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Kindle Notes & Highlights
by
Don Tapscott
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March 25 - April 13, 2018
Online, we still can’t reliably establish one another’s identities or trust one another to transact and exchange money without validation from a third party like a bank or a government.
This has never happened before—trusted transactions directly between two or more parties, authenticated by mass collaboration and powered by collective self-interests, rather than by large corporations motivated by profit.
Blockchains enable us to send money directly and safely from me to you, without going through a bank, a credit card company, or PayPal.
Bitcoin or other digital currency isn’t saved in a file somewhere; it’s represented by transactions recorded in a blockchain—kind of like a global spreadsheet or ledger, which leverages the resources of a large peer-to-peer bitcoin network to verify and approve each bitcoin transaction.
Every ten minutes, like the heartbeat of the bitcoin network, all the transactions conducted are verified, cleared, and stored in a block which is linked to the preceding block, thereby creating a chain. Each block must refer to the preceding block to be valid. This structure permanently time-stamps and stores exchanges of value, preventing anyone from altering the ledger. If you wanted to steal a bitcoin, you’d have to rewrite the coin’s entire history on the blockchain in broad daylight.
This new digital ledger of economic transactions can be programmed to record virtually everything of value and importance to humankind: birth and death certificates, marriage licenses, deeds and titles of ownership, educational degrees, financial accounts, medical procedures, insurance claims, votes, provenance of food, and anything else that can be expressed in code.
distributed ledger technology, in an attempt to reconcile the best of bitcoin—security, speed, and cost—with an entirely closed system that requires a bank or financial institution’s permission to
Trust in business is the expectation that the other party will behave according to the four principles of integrity: honesty, consideration, accountability, and transparency.
we’ve come to rely on third parties not only to vouch for strangers, but also to maintain transaction records
In the emerging blockchain world, trust derives from the network and even from objects on the network.
Repressive governments like those of China and Iran enclose the Internet, exploiting it to crack down on dissent and mobilize citizens around their objectives.
What if “the virtual you” was in fact owned by you—your personal avatar—and “lived” in the black box of your identity so that you could monetize your data stream and reveal only what you needed to, when asserting a particular right.
I may have a gamer persona that I don’t want linked to my business persona. I might even have a dark web persona that is never linkable to the others.”
People ought never be defined by their worst day.
In order to achieve prosperity, an individual must possess, at minimum, access to some form of basic financial services to reliably store and move value, communication, and transactional tools to connect to the global economy, and security, protection, and enforcement of the title to land and other assets they possess legally.26 This and more is the promise of the blockchain.
these businesses have little to do with sharing. In fact, they are successful precisely because they do not share—they aggregate. It is an aggregating economy.
Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.”27
Bastions of the old financial order such as banks go to great lengths to defend monopolies and often stymie disruptive innovation.
billions of people are excluded from the economy for the simple reason that financial institutions don’t provide services like banking to them because they would be unprofitable and risky customers.
When everyone shares the same distributed ledger, settlements don’t take days, they occur instantly for all to see.
Even though some progress has been made in the departments of life and liberty, a majority of the world’s property holders can have their homes or their bit of land seized arbitrarily by corrupt government functionaries, with the flick of a software switch in their centralized government property database.
In this new paradigm, rights are protected, not by guns or militias or minutemen, but by technology.
The blockchain can improve the delivery of foreign aid by eliminating the middlemen who take the aid before it reaches its destination.
The Internet has also not liberated the financial tools essential to starting a business available to billions of people.
You can send the same selfie to all your friends, but you ought not give your friend a dollar that you’ve already given to someone else. The money must leave your account and go into your friend’s.
Let the code speak for itself. Let the network reach consensus algorithmically on what happened and record it cryptographically on the blockchain.
create a puzzle that is hard to solve (i.e., it takes a lot of work), but easy to verify (i.e., everyone else can check the answer very quickly).
On the blockchain, bitcoin movement across the network is permanently stamped, from the moment of its coinage.
the blockchain ensures integrity through clever code rather than through human beings who choose to do the right thing.
For the first time ever, we have a platform that ensures trust in transactions and much recorded information no matter how the other party acts.
The system distributes power across a peer-to-peer network with no single point of control.
The blockchain resides everywhere. Volunteers maintain it by keeping their copy of the blockchain up to date and lending their spare computer processing units for mining.
“incentive structures for most of the top executives and many of the lending officers of these banks [were] designed to encourage short-sighted behavior and excessive risk-taking,”
“If you give people bad incentives, they behave badly, and they behaved just as one would have expected.”
Satoshi programmed the source code so that, no matter how selfishly people acted, their actions would benefit the system overall and accrue to their reputations, however they chose to identify themselves.
Because they now own bitcoin, they have an incentive to ensure the platform’s long-term success, buying the best equipment to run mining operations, spending energy as efficiently as possible, and maintaining the ledger.
The paradox of these consensus schemes is that by acting in one’s self-interest, one is serving the peer-to-peer (P2P) network, and that in turn affects one’s reputation as a member of the economic set.
“All money mankind has ever used has been insecure in one way or another,” said Nick Szabo. “This insecurity has been manifested in a wide variety of ways, from counterfeiting to theft, but the most pernicious of which has probably been inflation.”
Given the halving every four years of bitcoins mined in a block and the current rate of mining—six blocks per hour—those 21 million BTC should be in circulation around the year 2140.
Imagine online discussion groups where participants have reputations worth enhancing, in part because bad behavior will cost them financially.
IBM reported that the average cost of a data breach is $3.8 million, which means that data breaches have cost at least $1.5 billion over the last two years.
platform. PKI is an advanced form of “asymmetric” cryptography, where users get two keys that don’t perform the same function: one is for encryption and one for decryption.
People should control their own data. Period. People ought to have the right to decide what, when, how, and how much about their identities to share with anybody else.
Satoshi installed no identity requirement for the network layer itself, meaning that no one had to provide a name, e-mail address, or any other personal data in order to download and use the bitcoin software.
the identification and verification layers are separate from the transaction layer,
Only when Party B goes to spend that amount does the network verify that Party B now controls that bitcoin.
On the blockchain, participants can choose to maintain a degree of personal anonymity in the sense that they needn’t attach any other details to their identity or store those details in a central database. We can’t underscore how huge this is. There are no honeypots of personal data on the blockchain.
By simply using Web sites, consumers authorize their owners to convert trails of digital crumbs into detailed road maps for private commercial benefit.
The Virtual You could protect your personal information, giving away only the information required in any social or economic exchange work under your command and make sure you receive compensation for any of your data that has value to another party.
the blockchain not only prevents a double spend but also confirms ownership of every coin in circulation, and each transaction is immutable and irrevocable.
