Crypto Market Commentary – ETHUSD breakout – 02/14/17
According to the creator of ethereum Vitalik Buterin, the greatest challenges ahead are:
- Finding sources of revenue other than our existing ether reserves (no worries, we still have ~$11m worth of ETH on top of our fiat reserves).
- Expanding the research team and finding more of the right people to participate in research efforts on all fronts (scalability, privacy, security, etc)
- Improving the foundation’s external communications; working on helping the community understand what the foundation is doing, why things are done the way they are done, and what the progress is.
It looks like they have a nice cushion in reserves to build out the system. However, the amount of work to be done may take a substantial amount of resources. Hopefully, if things progress notably, then more investment and venture capital will flow their way and flow into the native currency itself.
Also, in the same thread:
Many people, including very early on myself, thought that Bitcoin would somehow liberate us from the foibles of human politics, but the Bitcoin block size wars of the last 2 years have in my opinion proven conclusively that that has utterly not happened at all, and that situation is in fact highly political from all sides.
What all of this means is that corruption and political squabbling are not something that happens because a particular set of evil bankers is in charge, but rather they are natural results of incentives in large-scale social systems and the way human being respond to them.
This falls in line with my own thinking that Socionomics provides a better framework with which to analyze economics and financial markets. Socionomics is a field of study conducted under the hypothesis that waves of social mood motivate the character of social actions. Corruption and political squabbling is a natural process that appears during certain periods of negative social mood. It is no coincidence that the price of bitcoin went down in 2014 as this corruption and political squabbling began.
According to Buterin’s paper on “The meaning of Decentralization”, there are three types of software decentralization:
- Architectural (de)centralization
- Political (de)centralization
- Logical (de)centralization
As some users point out, consensus requires logical centralization. In other words, Bob can’t believe that bitcoin’s hard limit should be 21 million units and Sally believe that bitcoin’s hard limit should be 42 million. They both have to agree on the same limit, which is logical centralization.
Humans, in aggregate, dictate social protocols. Software and code will never be able to change consensus on a human level. These systems should be built with that thought in mind.
Disclaimer: None of this is advice of any kind.