Login
Statement One: Electronic Money Without Third Parties
I was reading a line today that stopped me cold: “Money does not ask permission.” I decided to write a statement that helps to explain this idea. While exploring the concepts of Bitcoin and blockchain, and studying how prominent voices write about them, I came up with this:
We learn now that money does not ask permission. What has been made so far is a practice of one century, whereby payments are rationed by institutions that allow, record, and sometimes decide to erase our transactions. Their ledgers are black boxes; their terms change without our consent. Our design is to have Statement One: Electronic Money Without Third Parties
Order, not dictation, is earned. Competing producers gather signed transactions and slot them into a public sequence by solving a costly puzzle. The puzzle is not a vote; it is a receipt of energy burned in the open.
The payment is enforced without getting credit; rather, you fulfill a script: present the required information, reveal the required secret, wait upon your peers to validate your work. Otherwise, if you fail, the coin remains in place. But if you pass a certain scripted test, which no one can lock, reclaim with impunity.
settlement only through mathematics, not an appointment — an instance of value that moves when a signature satisfies a rule but lies dormant when a gatekeeper nods.
It might not promise as broad usage as the market might demand, but it ends in a stronger system that, although not doing an excellent job of stability and good standing for value, consequently, does not mediate.
The heaviest, most expensive history wins by definition, and every node can verify that weight with little effort. Time becomes shared, quantifiable, and unforgiving of revision. To undo a payment, an attacker would incur the cost of rebuilding time greater than all the world has already accepted.
The motivators are substitutes for orders. New coins come into circulation as per a fixed schedule, not per fiat from on high. Transaction fees will go to transaction processors, the people who order and archive every transaction. Honest behavior is very cheap, duly rewarded; to behave dishonestly is costly and, under most cases, quite impractical. Censorship will rather act as a tax on censors with excluded transactions seeping into the wallets of competitors. Where administrators might once have power to deny, participants now retain the power to defect. Single-use addresses, timelocks, multi-signatures: Such mechanisms reveal off-the-record transactions while retaining a degree of transparency that can be audited, verified by supply. Full anonymity is not guaranteed, but channels of improvement can be laid with the tools of mixing and zero knowledge above.
The first step is the most required: completely separate identity from control so that trade, speech, and juicy association can happen without asking any official permission.
The system honors whatever it commits to offer: a pathway for all-entry levelling, the scrutinising ability of the public, predictable issuance, and the finality that becomes stronger the more economic sense is attached to it. For significant settlements, prudence would entail being patient. For relatively smaller ones, speed is a potential risk to weigh against. Regulations are clear; all are free to decide on the trade-offs.
Privacy is a right conferred by good design and not born of policy leniency. No receipt shall list the name.
There is a price. Tying facts to physics burns energy and requires hardware. Not merely waste per se, but also a sort of provable treaty in energy, one that has to be somewhere up or down the authentic scale of expenditures — the very resource value that bronco thieves will have to climb. In other words, the bigger, decentralized, and more tightly bonded the mass of effort, the safer it gets to bark away security from cheap relays and state-friendly jurisdictions. We will quantify these externalities in the open and drive the system toward efficiency without giving away anyone’s privilege to rewrite history.
Persons may be eliminated by keys. Therefore a key pair is enough by itself to own and spend. Coins are not some balance on someone’s server, but rather unspent claims tied to conditions that anyone can verify.
From cash sans third-party flows not towards utopia but exit. Builders get out there and put together a service without asking for access to any other ledger. Saviors can hold without confessing. Markets can bid “To Count” does not mean another’s accountlessness. Leading transactions are those which are kept simple enough for checking and so difficult they cannot be gullied. Once-finality is paid for and retained.
Hence evolved by a scattered and intermittent process; and now require so many connected decisions to be made in full of anteriority. The adoption of it all will follow a sequence of escalating steps at every turn and will be diffuse toward a few firm points deep in the future, united in refusal to even entertain whispers of large-scale, top-down legitimization.
From the perspective of exchange: It will be willed by a willing subset of the population dwelling upon it. Publish open problems — your blank checks — with everybody else in the race to compete. Settlements will not be delivered to our doorsteps; instead, the system will stay waiting until honored by actual implementation.
Back from chokepoints that used to channel economic life into a queue of permissions. Law still abides, rightfully reckoning with substrates where fishing out property is costly and where a mask of surveillanceis voluntary. Power will shift, as will we.
Eschew the essence of commitment in favor of enduring protocols. Hold onto your own keys rather than begging some faraway exchange to honor this deposit. Make sure your code is up for everyone to see.
Strangers also be allowed to contract business independently from signing permits. We shall build the whole concept, apply it, and alter it until normal transactions cease to require the approval of some profiting intermediary.
If this idea speaks to you, stay close.
We’re only at the beginning of a much longer conversation about what it truly means to own something in the digital age.
Statement One: Electronic Money Without Third Parties was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
