Chain Games – Ethereum

I want to start off by saying that a lot of money, and therefore work, effort, and peoples livelihood are invested in this stuff, and I want to be somewhat sensitive to that fact. I’ll say some things that may hurt, especially if they are true, and you are currently getting burned by them.

My goal is a successful Ethereum ecosystem, first and foremost. No one can claim to care for this technology more than myself – I fell in love with the idea, and changed the course of my life to become part of it. To me, a healthy Ethereum means ONE Ethereum network on top of which, we can all run our separate applications that can directly talk to one another without technical limitation.

Ok, but a disagreement has taken place. This apparently is something that can happen. Voice and exit should be an acceptable response to disagreements in a free system, so I fundamentally agree with the idea that Ethereum Classic is viable. 

I didn’t fully predict whats happening now, and obviously most people didn’t. Ethereum is bigger than us. We don’t have the controls that many of us thought we did. This is OK. We are actually experiencing the raw power of a freedom engine that the world has never seen before. The blockchain plays no favorites. It simply offers a set of mathematical guarantees; Whereas our current system of rules/laws/regulations is complex and interpreted by mere humans. As such, I believe Ethereum may someday create a type of economic stability, a backbone, that our future societies can count on.

In human controlled systems, we will always have different interpretations of what is corruption. For example: Some have said that the creators of TheDAO were corrupt. More blamed the DAO hacker as the corrupt one. In response to this corruption, Ethereum was hard-forked (which quite literally required corrupting the database). The decision seemed to come from the most notable faces of leadership in the space, but it did indeed have a majority of users on board.  You will now hear voices saying The Foundation was corrupt in bailing out the DAO creators, investors, and themselves.

So corruption begets corruption begets corruption. Who is right and wrong here?

…I contend that this is simply the wrong question. The only question I’m interested in, and have ever been interested in is: How can we create the most value and prosperity for society?

Of course, the answer to this is a complex one, and we are bound to disagree with it as well. The behavior of “Money” itself is one of the most difficult things to understand in all of economics. Its true that only we can give it value, but there are and have been many different viewpoints on what steps might be best to handle its creation/distribution. Generally these decisions have been made by people in power, or better yet, by democratic majority vote.

This is where I actually get very excited. For the first time in history, a minority has affectively chosen their own monetary policy in a completely free/opt-in currency system. Instead of the minority being kicked along by popular vote, they were able to take a tiny chunk and already improve its value. This value is based on the implications of such a currency. The small minority that see value in it, are surprising the world by how much value they see.

But lets get back on track. The real question is how to create our best future from here. I have a solution that might enable the network to merge.

OK, but what about the few people who believe its a good thing that there are now multiple networks. Why do they think that? They think so because they believe philosophically that the 2 chains have different visions and are better apart. Mostly these are Classic supporters who want a truly immutable blockchain. Well, I would argue that ETH supporters actually want that too. The difference was that they were willing to make the compromise. They simply thought it was worth breaking the social part of the contract in this specific circumstance. The logical ones can admit in hindsight that this was a mistake (umm… it nearly destroyed Ethereum). My solution is based on the idea that the coins ETH vs ETC, could be up for debate, while forfeiting the protocol debate to Classic.

In a future release of Ethereum, the token itself is defined simply by a contract just like any other. Miners can accept gas payment in any currencies of their choosing. In that ecosystem this whole thing could have played out very similarly, but on one chain. Here’s how: Dao hacker steals 5% of funds, and locks the rest up. Vitalik and the leadership ask us to do a currency swap like so.

  1. A New token is created ETHN
  2. In order to create those tokens you have to submit your 1ETH:1 ETHN
  3. ETHN can, at any time be traded back through the contract to release ETH
  4. DAO tokens are also accepted into the contract at their pertinent ratio 100DAO:1 ETHN
  5. Before the darkDAO funds unlock, the window is closed in this direction.

The result of which is that the 85% who were pro the fork, will begin using a token which is distributed precisely how ETH would be sans DAO attack. Another 5% or so, myself included, who were against a fork, would have actually gone for this. After the darkDAO became free, the price of the original token would most likely still fetch a good price. Although never exceeding ETHN. This is based on the game theory similar to whats playing out now with Classic. Maybe most of the ETHN holders would funnel their funds back into ETH. Most likely this model would play out as total ETH being worth ~15% of total ETHN (the amount lost in TheDAO), but the point is, that we can chose our currency and monetary policy without having to choose our platform, and the network can live on agnostic to our regularly overplayed political monetary disputes…

So is this possible to fix retrograde? short answer: No. The current version of Ethereum only allows the chosen token Ether to be used as payment for gas.

However

  • It’s is already possible to create a 2-way-peg between the networks, where sending a coin in 1, can unlock a coin in the other. This means you could move ETH into the classic chain and vice-versa…
  • The plan to turn ETH/ETC into a standardTokenContract is already in the pipeline (meaning Ether will have no special privileges). Classic will mostly accept this fork.

I’m currently researching the possibility of combining these concepts to incentivize a natural merge. I am still conceptualizing, so please help spitball. There are no wrong answers.

 

 

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