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Down the Rabbit Hole - Dhruv Bansal, Refactor Camp 2018


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Talk given at Refactor Camp, May 2018

Published in: Technology
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Down the Rabbit Hole - Dhruv Bansal, Refactor Camp 2018

  1. 1. A series of increasingly harebrained blockchain schemes… Down the Rabbit Hole: Dhruv Bansal Refactor Camp 2018I’m a physicist & entrepreneur. Minutes through this talk Bullshit Tolerance
  2. 2. What Did Bitcoin Get Right? IANA Bitcoin Maximalist but… I believe Bitcoin is sound money and will become the basis of the global economy. “Money” is a shared hallucination. People are eager to own the “means of production”. The right abstractions remake the world. Stateless-Socialism Hallucination Bits Move Atoms Three Lessons of Bitcoin
  3. 3. Scheme 1: Nakamoto Point
  4. 4. $160B 50x Bitcoin is a small fraction of the world’s money. Bitcoin would have to grow by 100-1000x to be an appreciable fraction of world money.
  5. 5. Bitcoin Energy Usage Bitcoin is a small fraction of the world’s energy usage. Bitcoin would have to grow by 100- 1000x to be an appreciable fraction of world energy usage. ~1 Nuclear Power Plant Global Electricity Production Data centers currently use ~10x more energy.
  6. 6. Bitcoin is an Arms Race When does it stop? Bitcoin Network Hashrate
  7. 7. Generation Transmission Distribution 10¢ 7¢ 25¢ Bitcoin mining can earn 20-30¢ / kWh (more if you HODL). Worldwide Electricity Prices Marginal revenue from PoW mining can be greater than selling kWh.
  8. 8. California (CAISO) Negative Power Prices Not just in China, either.
  9. 9. $1T $2T $3T $4T $5T $365k $3.65M $365M $36.5B $3.65T Bitcoin Mining Revenues Oil Revenues Bitcoin is a small fraction of the world’s energy revenues. Bitcoin would have to grow by 100-1000x for the money spent on electricity during PoW mining to be an appreciable fraction of world energy revenues. $6B/yr @ $10k/BTC
  10. 10. Nakamoto Ratio: fraction of world electricity used in PoW to secure the money supply. 0.0 1.0 I I PoW mining is separate from energy production. II II PoW mining and energy production start to merge. Saturation point: Marginal revenue from PoW = marginal revenue from selling energy III III 0.001 $10k/BTC 2018 0.01? $100k/BTC? 2021? <0.1? $1M/BTC? >2025? 2009 Conjecture: Once the Nakamoto Ratio reaches the saturation point, it will not change.
  11. 11. Scheme 2: Chain Lightning Why is it important that we build a blockchain mesh network? Why is it important that we build a blockchain mesh network? Oh! It has future applications in identity, social networking, private data transmission, you name it! Blockchain Advocates Blockchain Engineers
  12. 12. Transaction ID Output Index Script Amount abc 0 1ab 1 def 2 1ab 2 bef 0 3de 3.5 bef 1 1ab 0.99… What is Bitcoin? A shared ledger of title to a transferrable token. Uses PoW to achieve consensus (slow). What is the Lightning Network? Lightning Bi-directional payment channel. In- channel transactions are fast, settled in Bitcoin transactions. Network A network of channels.
  13. 13. What is the right measure of centralization? If hubs are inevitable, will users have choice, control? What incentives/algorithms/data can we adopt to shape the network? Engineering & experimentation required.
  14. 14. $ traceroute -aS traceroute to (, 64 hops max, 52 byte packets 1 [AS0] 8.891 ms (0% loss) 3 [AS11427] 39.522 ms (0% loss) 4 [AS11427] 17.679 ms (0% loss) 5 [AS11427] 22.915 ms (0% loss) 6 [AS19548] 27.960 ms 7 [AS19548] 68.114 ms 8 [AS19548] 71.902 ms (0% loss) 9 [AS7843] 69.852 ms (0% loss) 10 [AS7843] 88.256 ms 11 [AS0] 70.450 ms 13 [AS0] 348.071 ms (0% loss) 14 [AS0] 233.010 ms (0% loss) 15 [AS0] 284.980 ms (66% loss) 17 [AS0] 234.750 ms (66% loss) The Internet is built from multiple connected networks (autonomous systems), but it’s much more centralized than a mesh network. What is a mesh network? What about an economic layer? A new, blockchain-settled economic layer in the networking stack would allow us to incentivize (more) decentralized telecommunications. Content Messaging Knowledge bases Social networks Marketplaces
  15. 15. EO1602 (FDR, 1933) & EO11615 (Nixon, 1971) 2008 Financial Crisis, Bailouts & QE Snowden, 2016 Election, Cambridge Analytics Why is it important that we build a blockchain mesh network? Robustness, privacy, and censorship-resistance are as important for telecommunications as they are for sound money. A blockchain-based mesh network may be required to preserve blockchain-based money. Bitcoin “The Mesh” Instigating Actions Predictable Outcome Paranoiac’s Solution Patriot Act (Bush, 2001) Citizens United (Obama, 2010)
  16. 16. Lightning Network The mesh works similarly to the Lightning Network: • Efficient yet private routing inside an adversarial network • Micro-accounting, external settlement • Must be scalable • Centralization concerns How to integrate blockchains & networking? (Expect to see many variations after the first successful one.) Like blockchains, lightning networks are a new kind of technology.
  17. 17. I heard you like settlement layers… The mesh must achieve the speed of current centralized networking. Bitcoin transaction LN transaction Networking minutes - hours second? milliseconds! A lightning network transaction for each mesh packet is probably not scalable. Lightning Network Mesh networking is Layer 3 Client opens network connection to server. Route resolved between client & server on LN <=>
  18. 18. Chain Lightning ETH is doing this backwards Mesh (Data, Comms) Bitcoin (Value) LN (Payments) Apps (CPU) Time A chain of settlement layers anchored in a PoW blockchain. Can the mesh be self-hosting? Anchoring to value prevents externalization of costs in the mesh & app layers. Personal Data Collection DDOS Bloat Security
  19. 19. Scheme 3: Humanity
  20. 20. What is my identity? 029506048384 20640737ccde 146df596a28ae 9dd68872fcc39 63c048baa487 d926 10/10! Dhruv Bansal Austin, TX 34 yrs old Me My Identifiers Attestations About MeMy Reputation My NetworkMy Data There’s no mystery or money in identifiers.
  21. 21. Why do you need a token to do ID? Public/private keys are sufficient for authentication & delegated authorization. PGP OpenID OAuth DID
  22. 22. What about lost private keys? If you lose a private key, you lose: Data: You can no longer decrypt anything previously encrypted with that key Identifier: You can no longer prove you own the corresponding public key Not fixable Fixable Identifier reassignment: Centralized Identity provider issues a new identifier. Distributed Nope (Bitcoin) Can blockchains provide an economic context in which to perform distributed identifier reassignment?
  23. 23. abc def50 HUM 25 HUM 1. Identities can send HUM to each other in transactions. Links cost HUM and grant rekeying power so users are incentivized to be judicious in creating them. 02a395c03341276df2fc94889667e744b7372 891c75366b094ac86c5a6eaba8615 0385e252a2cc94a7907d5381e73986cab1c9 34f08013fe940dda7493a5889e5eba 2. Identities can spend HUM to update their public key. 3. Identities can spend HUM to become (un)linked. 4. Rekey: Identities linked to a given identity can spend HUM to update that identity’s public key Presenting HUMANITY
  24. 24. More on Rekeys Modified by neighborhood? Unrecoverable cost? Trust domains
  25. 25. Once more, with HUMANITY: 10/10! Dhruv Bansal Austin, TX 34 yrs old Me My Identifier Attestations About MeMy Reputation My NetworkMy Data Decentralized, self-sovereign identity is the foundation for future models of political representation. db 50 HUM 02a395c03341276df2fc94889667e744b7372 891c75366b094ac86c5a6eaba8615
  26. 26. Scheme 4: Latinum
  27. 27. What is Latinum made of? No physical substance is likely to be worth transporting between the stars. Latinum is made of information. Any system of information-based wealth transfer across large distances must contend with the finite speed of light.
  28. 28. Finite Speed of Light Allows Double Spending
  29. 29. Relativity of Simultaneity Screws w/Consensus
  30. 30. Blockchains Can Into Space! Extreme scales Years for a transaction to get mined Decades for a transaction to fully confirm Hashpower on the Kardashev Scale Faster throughput cannot come from bigger blocks, it must come from layering. Long timescales characterize and may be required for spreading through space.
  31. 31. Scheme 5: Hash to the Future
  32. 32. How does basically all of physics work? Noether’s Theorem: To every symmetry corresponds a conservation law. Symmetry Conserved Quantity Translation in space Linear momentum Translation in time Energy Rotation in space Angular momentum Rotation in spacetime (boost) Center of mass Rotation in U(1) Electric charge Rotation in SU(2) Isospin Rotation in SU(3) Color charge Feynman’s Sum Over Paths: Reality is the mutual interference of every possible thing happening at once. Nature is an adversarial system with a consensus algorithm designed to prevent double-spending.
  33. 33. Space Time Spooky Action at a Distance Time Entanglement Allowed States: Conservation Law: must balance Here There Now Later The future can be known with certainty, just like the past.
  34. 34. Quantum Transactions
  35. 35. Hash to the future? Today’s blocks are secure because they are the tip of a long, heavy PoW chain of blocks going into the past… …what if each block constrained all future blocks?
  36. 36. END