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The original vision for the World Wide Web, as imagined by its creator, Tim Berners-Lee, was meant to be closer to a P2P network than how it works today, that is, behind a series of firewalls and fed to us through Google, Facebook, and maybe a handful of other mega corporations.
Proof-of-work is aimed at deterring attacks or spam in a network by requiring the users of the service to do some work, so that it would be economically inviable to create useless or malicious data.
When a transaction is executed, it is broadcast to all the computers in the network for them to update their ledgers. Transactions are bunched together to form a block of data, and once that block runs out of space (1 megabyte right now), computers race to solve a complex mathematical puzzle to verify the transactions, seal the block, and record it on their ledgers.
For them, Bitcoin was more than digital money. It represented a belief system, and those forums were often the only place Bitcoiners felt understood.
Ethereum uses the Account/Balance model, which keeps track of the total balance, or “state,” of each account. If Bitcoin’s UTXO model is similar to bills and coins, Ethereum’s model is more like a checking account, allowing for fine-grained control over the amount that can be withdrawn, and making more complex programs easier to implement.
Another example was crop insurance. “How? Simple—a contract for difference using a data feed of the weather instead of any price index,”
Mathematics is the only field, he noticed, where laws are thousands of years old. He loved that proximity to immortality: once you prove something, it’s proven forever.
He stopped believing he could make a difference or that a system he thought was broken could be fixed. There was no point in trying anymore.
A DAO was the groundbreaking idea of creating a computer-run organization. The business’s rules would be set in a computer program and executed with as little human involvement as possible. Because the organization would be built on top of a public blockchain like Ethereum, decision making and flow of funds would be fully transparent, uncensorable, and immutable.
DAOs don’t have to be limited to cryptocurrencies: there can be unmanned escrow services, incorruptible arbitration services, governments that can’t ignore their constitution, crowdsourced venture capital firms, and many more,
Computer science made it clear to him that the more centralized a system is, the higher the potential to create critical points of failure. To him, the banking system is one example of these closed systems, so it was only natural that it would fester and rot.
They had to decide whether in this new phase for the internet that they foresaw they would be Google or Mozilla: a corporation, with centralized management and a predictable revenue stream, or a foundation supporting developers from all over the world to build Ethereum in a more decentralized and organic way.
Ethereans learned that they can program computers, but they can’t program humans, whose greed, ambition, and ingenuity can be strong enough to find their way around those programs. Code can be made to run in a specific way, but that will always clash with humans, who don’t necessarily act predictably.
“Experiments demonstrate that people are ready to believe the majority view or to believe authorities even when they plainly contradict matter-of-fact judgment,”
Other observers argued that cryptocurrencies shouldn’t be analyzed like stocks or other securities. They were a whole new beast, which explained the high valuations. “Maybe these currencies are actually worth these high prices, and maybe even worth many times more,” a column on TechCrunch said. “But the problem is we have no way to figure out their value. Cryptocurrencies aren’t public companies with earnings and expenses and EPS.”
For too long, users had neglected to question what they were giving away to use these platforms “for free.”
People are handing over all the minute details of their lives, including second-to-second GPS location, private chats, and surreptitious recordings of conversations, and these companies are profiting from that data. Blockchain technology offers an alternative to that dark future, where people would take back control of not just their money, but their personal information, too.
