Notes On Bitcoin
The following is a set of notes made while reading the Bitcoin Whitepaper. My goal was to summarize the paper at a higher level of abstraction in order to make Bitcoin more accessible for philosophical discussions.
Coins
Coins are the various solutions to the same difficult, and thermodynamically costly, problem. The parameters of the problem can be modified to increase or decrease its difficulty. The difficulty is amplified over time to keep pace with gains from Moore’s law. In this way proof-of-work solutions serve the same purpose as collectibles in Nick Szabo’s origins of money article 1
SIDENOTE: The problem mentioned above is specifically that of starting from zero and incrementing by 1 each time, finding an integer value that - when hashed along with the blocks transactions and the hash from the previous block - produces a value that begins with a required number of zero bits. The required number of zero bits is increased to amplify difficulty.
Once a coin is mined it becomes, quite literally, its history of ownership. It is an ordered chain stretching from the genesis of the coin in a miner (or pool of miners) to its current owner. Each change of ownership is recorded as part of the coin itself.
Temporality And The Blockchain
In theory, the exact calendar dates and clock times of transactions in bitcoin are ultimately irrelevant to its proper functioning. Though in practice part of the validation of a black, as explained by Vitalik Buterin in the Ethereum White Paper, is ensuring the block has a sensible timestamp neither less than the previous block nor too far in the future. The temporality, as mentioned by Nick Land in the 1st lecture, is a constructed tensed or A-series temporality defined by the blockchain.
The past is constructed as a series of blocks. Each block freezes all the transactions that a given mining node observed before attempting to freeze the block. A mining node is entitled to freeze and share a block when it has found a solution to the thermodynamically costly problem discussed above.
There are orphaned blocks and block chain forks that can occur and further complicate this process. There can be either temporary or permanent competing temporal records, but the longest fork to date was resolved back into a single blockchain in a mere 4 blocks 2. The ontological status of these abandoned temporal records may or may not be interesting to investigate.
Ultimately, the temporality constructed by bitcoin is not the temporality of an added spatial dimension. There is only one spatial dimension to be denoted by block number. This growing block-universe 3 is an ever expanding transactional history.
To reduce the burden of this accumulated past Merkle trees are used to save a “summary” (hash) of what was previously seen, allowing the rest to be safely discarded or only accessed in depth as needed.
Relationship Between Coins And Blocks
The first transaction in a block is reserved for any new bitcoins to be awarded for solving and creating that block. Thus, bitcoins come into circulation and are assigned to the miner whose proof-of-work of the latest block is accepted into the blockchain first. This relationship between coins and blocks allows the currency to be bootstrapped into existence - the first coins are mined along with the first blocks
Overpower The Network
It’s almost hilariously impractical and non-sensical to do such a thing. You gain little to no economic power, the only real gain is the ability to deny service to others and potentially shut the whole network down 4.
Addendum
To summarize Nick Land’s description:
Bitcoin can be viewed, in many ways, as the enactment of transcendental philosophical critique instantiated within software. Trusted third parties take the place of the transcendental entity that is to be subtracted from the monetary process via the critque. Buried beneath the technical details of the paper is an entire framework for staging a critique of these institutions. Much of this framework is implicit within in the assumptions taken for granted. Through this lense Bitcoin is a philosophically interesting entity worthy of further investigation and consideration. Especially as it relates to capitalism, modernity, and the (neo-)liberal project.