sustain one absolute immutable unsensible secure proof-of-work chain because it's expensive. This chain is likely at this stage at least Be Bitcoin if we had to run proof of work for everything, we destroy the planet plus it assumes nobody trusts each other for anything which is a bigger problem. Anyway, and a if someone wants to use it as a service, they're going to go to the one that has got the highest guarantee that in itself will increase the Network's guarantee leading to that self-reinforcing recursive effect. I described earlier and be furthermore if you do have a Novel quote light consensus mechanism that's fast. You could in the future anchor it to something like Bitcoin as and when you need to substantiate any claim or make a final judgment It's this line of logic that leads me to believe most of the economic value will be swallowed up by the Bitcoin network over the long term not to mention the new Concepts and innovations that will emerge using the ingredients of immutability and verification like how Facebook and Instagram emerged from the internet. Be OS the new monetary operating system. All right. We're going to close this one out here. Again. This is the Bitcoin times volume 1. This was actually published on February 25th. 2019 did not open with that at all, but I will have a link to this. There's lots of actually pictures of trying to read like the comics and some of the other little additions and quotes and stuff. But this is actually set up in really cool and like an environment online so you can actually check that out at Bitcoin x dot news. So I will link to that and We actually Connor Brown is actually going to be doing some of the writing in the next volume. We he alluded to that in yesterday's episode actually. So if you haven't listened to that one about stop calling Bitcoin deflationary that is another one to go along with this whole piece. So also I will have in the show notes not only linked to this and to Alexander's fat skis Twitter page so that you can check him out and follow him on Twitter, but also the link to the conversation that we had with him. We sat down with him at Bitcoin 2019 and had a awesome chat with him and also the guys from the citizen Bitcoin podcast had an awesome time. So that is a wonderful one to check out where he goes into this and kind of details out the back story and there's some some hilarious stuff in that one. So highly encourage that one if you have not listened to it again all this stuff available in the show notes. Thank you guys so much for listening. We're going to continue this with part two tomorrow. We will dig into some really fun commentary all about blockchain versus Bitcoin in the next couple of days. So stay tuned. Don't forget to subscribe and share this out with everybody, you know in the Bitcoin and crypto economy space and until next time I am guys Swan signing off. Take it easy guys.
"When people get up and begin to talk to me about how they’re going to use the blockchain to solve supply chain, or whatever other (mostly ridiculous) idea they have, it reminds of someone who just discovered that limestone aggregate in concrete makes for better strength and better overall properties in concrete; so they then apply it to everything else: • They put some limestone in their green smoothie • On their avocado and toast • In their latte • As a back rub on their partner’s skin • And even as fuel in their car"  - The Bitcoin Times, Vol 1  Jumping into a 2 part covering of the first edition of The Bitcoin Times by Aleksandar Svetski and the team over at Amber. "Blockchain is Dead!" - but what is blockchain? Isn't it a breakthrough innovation that can be applied to a plethora of important data sources all around the world? Listen to find out more! For more awesome content, be sure to follow Aleksandar on Twitter, check out the Amber app for simple Bitcoin buying, & see the awesome visual setup of "The Bitcoin Times" over at https://bitcointimes.news/  Don't forget to listen to the hilarious conversation we had with Aleks & the awesome guys from the Citizen Bitcoin Podcast at Bitcoin2019! https://anchor.fm/thecryptoconomy/episodes/CryptoChat_014---Aleks-Svetski-on-the-Death-of-Blockchain-e4gi7h  And lastly, Conner Brown, the author of yesterday's piece "Stop Calling Bitcoin Deflationary" will be featured in the next volume of Bitcoin Times, so follow him as well so you don't miss the next edition. If you want to support the show AND join the Cryptoconomy Telegram crew, become a patron below! https://www.patreon.com/thecryptoconomy  ---   This episode is sponsored by  · Anchor: The easiest way to make a podcast. 