BitConnect Coin Sees Massive Growth Amid a Surge in Adoption

Bitcoin Press Release: Cryptocurrency newcomer, BitConnect Coin (BCC) sees continued growth after announcing previous records in value and market capitalization.

Alan Zibluk – Markethive Founding Member

The total market capitalization of all cryptocurrencies

reached an all-time high today, passing $60bn as the innovative assets continued to draw robust inflows. This figure reached $63.6bn at one point during the day's trading, according to online data service CoinMarketCap, which represented a weekly, monthly and quarterly increase of roughly 18%, 115%, and 220%, respectively. While analysts cited different variables as fueling these gains, one factor they noted was growing awareness of cryptocurrencies, one that is finding them emerge as a more diverse set of investments than observed previously. Tim Enneking, chairman of cryptocurrency hedge fund Crypto Asset Management, spoke to this development,

stating:

"Cryptocurrencies are finally hitting the general consciousness whereas before they were marginal, with the possible exception of bitcoin."

As the assets draw "increased media coverage," Ryan Rabaglia, head trader for Octagon Strategy, told CoinDesk new investors are coming to space. The growing interest in the space is also being felt at his over-the-counter (OTC) trading desk, which has been seeing a rise in business activity. "Our onboarding rates have experienced a massive spike and our trading volumes, at mid-month, have already increased exponentially compared on a month-to-month basis. We do not see this quieting any time soon," he said. When asked whether his company has experienced an increase in this activity amid the recent rally in cryptocurrency prices, Harry Yeh, managing partner of Binary Financial,

told CoinDesk:

"There's definitely a larger demand, not just for bitcoin, but [for] everything across the board."

Where next?

As for where cryptocurrency prices (and therefore total market cap) will go next, analysts offered mixed views. While the total value (and number) of assets in this space has surged in recent months, it is difficult to tell how much further they can climb without developing compelling value propositions. Yeh offered an optimistic point of view, telling CoinDesk that "we are just getting started". "People still don't really understand that there is a lot more room for this to move because it's a global phenomenon now. Expect more moves up but also some pullbacks like in the last week," he said.

Jacob Eliosoff, a cryptocurrency fund manager, offered a more cautious stance, telling CoinDesk that the market was "reaching the frenzy point". He expressed doubt as to how much longer these values would hold, noting that while nobody knows for sure when a bubble will pop, there are always warning signs. Eliosoff stated that in this case, a "crackdown" on initial coin offerings (ICOs), the process by which developers create new cryptocurrencies to fund projects, would likely spur a downturn. He also asserted that should bitcoin prices see a downturn, the cryptocurrency space could see diminished confidence.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

“I am gonna go make a cryptocurrency company,”

BitTorrent inventor Bram Cohen told Steal This Show podcast host Jamie King. “That is my plan.” Mr. Cohen plans to release a cryptocurrency to address Bitcoin’s mining inefficiency when it comes to wasting energy. “There is a loophole,” Mr. Cohen notes. “You can get them to work with proofs-of-work, but then this involves these warehouses burning electricity. But there is a loophole in that, which is proof-of-storage.” Mr. Cohen believes this problem can be solved by using the extra storage space on computers.

“…Instead of computers burning electricity to mine, you have storage space that is implicitly mining because it’s sitting there, and proves it’s sitting there.” The storage space is already “sitting online not doing anything” on desktop computers and cloud offerings with extra storage capacity, according to Mr. Cohen on the podcast. He adds: “There is lots of storage capacity out there, and its value is much greater than bitcoin mining rewards handed out.” Mr. Cohen’s vision for his cryptocurrency involves fusing proof-of-space and proof-of-time. Proof-of-space work when users have an interest in allocating non-trivial amounts of memory or disk space to solve a challenge presented by service providers. Proof-of-space is similar to proof-of-work. They do not, however, use CPU-bound functions.

“There are some technical issues, which adding in proofs-of-time fixes,” Mr. Cohen tells Crypto Insider over text chat, admitting the concept is difficult to explain. “The short of it is that proofs-of-time keep an attacker from making a whole new fake history instantly, a problem caused by the property that mining requires no power.”

Mr. Cohen adds: “’Proof-of-time’ refers to a sequential proof-of-work, like the old saying that one woman can make a baby in nine months, but nine women can’t make a baby in one month.” The main idea is zero waste in mining. “One of the benefits of storage based things is there is a lot less centralization in mining, so there is less concern about a 51% attack.” The good part of this is subtle, Mr. Cohen tells Steal This Show listeners. “There are economic resources that you can apply towards rewards,” he elucidates. “People will spend resources getting rewards. So it will still be wasteful, but there is a waste that has already happened and you’re leveraging that at no additional cost.”

The BitTorrent founder’s specialty might work well applied to the world of cryptocurrency. Mr. Cohen launched BitTorrent to solve problems with bandwidth scarcity in sharing data over the internet, and his platform still today enables individuals to distribute large files sans the need for specialized infrastructure. Before starting on his own cryptocurrency, Mr. Cohen must first tie up loose ends with BitTorrent, Inc., the business wing of his distributed software. “In the next few months, I’m going to devote myself full-time to the cryptocurrency stuff,” Mr. Cohen notes on the podcast. Burstcoin, an altcoin listed on Coin Market Cap, uses what the developers' term proof-of-capacity as its consensus method. It appears to merely be a re-brand of proof-of-space, the latter of which is the term preferred by academic literature.

As Mr. Cohen tells Crypto Insider, critics of Burstcoin lament the developers do not acknowledge Hellman time-space trade-offs in their coding. The coin, they say, attempts to solve problems by relying on a platform called NXT, instead of developing their own innovations. It’s not the first time Mr. Cohen mentioned this plan. The BitTorrent founder presented a talk at the Stanford Blockchain Conference, in which he examined the potential of proof-of-space and proof-of-time in a cryptocurrency. One slide in his presentation reads: “There are massive amounts of unused online storage in the world. [A cyptocurrency] requires no additional power to mine. No potential for ASICs. The available miners are highly decentralized.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

 

Alan Zibluk – Markethive Founding Member

As Cryptocurrencies Reach New Highs, The Ethereal Summit Paints A Rich Future

From January 1 to today, the cryptocurrency Ether has gone from $8 to $130
— a 16x return.

Ether is the currency of the Ethereum network, a smart contract platform which currently has a market capitalization of $12 billion. Generally considered the second-most successful cryptocurrency after bitcoin, it has been the launchpad for myriad new tokens that make up the hot “initial coin offering” trend. Even companies such as JPMorgan Chase, Microsoft, Intel, BBVA, Santander, UBS, Credit Suisse, Accenture, and others have joined an Ethereum enterprise effort. These are remarkable feats for a cryptocurrency not even two years old.

One of the companies doing the most to promote the development and usage of Ethereum around the world is Consensus Systems (ConsenSys), which bills itself as a “venture production studio” devoted to building Ethereum-based software, whether in the form of decentralized applications or private blockchains for the enterprise.

Aside from its unconventional structure, the self-funded ConsenSys, founded by Joseph Lubin who is also one of the co-founders of Ethereum, stands out for the location of its headquarters: in the heart of hipster Brooklyn, in an area once known for underground dance parties at warehouse venues that went only by addresses. In recent years, the neighborhood has gotten trendier, with juice bars, top restaurants and even proper clubs that have actual names. (ConsenSys also has five other offices around the world.)

On Friday, in keeping with its offbeat nature, ConsenSys held the Ethereal Summit, a blockchain event with 650 attendees that, instead of centering like most others, around financial services, shined a spotlight on culture projects. “Blockchain events are either enterprise-focused or IT-focused. We thought, Why not do something culture-focused?” said Amanda Gutterman, ConsenSys’s chief marketing officer. Some of the industries aside from financial services that the

Event aimed to touch on were sustainability, arts, and humanitarian aid.

I was invited to speak on a panel about what it’s like for media covering this technology, and in situations like these, since I freelance, the conference often covers my transportation and hotel. Aside from the somewhat atypical speaker lineup, the first clue I had that this wasn’t going to be a normal conference was when my Lyft pulled up to the hotel. Just from the look of it, I knew it would rank as one of the nicest places this budget traveler has ever rested her weary head. (As were the lodgings for this cryptocurrency-related conference.) When checking in, the friendly men at the front desk told me the hotel had Teslas that I should take for a spin. When I demurred, citing the challenge of driving in New York City, they said the Teslas came with chauffeurs. These first few minutes of my trip underscored one of the themes that have recently permeated coverage of the crypto space: that there’s money to be had in this new token-based internet.

Ethereal capped off a week in which the rampantly speculative ICO (“initial coin offering”) market grew by at least $50 million to total just under $470 million over two years, bitcoin's market cap as a percentage of all cryptocurrencies fell below 50% for the first time, the price of ether jumped from $90 to $126, and bitcoin surged from $1,762 to almost $2,000. And it may be just a taste of what is to come, with the largest industry conference, Consensus, organized by trade publication CoinDesk, to be held the next week, and right on the heels of that, Token Summit, a daylong conference dedicated to the new blockchain-based internet. Plus, in the coming days or weeks, the Tim Ferriss podcast, one of the most popular business podcasts, will be featuring a couple of prime guests from the cryptocurrency world.

The excitement over rising prices may have prompted these comments about the frothy ICO markets from one of the first keynotes, London-based Vinay Gupta of Hexayurt Capital, who could not fly to the U.S. due to visa issues and so sent his remarks in a video instead. “My hope for the ICO markets is that people will be extremely well-behaved and well-disciplined so there isn’t a mess for regulators to clean up,” he said to a standing room only crowd. “The price of freedom is to be effectively self-governing. We really, really want people to take that serious message, figure out how to keep those markets clean and then you protect the entire ecosystem.” (It looks like that is already happening to some extent.)

Comments about the bubble-like activity evident across the crypto space peppered the day, which had a packed agenda of panels and presentations on two stages, plus bean bags in both venues for worn-out attendees. “We’re living in a really speculative market right now,” said Jalak Jobanputra, founder and managing partner of FuturePerfect Ventures, adding that the market cap of all cryptos just surpassed that of Netflix. “I’ve been through two bubbles and crashes in my venture career — one was in ’99/2000, and the other was 2008. But as we saw with the internet, we’ll see some real value being created out of the experimentation happening right now.” As for what that would look like, Gupta said Ethereum was “moving toward a system where you can see the entire world reflected in the digital in a simple computing surface.” Comparing it to how maps made geography easier to understand, he said, “So it’s possible to look at the world with the blockchain mapping the geography with the institutions visible as actors. … Then you could get an overview of how the system as a whole, works.”

Underpinning the speakers’ visions of a blockchain future were at least optimistic if not utopian hopes that these new networks would also positively impact society. Joel Monegro, on the investing team at Union Square Ventures, contrasted tokens with stocks. “At a high level, a share of stock in a company means a proportional right to the profits of a business,” he said, adding that this, however, drives the holders to increase profits. “The problem is when companies are driven to increase profitability, they end up creating market failures because they expand too broadly or vertically into new business areas where they find it difficult to compete or amass market power,” he said. “The other problem with equity is it incentivizes the holders of that equity to hold as much of it as possible to concentrate the equity because it represents a perpetual right to profits.”

Tokens, he said, invert those incentives. “A token has financial value when the network or service it represents is being used an increasing amount, so you’re not incentivized to get a company to increase profits but rather incentivized to get as many as people as possible to use the service,” he said. This then leads to the value being distributed more broadly. William Mougayar, a venture capitalist and author of The Business Blockchain who is organizing next week’s Token Summit (and was a recent guest on my podcast), said that everyone has three jobs: First, the traditionally defined job — work you do for a paycheck — and then the work of taking care yourself and your family. “Then the third job was the work given to us by another company,” he said, “whether it’s buying a ticket or renting a car — all kinds of jobs are being given to us, and we’re not being compensated. However, in the future, more and more, the work we’ll be doing, whether it’s passive or active, will be compensated by a token of some sort.”

Other panels and presentations discussed everything from conscientious consumption via supply chains (in which SlaveFreeTrade president Brian Iselin removed his clothes on stage) to getting identity on the blockchain from birth; from whether the media has a responsibility to give a new technology like blockchain positive coverage to what it looks like to have many city functions run on blockchains; from what a decentralized entertainment network looks like to why this may be cryptocurrency’s “Netscape moment" (built, not on bitcoin, but on Ethereum).

The wide range of applications made possible with blockchain technology was reflected in the crowd, which seemed more creative and diverse than most blockchain conferences. On Thursday night, at a pre-conference cocktail party, while enjoying spicy snapper ceviche, black bean taquitos and steak, an economist and  Singularity University graduate talked up his work on Crowdjury, a network that will enable us to serve as arbitrators in other people’s disputes using tokens, and a virtual reality artist showed the art he had created using data from NASA and NOAA.

It was a scene reflected in Lubin’s closing remarks the next day. Remarking on how he majored in computer science and electrical engineering as opposed to economics, he said, “I was a computer nerd growing up on Star Trek … It was obvious to me that the geeks would inherit the earth.” Then, describing how 9/11 represented, for him, a loss of innocence that led him to explore the global economy and conclude that it was morally bankrupt, he talked about how top-down command-and-control methods had gotten society to a certain level of progress but “decentralized economic, social and political systems will be more effective, more fluid and far less susceptible to corruption.”

He finished with, “Many times, people have said to me and other ConsenSys members, You guys are going to dominate, you guys are going to take over the world. The whole point of decentralization, the Ethereum project, the work we do with ConsenSys is the exact opposite. We’re working to enable the planet to better organize itself, and we are building technology that we believe will make it impossible for any subset of actors to take over the world. Welcome to the decentralized future.” A whoop of cheers went up. Across the street, beers, bites, and beats awaited the attendees, who continued spinning up their dreams of the future in the summer night breeze. Ether, having started the day at $97, finished it at $127.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

 

Alan Zibluk – Markethive Founding Member

Bitcoin Price Breached $2,000, Pundits Coin-Flip What Comes Next

Alan Zibluk – Markethive Founding Member

Bitcoin Price Hits $2,087, Trading in Japan, South Korea for $2,350

Alan Zibluk – Markethive Founding Member

Palestine Considers Launching Its Own Bitcoin, But Why Reinventing Wheel?

Alan Zibluk – Markethive Founding Member

Alan Zibluk – Markethive Founding Member

Alan Zibluk – Markethive Founding Member

Can Applications Communicate Over Blockchains?

  

The author Benedikt Herudek pushes the frontiers of decentralized systems in describing how Turing Machines can communicate over Blockchains.

We will suggest introducing Turing Blockchain Machines, using Blockchains as a Turing Tape. Turing Machines are a simplified yet powerful Model for Computability and the every-day life programs we design and use. We introduce them as a ‘Gedankenexperiment’ on an abstraction of Blockchains as Turing Tapes with specific features to try to answer the question, if applications could communicate over the Blockchain.

This endeavor is connected to the question, how far we can push Software Decentralization and with them human relations and society organized by them? Decentralization is a promise because the Implications of using Technology in the way Bitcoin does, suggest it is possible to defeat large cartel-like organizations, which sit right and accepted in the middle of society.

Technology does have a liberating power if designed right: kicking out ‘middle-’ or ‘highwaymen’ is one of them.

The question raised here (we are not ready to give an answer) is a connected precursor to the vision to endow Blockchains with a ‘Turing Complete Language’. Such Blockchains, foremostly Ethereum aim to have ‘programmable money’ and want to allow decentralizing any application logic, (not ‘just’ money). The approach suggested here aims to have any kind of signal (not ‘just’ money) exchanged via Blockchains, such that it is clear ‘what it means’. Both approaches have in common to attempt to generalize Bitcoin‘s Blockchain approach.

Ingredients of decentralization

If you purchase a good or a service from someone, who doesn’t happen to be your neighbor or a family member, you typically need these three ingredients.

1. ‘Money’ and an accepted way to pay, like cash or electronic payment
2. A common nomenclature as a basis for agreeing what you buy and the seller sells
3. A governance framework to ensure you get what you ordered, you pay what you received and can dispute if appropriate

One form of trade trading over the Internet, private-public key cryptography and browsers are practically indispensable but taken as a given here. When you want to decentralize trade in this sense you need

Regarding (1):
Bitcoin. Bitcoin solves the double spending problem with a distributed System and a ‘hardened’ Ledger based on the proof of work mechanism

Regarding (2):
We can solve this problem if we can prove that Turing Machines can teach each other languages over a Blockchain. This is the focus here.

Regarding (3):
Turing Complete Blockchains, e.g. Ethereum. If we can establish

Smart contracts which are distributed, verifiable and ‘unstoppable’ we have a good chance to digitalize and decentralize important and relevant parts of governance Above listed ‘smart contracts’ realm is sometimes referred to as ‘Internet of law’ as opposed to ‘Internet of money’ referring to Bitcoin and other digital currencies. In the digital realm you can easily imagine one get music files delivered, based on cryptocurrency payment was done or certain conditions (amount of clicks on your post) are fulfilled. Where conditions and delivery lap over into the real world (like delivering a book after you successfully ran a marathon) currently it takes a bit more imagination (and IoT, sensors and maybe even Artificial Intelligence) to imagine the general working of such smart contracts.

Note that questions like ‘Can Machines teach languages’ or ‘Can Machines understand each other’ are rather ‘fuzzy’ questions. They can easily lead astray into questions like ‘Can Machines Think?’ With Chomsky and others, it is important to realize that these questions are ultimately questions as to which metaphor one wants to choose. A better way is to reuse Alan Turing’s approach and try to formalize the question such, that it can be answered.

Half way decentralization

Imagine you ‘don’t mind’ a translation layer as described above in (2). You only mind (1) the decentralized payment and (2) a Turing complete language as part of the Blockchain. Then, you set out to build a new kind of marketplace, a ‘decentralized eBay’ on top of it. Your infrastructure and your payment are decentralized, still, you will end up with a ‘large monolithic application’.

Even on decentralized platforms, for applications, some kind of organization has to define the rules, e.g. how to offer and purchase goods, which data formats they need to use and so on.

Everyone will have to abide the rules that ‘decentralizes eBay’ set up. Even if the founders have best intentions to not monopolize the process, centralization will have to happen because of the basic architecture of the System. A typical answer to this centralization on the Turing complete Blockchain is the so-called ‘Decentralized Autonomous Organization. The idea is essentially the organization defining all rules needed to run the applications, is itself democratic and decentralized.

But however well intended and efficient a Decentralized Autonomous Organization would be, it is still an institution to force parties into agreements on how applications should be set up. The more successful a DAO is the less an individual voice will count, the less autonomy there will be and the more centralized the DAO will look to the individual.

Seeking Decentralization in rich applications on top of a decentralized turing complete platform will lead to centralization on the Blockchain. The ‘trick’ to avoid this ‘successful DAO dilemma’ is to not place entire Applications on an immutable Blockchain. Rather, only the transactions that concern Communication between two parties should go to the Blockchain and only on those (but not on the entire Application Logic) should parties have to agree. To allow innovation you need to give autonomy to their applications and force them under agreements on the shared Blockchain, only where absolutely necessary. You want to keep your network dumb, allow autonomous edges to run innovation.

With ‘decentralization’ we foremostly target towards certain effects on power and social relations we would like to see in the real world, like e.g. making banks unnecessary for payment traffic and central banks obsolete for monetary (specifically inflationary) policies. Technology is an enabler only and technically, decentralization these days is typically implemented by a Distributed System with a consensus system, to ensure there is just one truth in spite of many copies of the shared database. If you stress values like ‘autonomy’, ‘resilience’ or ‘simplicity’ in your system you could with some right also claim that paradigms like ‘Service Oriented Architecture’ or ‘Micro-Architectures’ should be seen as part of the Decentralization Paradigm. Those are architecture patterns, describing how Systems can communicate while being decoupled. They are typically mentioned in an enterprise context and do not have the privilege of carrying the sub-service odor of Bitcoin but they certainly are architectures carrying the possibility to not build ‘huge monolith blocks’, which is really just another expression for ‘not Centralizing’. Some describe Microservice as Service Oriented Architecture without the so-called ‘Enterprise Service Bus’. This is the Integration Layer, which tends to take over a lot of logic like routing and translating different nomenclature. How ‘smart’ you want to design your network and how much logic you want to put into it, is a recurring theme in designing Systems and can have surprising effects, what power relations Systems can implicate.

Of course, there are legitimate usages of a turing complete Blockchain, e.g. for the Internet of Things. Nothing stops one (e.g. if one prefers DAO’s over conventional companies and that does hold a lot of promises) to rewrite known applications on a turing complete Blockchain. However, for the context we are looking at it, turing complete Blockchains main usage would be to – one fine day-(semi-) automate governance with smart contracts.

Automating Translation

Here is why you should care about (2), the translation layer: Your main reason, why Amazon or Ebay has a website you go to, is that it allows you get in touch with the creator or owner of something you would like to have. It allows you to pay (1) and when you paid, it gives you a governance framework (3) to ensure the process (like shipping) works for you because there are legal frameworks behind both the platform and the vendors offering their goods. Somewhat hidden is the fact that the platform delivers a significant (2) ‘translation exercise’ for you. That would be obvious if a Spanish person offers a good offered over eBay by a Chinese person and both only speak English. The platform just sets a common standard (English), how these people can interact. But that would be just the UI surface, the platform itself sets all kinds of standards that enable interaction: The vendor has to accept a certain User Interface and with that, a certain data format prescribing, how the article pictures and descriptions are rendered. That Data format to offer goods then works perfectly with the data format prescribed by eBay to purchase goods, which is the format working ‘under the hood’ when you press the order button. Ebay, in fact, acts as your translator, you have to pay for that. This might be more obvious if we think through this situation in a B2B context where companies would offer and order good via message Systems, automated and without a User Interface. The messages to offer goods would need to be matched with the messages wanting to buy goods. Someone needs to translate these messages into each other.

Typically this just happens via the man in the middle setting a standard. This is the common way these days to establish common terminology allowing applications to talk: per definition. In a typical enterprise, if you want two applications to talk to each other, you make a design, where both parties agree with which messages eg in formats like JSON or XML they will communicate. Whoever went through this, knows this can be a painful process and doesn’t make your projects ‘exactly agile’. On a broader scale, you will have entire bodies with the goal to set standards, like eg the World Wide Web Consortium. Many have good intentions, but the necessary effort and time for meetings and achieving agreements is not a healthy environment for fast innovation. Worse, there are ‘information-cartels’, whose business model eventually depend on establishing and dominating standards allowing people to connect. Ebay and amazon would dominate, even if we would all pay with Bitcoin and even if they were rebuilt on ethereum and ran as a DAO. But all they do is make sure technically people get in touch with each other.

Establishing a common nomenclature per definition is not only stifling innovation it also opens up the backdoor for monopolists and decentralization.

A different way of establishing communication could be to use an approach similar to how we translate natural languages with machines like google translate, essentially we just have a look at how so far parties communicated and draw our conclusion for the future. One could easily imagine building a general machine translation ‘google translate for apps’: all kinds of messages connecting different Systems would be fed in, working translations (typically initiated by humans via above described ‘definition’ approach) would be used to bootstrap the engine and then a self-learning ‘google translate for apps’ would be set up to translate message formats into each other. With the size and clumsiness of the Application Integration Business, it is a surprise, enterprises didn’t use Neural Networks to widely automate this part of the Application Integration Business, just as a decade ago cloud computing started automating (in the sense of ‘hiding from the client’) hardware setup.

Even more so because you don’t have to come up with fancy neural networks to predict, how some Systems will communicate. You could just say if two applications are part of the same industry, they probably use standard XYZ, if they are from the same vendor they probably use standard ABC, if similar Systems have used message formats 123 before for similar cases these two fellows might need just the same, maybe you can parse an XML and reassemble it with some other names and the target system will ‘eat it’. Sometimes a ‘nice & long if then statement’ is just about right.

But doing trade predicting future terminology based on the past just isn’t good enough in many circumstances. Sending Bitcoin over the Blockchain and establishing smart contracts on platforms like ethereum is a binding agreement, which absolutely cannot or should not be changeable: immutability leaving no room for disputes is the cornerstone of such use cases. If you inject now a level of uncertainty as to what your terminology was really supposed to mean, you open the backdoor for irrefutable disputes Imagine Application A sends a message, B takes the translation from an Integration layer, reasoning (‘messages XYZ usually mean in other contexts ABC for applications like me’) and delivers an expensive good. Now, A can always claim ‘well, you misunderstood me. The fact that in cases before the message XYZ translates into ABC doesn’t hold here. I want my money back.’

Predicting future translations based on past successful translations isn’t good enough for Blockchains and the level of trust and binding agreements to base smart contracts on them.

Another way of thinking of this is the following thought experiment. Imagine, a Mars-UFO lands in Amsterdam, Central Station. It’s an unmanned ship, but there is a pretty smart Computer inside. We want to communicate with this device. Connect it to the best and super-trained machine Language Integration layer. It will deliver no results, because saying that our ‘earth-machines’ communicate in ways XYZ, doesn’t mean anything for ‘mars-machine’. Even if we think we ‘understand’ the machine (with an assumption as ‘there are only so many ways how digital systems can operate’), we never really know, if we understand the machine correctly. Now, if ‘setting standards’ stifles innovation, fosters centralization and ‘predicting based on the past’ isn’t a safe enough bet, one way out of the deadlock could be machines teach each other the language, unambiguously and retraceable over an immutable Blockchain, with which they will transact.

Talking Turing Machines

A ‘Blockchain Turing Machine’ is a conventional Turing Machine with the following specifics:

1. The Blockchain is the shared Turing Tape. There is one machine sending, while the receiving machine is attempting to detect the state machine table of the sending machine
2. More general, in a Blockchain Turing Band, we will have several participants talking to each other. For our purposes, we will just consider one pair of sender and receiver
3. Machines can never erase fields, that is for one direction when they move they can only read but not write. This is reflecting the Blockchain immutability feature.

State Machines would be any Applications behind an address, which write transactions onto the Blockchain to communicate with other Applications. There would be no Turing Complete Language, the endpoints, however, could have any Turing Complete Language and any rich features they like. The logical translation and communication layer would be connected to layers for payment and governance, the latter potentially turing complete.

Here is a simple example, Bit Inversion.

The Sender holds a State Machine with the Following State Table. So we write a 1 and move the tape right by one square. The symbol being read is now 1, so we write a 0 and move the tape right by one square Similarly, the symbol read is a 1, so we repeat the same instructions. If, in any case, the Receiver can ‘figure out’ the state table of the sending Turing Machine only if the Sender presents ‘all he got’ (operations, symbols) within a fixed time limit. With that in mind, our question is:

Can we describe a Blockchain Turing Receiver Machine, that is capable of noting down any Blockchain Turing Machine Sender state table unambiguously while watching all the Senders operations and symbols on a shared Blockchain Tape?

If this is the correct question, then one way of investigating is going over the numerous theorems proven over Turing Machine to see what they can contribute. Some other interesting questions to investigate could be:

1. Are Blockchain Turing Machines (no erase possible) useful
2. Do we need to restrict the language types (e.g. along the Chomsky hierarchy) sending Machines can use to make translation for the receiver possible
3. Are there languages or certain statements that can in principle not be translated unambiguously?

We will not discuss those but ask, how we could interpret a ‘yes’ to the question we ask. My conjecture: It means ‘quite a bit’. Take a Computer Program that essentially ‘figured out’ what another Application does, of which it ‘just sees’ some messages. It means this program ‘knows’ what these signals mean and can, therefore, initiate appropriate action. Now, it’s a quite a leap from the Turing Machine sparse notation towards a full Web or Enterprise Applications sending JSON or XML message (‘Clients want a uber- ride Berlin Brandenburger Tor to Tiergarten right now’). But that’s the beauty of Turing Machines, they are simple but can simulate essentially ‘anything’ you need in the digital world. Note also that Applications absolutely do not need to know everything about each other, lots of the typical application logic (how the app works to order an Uber ride, what internal states are saved, how the UI works) is entirely irrelevant to the trading partner (the individuals offering the ride application): Only the transactions counts and that is often much simpler than the entire application producing the message.

Having such a Blockchain Turing Machine Translation Mechanism (transforming a Blockchain into a ‘Babel-chain’ if you will), would have considerable advantages over the above-listed Mechanism to connect Application. The Mechanism wouldn’t offer any ‘wiggle – room’ and no room undue transaction fees. Take the approach, where we assume Application ABC ‘probably meant that’ because similar applications ‘meant that’ in ‘similar cases’. You can’t base important transaction on that unless a human checked it. Because whoever ordered, could always argue there was a misunderstanding, and in this case, the machines cannot just conclude from the past to the future. If you involve humans to review Machine translations or simply set standards for communication from the beginning, you will have all the disadvantages that ‘middlemen’ bring along, best studied with the example of Banks: They will want a share of your transaction, even though they add little value other than facilitating a transaction. They tend to inflate their importance beyond their due position.

If you can automate the translation between Machines and run this over a public and immutable Blockchain, you leave no room for misunderstandings no backdoors as to what ‘was meant’. Everyone can check the ‘understanding handshake’ and the language the two machines agreed upon for their transaction. There is no place for humans or organizations taking an undue tax on your producers and consumers transactions.

After the terminology is agreed, the transaction itself goes into an immutable and verifiable Blockchain, payments and governance can be processed. If we can’t make turing machines teach their language we need to revert to one of the two other ways to make machines talk. Agreements can work, the internet, for example, is widely build on accepted standards like http and smtp – it works, but it is hard to imagine how you could get monopolists agree to standards today. Making a prediction based on past experience can take us far but also only so far as to the binding character we would like to see on Blockchains. A hybrid approach could be another interesting option, where you agree for example on an algorithm to generate translations based on past working translations. And the agreement is that whatever a certain algorithms spits out, will be the agreed message format.

Request for Comment

Decentralization is the task of relieving us of the ‘middle-man’ tax. Gain and fame should be with the producers of goods and much less with cartels dominating trade – just like banks should have a serving, not a dominating role in the economy. Technology allowing true peer2peer transactions with no room for centralisation can play a liberating role. Avoiding centralisation in Networks implies placing the rich application in autonomous endpoints of the network. Doing this requires making ‘Applications talk’ such that there is no human intervention required and certainty over common nomenclature. Asking the question, if Turing Machines can communicate over Blockchains is a way of trying to push the frontiers of Decentralised Systems.

Chuck Reynolds
Contributor
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Alan Zibluk – Markethive Founding Member