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Offline bytemaster

Decentralized Autonomous Jedi Mind Tricks
« on: March 30, 2014, 04:09:04 AM »

Decentralized Autonomous Jedi Mind Tricks
Daniel Larimer & Charles Evans

In December David Johnston, one of the developers of Mastercoin and co-founder of cryptocurrency angel investor network, BitAngels, published "The Emerging Wave of Decentralized Applications" on github, in which he describes Bitcoin and next-generation systems—specifically, BitShares, Meshcoin, and Mastercoin—as 'Distributed Applications' as distinct from the original Distributed Autonomous Corporations (DAC).

Johnston argues that this new phrase is preferable because it avoids associations with regulated entities, like currency and corporate shares, and because the thing being described is a piece of open-source software that defines a protocol that can be modified only with the consensus of the community of programmers who maintain and extend the code base.

While avoiding misunderstandings caused by the literal interpretation of an analogy has merit, Johnston includes the issuance of tokens as a defining characteristic of a Distributed Application, even though software applications, per se, do not require tokens. In other words, DACs are a specific subset of Distributed Applications that involve the creation of tokens—whether one calls them 'coins', 'shares', 'chips', or whatever—and to dispense with the DAC analogy is to call a subset by the name of its superset, rather like referring to pit bulls as 'canines', because pit bulls are regulated in some jurisdictions. The choice of name does not change what a thing is, and animal control agents are unlikely to shrug and walk away satisfied if one points to a pack of pit bulls frolicking on one's front lawn and declares, "Oh those?  No, they're just canines. These aren't the pit bulls you're looking for."

A Meta-Analogy

Imagine you just discovered electricity and all of the amazing things that it can do.   There are electrons that flow around, wave forms, and other fundamental building blocks.   People want to start using this amazing electricity concept to build useful and productive circuits, but they lack a mental framework that helps them intuitively understand and predict the outcome of a particular circuit structure, and even advanced mathematics can only approximate it due to noise in the environment and imperfect measurements of the components.   Relying on math alone to simulate the expected results is time-consuming.  To design systems you need intuition and abstraction.

So, someone comes along and says, "Wow! Electricity works just like plumbing!  It flows like water. There is a 'pressure' in the circuit. Resistors are like narrow pipes..."  If you think of an electrical circuit as a kind of electrical plumbing, then you can apply everything that you intuitively know about what works in plumbing systems to help design and understand this new fancy electricity thingamajig that we just discovered, without having to resort to math until after a high-level design is in place. 

Best of all, you quickly discover that teaching students about electricity is an order of magnitude easier using this metaphor, and as a result they quickly pick up the concept and are able to apply it in useful ways.

Now imagine that the plumbing industry is highly regulated and requires licenses.  Anything that moves a fluid through a pipe, stores a fluid in a tank, or employs a pressurized system is subject to fees, regulations, and restrictions on its use. Plumbing might even be illegal in some places!

Members of the plumbing industry hear of this new metaphor for describing electricity and want to regulate electricity with the same laws the apply to water and plumbing.  They might even want anyone who works with electricity to go through the full training, apprenticeship, and guild membership process that applies to plumbers.

In order to avoid this kind of absurd situation, one must emphasize the distinction between what something is and the metaphor used to teach how it operates.  Those using electricity don't care about how it works or how it is classified. They just want the lights to come on.   For this group you simply call it 'power' and nothing else is required.   But, when you are trying to teach people how to use power to do things, you need a metaphor.   

DAC is the metaphor that holds the key to designing the kinds of Distributed Applications Johnston describes.    Bitcoin is a token-issuing Distributed Application that is most easily understood using a currency metaphor.   BitShares is a token-issuing Distributed Application most easily understood via a Bank, Corporation, or Exchange metaphor.   

If we are afraid to use metaphors due to fear of regulators, then we will harm the ability of users to understand how and why token-issuing Distributed Applications work in an intuitive level and also hinder how they are designed.   One should never underestimate the power of the Dark Side. Regulators are not as easily distracted as Imperial Stormtroopers. Renaming a DAC is neither necessary nor sufficient to avoid attracting regulators' attention.

Many people have come up with DAC ideas, but it is clear that the first principles behind creating Distributed Autonomous Applications are not yet well understood.    The DAC metaphor is the key framework that helps to design and implement token-issuing Distributed Autonomous Applications.
Seen this way, Bitcoin is the first DAC. The service that it provides that has attracted the greatest attention is payment services, and new uses are discovered with surprising subtlety and frequency.

However, when seen in terms of shares rather than coins the tokens that the Bitcoin system issues warrant closer scrutiny. In particular, note who in the Bitcoin system holds the voting power: the transaction processors, known metaphorically as 'miners', and the holders of bitcoins are passive participants. Miners control the majority of the computing power that makes up the Bitcoin system.

Seen as a company, the holders of bitcoin-the-unit own non-voting shares. The miners have all of the voting power.

As a payment protocol, this obviously is not a devastating problem. Otherwise, Bitcoin would not exist. As a company, on the other hand, this is like having the vast majority of shares in circulation stripped of their voting rights, and all of the voting power concentrated in the hands of a small number of parties who might not even hold the bitcoins—that they receive in payment for their services—longer than it takes to sell them. This situation is unusual in countries that tend to attract a lot of foreign investment, like Australia, Canada, the UK, and the USA. It is much more like the large, family-owned combines that one sees in the Developing World.

Carrying the company analogy a bit further, the goal of maximizing the 'equity-per-share' ratio replaces the goal of maintaining a constant 'backing-per-currency-unit' ratio in a currency system. With a currency, the general tendency is to strive for a stable price-per-stuff ratio. Granted, one can argue in favor of a truly deflationary currency, but this continues to be a minority view, and the default is stable prices for the vast majority of currency users. Shares, on the other hand, are expected to pay dividends, appreciate in value, or both. When we think of a DAC as a company, rather than as a mint, the idea of units that increase in value comes more naturally.

If the conversation were about Distributed Applications, none of this might stand out as noteworthy. If the conversation is about DACs, these issues stand out like a Klingon at a Star Wars convention.
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Offline .dac

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #1 on: March 30, 2014, 05:50:12 AM »
much ouch.

I hereby banish myself from the Bitshares community.

Let nobody ever speak my infernal name again lest you be cursed with hoards of IRS tax collectors swarming upon you like locusts. I really wish I could have gotten to know you all better.

Again, I'm a day late and a dollar short.

Offline onceuponatime

Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #2 on: March 30, 2014, 06:51:02 AM »
much ouch.

I hereby banish myself from the Bitshares community.

Let nobody ever speak my infernal name again lest you be cursed with hoards of IRS tax collectors swarming upon you like locusts. I really wish I could have gotten to know you all better.

Again, I'm a day late and a dollar short.

You're not a "dollar short". I tipped you 1 PTS after your second posting  8)

Offline JoeyD

Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #3 on: March 30, 2014, 11:53:35 AM »
Could someone put up a newbie to-watch-list for scifi-series/movies in order to make sense of the references on this forum. My mastery off Star-Wars-lore seems to be lacking, because seeing the movies one time in the eighties as a little boy apparently is not enough. That was also around the last time I've seen a few Star Trek episodes.

I'm ok with most cyberpunk-references though, I'm voting for more Blade-Runner-references, because it's just better than The Matrix.

Offline Stan

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #4 on: March 30, 2014, 01:08:24 PM »
Could someone put up a newbie to-watch-list for scifi-series/movies in order to make sense of the references on this forum. My mastery off Star-Wars-lore seems to be lacking, because seeing the movies one time in the eighties as a little boy apparently is not enough. That was also around the last time I've seen a few Star Trek episodes.

I'm ok with most cyberpunk-references though, I'm voting for more Blade-Runner-references, because it's just better than The Matrix.

This whole forum is one big "to-watch-list".
We must continue to advocate the highest levels global culture!

Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline JoeyD

Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #5 on: March 30, 2014, 01:17:10 PM »
Could someone put up a newbie to-watch-list for scifi-series/movies in order to make sense of the references on this forum. My mastery off Star-Wars-lore seems to be lacking, because seeing the movies one time in the eighties as a little boy apparently is not enough. That was also around the last time I've seen a few Star Trek episodes.

I'm ok with most cyberpunk-references though, I'm voting for more Blade-Runner-references, because it's just better than The Matrix.

This whole forum is one big "to-watch-list".
We must continue to advocate the highest levels global culture!

Lol, fair enough.

Come to think of it, since we're trying to be global and neutral, this forum might indeed be a good place to inform people of culturally different views in relation to companies and profits and such. Since I'm born and raised in Europe, I've been completely molded in the Christo-Judean way of thinking (and after that it doesn't matter anymore if your atheist, agnostic or theist) and I admit that I haven't got a clue how other cultures view the world.  It might be pretty hard to think global if the only input we're using is from a single culture-perspective.

EDIT
First of all I'm Dutch and our culture already seems to be quite different from even our close neighbours, one of which even speaks the exact same language.

Some things I've noticed that seem to be viewed differently uniformly from East to West:
Reputation (honor)
Short term/linear (west) vs long term/cyclic patterns (east)
Loyalty/family
What westerners perceive as democracy
« Last Edit: March 30, 2014, 01:25:44 PM by JoeyD »

Offline unimercio

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #6 on: March 30, 2014, 01:26:54 PM »
 +5% Yes, if "The Federation", "Klingon" and "Jedi" could resolve difference, set aside egos and stop "Venting Plasma", "Empires" would crumble across the quadrants ("Q" willing). 8)
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Offline graffenwalder

Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #7 on: March 30, 2014, 01:32:05 PM »
Sorry guys I'm not getting it.
What is this post supposed to say?

We should call a DAC a DAC?
A long explanation why we shouldn't use mining?
Or is it just a way to explain The DAC concept?
« Last Edit: March 30, 2014, 01:58:32 PM by Graffenwalder »

Offline JoeyD

Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #8 on: March 30, 2014, 02:07:15 PM »
Sorry guys I'm not getting it.
What is this post supposed to say?

We should call a DAC a DAC?
A long explanation why we shouldn't use mining?
Or is it just a way to explain The DAC concept?

No.

This thread was about the problems and confusion that occurs when we try to think about and explain the new concepts and technologies that are being developed. And that we need metaphors to get into the subject, eventhough the metaphor is not an accurate one.

One such metaphor is in fact "DAC" (something you could think of as a distributed autonomous company, but in reality is something completely different, but we do not yet have the words to describe adequately), that was chosen to ease people into a new concept/world. But at the same time there are dangers to using metaphors, because people might take them literally. For example naming your crypto-currency "fuel" for contracts, which results into having to pay environmental tax for burning fuel and needing licenses for handling hazardous substances.

Then I pointed out that the use of Star-Wars and Star-trek references might not be clear to everyone. To which Stan pointed out, that we should be open-minded and alert to all cultures (very liberal interpretation by me). To which I responded that it might not be a bad idea to map out culturally different points of view, which seems to touch on the topic of this thread.

The only thing I understood from Numericos post was +5%, so you'll have to ask him to elaborate/translate.
« Last Edit: March 30, 2014, 02:21:30 PM by JoeyD »

Offline bitcoinba

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #9 on: March 30, 2014, 02:48:03 PM »
Sorry guys I'm not getting it.
What is this post supposed to say?

We should call a DAC a DAC?
A long explanation why we shouldn't use mining?
Or is it just a way to explain The DAC concept?

 +5%

Offline unimercio

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #10 on: March 30, 2014, 03:46:39 PM »
The only thing I understood from Numericos post was +5%, so you'll have to ask him to elaborate/translate.

My apologies please disregard, I failed to allocate enough CPU cycles to my response and instead took the opportunity take a pathetic swipe at the "Empire" (bad guys) while indulging myself in Sci-Fi banter. Had I navigated the analogies and metaphors, I might have been more coherent and better served the thread.  :)

My general point (mantra) was, if we (the greater crypto community) can reach consensus, resolve conflicts and agree on common language to frame our vision we can get on with the task at hand. But, If those that understand it best, fail to agree on the most basic methods, concepts and terms, how can we hope to ever explain and rally the general public.

We in the crypto communities need standards at the meta level on par with those of the "W3C". Till then we'll drift and flounder as we jockey for position waiting for a dominate standard to run behind. I say, better we lead than follow.
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Offline JoeyD

Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #11 on: March 30, 2014, 06:56:56 PM »
@unimercio: Wow, that almost sounds like poetry.

Offline unimercio

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #12 on: March 30, 2014, 07:24:06 PM »
@unimercio: Wow, that almost sounds like poetry.
lol, kudos to the OP and you my muse  :)
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Offline unimercio

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #13 on: March 30, 2014, 07:31:34 PM »
much ouch.

I hereby banish myself from the Bitshares community.

Let nobody ever speak my infernal name again lest you be cursed with hoards of IRS tax collectors swarming upon you like locusts. I really wish I could have gotten to know you all better.

Again, I'm a day late and a dollar short.

You're not a "dollar short". I tipped you 1 PTS after your second posting  8)

yep, last I checked, that's about 6 USD long
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Offline santaclause102

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Re: Decentralized Autonomous Jedi Mind Tricks
« Reply #14 on: March 30, 2014, 07:43:56 PM »
Decentralized Autonomous Jedi Mind Tricks
Daniel Larimer & Charles Evans

In December David Johnston, one of the developers of Mastercoin and co-founder of cryptocurrency angel investor network, BitAngels, published "The Emerging Wave of Decentralized Applications" on github, in which he describes Bitcoin and next-generation systems—specifically, BitShares, Meshcoin, and Mastercoin—as 'Distributed Applications' as distinct from the original Distributed Autonomous Corporations (DAC).

Johnston argues that this new phrase is preferable because it avoids associations with regulated entities, like currency and corporate shares, and because the thing being described is a piece of open-source software that defines a protocol that can be modified only with the consensus of the community of programmers who maintain and extend the code base.

While avoiding misunderstandings caused by the literal interpretation of an analogy has merit, Johnston includes the issuance of tokens as a defining characteristic of a Distributed Application, even though software applications, per se, do not require tokens. In other words, DACs are a specific subset of Distributed Applications that involve the creation of tokens—whether one calls them 'coins', 'shares', 'chips', or whatever—and to dispense with the DAC analogy is to call a subset by the name of its superset, rather like referring to pit bulls as 'canines', because pit bulls are regulated in some jurisdictions. The choice of name does not change what a thing is, and animal control agents are unlikely to shrug and walk away satisfied if one points to a pack of pit bulls frolicking on one's front lawn and declares, "Oh those?  No, they're just canines. These aren't the pit bulls you're looking for."

A Meta-Analogy

Imagine you just discovered electricity and all of the amazing things that it can do.   There are electrons that flow around, wave forms, and other fundamental building blocks.   People want to start using this amazing electricity concept to build useful and productive circuits, but they lack a mental framework that helps them intuitively understand and predict the outcome of a particular circuit structure, and even advanced mathematics can only approximate it due to noise in the environment and imperfect measurements of the components.   Relying on math alone to simulate the expected results is time-consuming.  To design systems you need intuition and abstraction.

So, someone comes along and says, "Wow! Electricity works just like plumbing!  It flows like water. There is a 'pressure' in the circuit. Resistors are like narrow pipes..."  If you think of an electrical circuit as a kind of electrical plumbing, then you can apply everything that you intuitively know about what works in plumbing systems to help design and understand this new fancy electricity thingamajig that we just discovered, without having to resort to math until after a high-level design is in place. 

Best of all, you quickly discover that teaching students about electricity is an order of magnitude easier using this metaphor, and as a result they quickly pick up the concept and are able to apply it in useful ways.

Now imagine that the plumbing industry is highly regulated and requires licenses.  Anything that moves a fluid through a pipe, stores a fluid in a tank, or employs a pressurized system is subject to fees, regulations, and restrictions on its use. Plumbing might even be illegal in some places!

Members of the plumbing industry hear of this new metaphor for describing electricity and want to regulate electricity with the same laws the apply to water and plumbing.  They might even want anyone who works with electricity to go through the full training, apprenticeship, and guild membership process that applies to plumbers.

In order to avoid this kind of absurd situation, one must emphasize the distinction between what something is and the metaphor used to teach how it operates.  Those using electricity don't care about how it works or how it is classified. They just want the lights to come on.   For this group you simply call it 'power' and nothing else is required.   But, when you are trying to teach people how to use power to do things, you need a metaphor.   

DAC is the metaphor that holds the key to designing the kinds of Distributed Applications Johnston describes.    Bitcoin is a token-issuing Distributed Application that is most easily understood using a currency metaphor.   BitShares is a token-issuing Distributed Application most easily understood via a Bank, Corporation, or Exchange metaphor.   

If we are afraid to use metaphors due to fear of regulators, then we will harm the ability of users to understand how and why token-issuing Distributed Applications work in an intuitive level and also hinder how they are designed.   One should never underestimate the power of the Dark Side. Regulators are not as easily distracted as Imperial Stormtroopers. Renaming a DAC is neither necessary nor sufficient to avoid attracting regulators' attention.

Many people have come up with DAC ideas, but it is clear that the first principles behind creating Distributed Autonomous Applications are not yet well understood.    The DAC metaphor is the key framework that helps to design and implement token-issuing Distributed Autonomous Applications.
Seen this way, Bitcoin is the first DAC. The service that it provides that has attracted the greatest attention is payment services, and new uses are discovered with surprising subtlety and frequency.

However, when seen in terms of shares rather than coins the tokens that the Bitcoin system issues warrant closer scrutiny. In particular, note who in the Bitcoin system holds the voting power: the transaction processors, known metaphorically as 'miners', and the holders of bitcoins are passive participants. Miners control the majority of the computing power that makes up the Bitcoin system.

Seen as a company, the holders of bitcoin-the-unit own non-voting shares. The miners have all of the voting power.

As a payment protocol, this obviously is not a devastating problem. Otherwise, Bitcoin would not exist. As a company, on the other hand, this is like having the vast majority of shares in circulation stripped of their voting rights, and all of the voting power concentrated in the hands of a small number of parties who might not even hold the bitcoins—that they receive in payment for their services—longer than it takes to sell them. This situation is unusual in countries that tend to attract a lot of foreign investment, like Australia, Canada, the UK, and the USA. It is much more like the large, family-owned combines that one sees in the Developing World.

Carrying the company analogy a bit further, the goal of maximizing the 'equity-per-share' ratio replaces the goal of maintaining a constant 'backing-per-currency-unit' ratio in a currency system. With a currency, the general tendency is to strive for a stable price-per-stuff ratio. Granted, one can argue in favor of a truly deflationary currency, but this continues to be a minority view, and the default is stable prices for the vast majority of currency users. Shares, on the other hand, are expected to pay dividends, appreciate in value, or both. When we think of a DAC as a company, rather than as a mint, the idea of units that increase in value comes more naturally.

If the conversation were about Distributed Applications, none of this might stand out as noteworthy. If the conversation is about DACs, these issues stand out like a Klingon at a Star Wars convention.

Accurate. I think that is the reality of it. What it needs though is soft convincing of the current btc community (meaning soft (non arrogant) transitioning of their romantic believes to a competitive open source world where realizing of idealistic goals is possible but not simply by propagating them but by providing the tools that incentive transparency for example or empower people). There are a lot of good developers there!
The real world reason why the currency analogy is less appropriate than the company analogy is that there is competition between open source ownership networks unlike with a "traditional" (or "modern") understanding of "currency" which is thought of as issued as the only legal tender by a central authority.
« Last Edit: March 30, 2014, 07:48:57 PM by delulo »

 

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