Bitcoin Core Dev Peter Todd: Blockchain Is An Advanced Counting System
Peter Todd is a Bitcoin Core developer and a crypto anarchist who did a lot of researches on blockchain security and contributed to the Bitcoin code. Some people think that he is Satoshi Nakamoto himself. Peter neither denies this point nor proves it, and prefers saying that Bitcoin is based on the power of mathematics and not on the value of a single person. Actually, Peter prefers thinking that Satoshi is a result of a super intelligence or even AI, interfering in the human history.
Todd's first post on Bitcointalk appeared back in 2010. Even such legends of the crypto world as Nick Szabo recommended consulting with Peter to answer the questions they could not. Peter has a diverse background: he earned a fine arts degree, worked on geophysics startups, and also maintained the Python-Bitcoinlib and OpenTimestamps projects. Today, he is mainly focused on blockchain security and scalability problems.
Blockspoint met with Peter to discuss the current state of the blockchain industry and limitations of the Bitcoin security system, as well as to define some future trends of the crypto sphere.
Peter Todd meets Bitcoin for the first time: Oh, sh*t! I should have figured that out
I used to work on a distributed ledger database with a timestamp server before Satoshi released his Bitcoin whitepaper. It was back at my high school. My father was an economist, and I was interested in different kinds of crazy cryptography things and a new way of economy. My system was called UUID, and it was aimed to uniquely identify some electronic artworks — something like pre-Bitcoin. But I failed. Much later, in 2009, I finally read Satoshi’s work and my first response was, ‘Oh, sh*t! I should have figured that out’.
I knew from the first glance that the system might work. I had no hesitations, and the whole system seemed to me very elegant and still powerful. It was a few years later when I started thinking about risks and bad guys that were trying to make it collapse. So I was more involved in the Bitcoin development from the critical perspective and tried to figure out how it could be broken. Bitcoin is secured. But like in any soft, you find some bugs and you’re going to fix it. The fundamental issue is that Bitcoin has always been a limited capacity system with an auction mechanism to bid for that capacity.
Many people confuse the Bitcoin Core with the Bitcoin protocol itself, which is similar to confusing Mozilla with HTTP. The Bitcoin Core is just a group of devs and researchers. All the developers working on the Bitcoin Core are paid somehow. A lot of people are interested in funding this technology. Some of them believe in Bitcoin power. The design of Bitcoin has privacy compromises compared to what you would have done in centralized systems. But centralized systems are not able to do that. There are many ways to make extremely private accounts and transactions for Visa, but they do not want to do it because it is better for them to steal your transaction data and to sell it to someone. Some authorities are searching for the ways to freeze people’s money and are trying to get the full surveillance of what we buy online — which is obviously a kind of dictatorship. And Bitcoin is just an attempt to provide an alternative to that. Bitcoin lets you donate money to resources like WikiLeaks which is not popular among all of the political spectrum.
Blockchain is suffering from scam and hype
Everyone knows that blockchain has some problems with scalability but we can overcome this problem. We are on our way to it. When people come and say that they have invented a brand new blockchain with 20 000 transactions per second — it is a scam. If a company manager can explain you in ten minutes the technology it is probably a scam. These teams are just lying to everybody to get some investment. Not all projects are scams, but some of them just have very bad ideas which do not work. We have to be sincere that most of dapps do not work today.
There are a lot of scams in the market. When you go down following the rates at CoinMarketCap, there is a great possibility that everything there is a scam. You can see such a weird stuff as Dogecoins. There are also very strange projects like Tether. By the way, Tether is the case where not being a scam and being a scam are equally bad. If USDT is backed by USD, it means regulators can easily take that money.
Integrating tokens into some protocol can work very occasionally. Projects selling their tokens to people will collapse and discredit all the industry which is obviously very bad for everyone. There are too many useless tokens because when you want to buy some services you just pay money and do not buy tokens first in order to be able to buy the services. To be honest, we do not need so much tokens involved.
An electronic voting system on blockchain is a very dangerous idea right now. There are many companies trying to implement voting systems that don’t work and to sell the products that were made just for gaining an easy profit. Governmental guys are not very good at tech stuff. If you’re a government, you may not like a certificate’s transparency because it means that you no longer can hijack websites, which can be a big problem.
What is blockchain and why do we need it?
Blockchain is a very broad term. It depends on what you talk about. There are very decentralized and very centralized things. Cryptocurrencies are forced by communities and there are many smart and motivated people working on them. But sometimes there are smart people who are motivated by wrong things like greed or totalitarian control. I define it as a simple chain of blocks which is a really useful data structure. It is just a better counting system. Is it able to revolutionize the world? Might be, if people would use it in such a way. Often, scammer use the term blockchain in order to push things that do not really work or even exist. But on the other hand, there is a real industry with real companies solving existing problems.
If it was not all about hype, blockchain would be more a technical term. The companies developing blockchain systems somewhere under the hood of their production do not need much to advertise it. I mean, you might use one on your phone right now to verify SSL certificates. And blockchain really can revolutionize this industry because there is a lot of fraud in the SSL business. From a security point of view what do we really prevent is that nobody signs twice. It is very expensive to cheat Proof-of-Work. Blockchain is just a tool, so it can improve some transparency if you need it. Blockchain is like a wax seal. It is very difficult to make a fake seal. SHA256 makes it nearly impossible to find two messages with the same commitment.
I believe in the future we will see a broader community with much deeper understanding of what blockchain is and why it is useful. Now, I intend to work on things that do not need a consensus. I do not want to ask a permission from miners or wait for a validation. I would like to create a structure based on a client-side validation.
Photo: Sasha Che