Blockchain – A New World

I think I am beginning to get it — and it’s blowing my mind.

I bought some Bitcoin a while ago without really understanding it. Now I’m studying WOZX — and I have bought some – and through Steve Wozniak’s new venture efforce.io, I can begin to see how the world is about to undergo dramatic changes.

First, the difference between Bitcoin and Blockchain. If bitcoin is like a check (from a checkbook) then blockchain is the check register — except that this check register can’t be modified, erased, or replaced. The transaction I made, buying bitcoin several years ago, is still recorded on the blockchain. It’s the use of the blockchain that’s going to change everything.

In Wozniak’s model, companies earn WOZX coins by generating energy savings through smart contracts. I don’t fully understand smart contracts yet – they appear to be automatically triggered transactions.  

There are two ways to acquire WOZX; earn them or buy them.  (For contrast, there are also two ways to acquire gold, dig it up or buy it.)

Right now, the WOZX coin costs about $3. This appears to be going up as people learn about, and get excited about the idea.

Right now, if a company generates energy savings they earn (for example) 100 WOZX ($3 ea) coins worth $300. As traders who support this idea and trust Steve Wozinak bid up the value to $10, energy saving companies now get $1000 for their efforts.  

Energy saving becomes more valuable because people support the idea.  

In the current model, if people like the idea of energy savings, they need to elect governments that like energy savings, who then create tax incentives for companies to create energy saving devices. Alternately, people can find startups and invest in them by buying stocks — or perhaps invest in managed energy saving funds from the big banks.   Rather than trusting big banks, governments, or Wall Street, people can now buy ALTCOINS like WOZX which will go up in value as people support, and invest in energy savings.  

WOZX uses the Etherium Blockchain, so it is secure and tested.

Tim Berners-Lee said about his invention, “The internet is paper.”

The blockchain is paper as well, but it’s a special paper that, once written on, cannot be modified or erased. It’s secure paper.

Blockchain is a secure communications platform… secure because it’s distributed.  

ALTCOINS are like websites. Many are scams.  In the early days of the Internet, in one of my presentations I said: “There was a time when, if your business had a website people assumed you were a scam. Now, if you don’t have a website people assume you’re not a real business.”  

Similarly, many (most?) Altcoins are get-rich-quick schemes. Some, though, appear to be backed by trusted entities with viable business models. WOZX seems like one of these.  

WOZX can currently only be bought here: BithumbPro. The process is not painless, but it’s worth it — they have a live chat which is surprisingly helpful.

14 comments:

  1. Mark,
    I own Bitcoin through two stocks we can buy: GBTC and MSTR. Easier than getting a wallet.

    Secondly, I like Woz’s idea big time. The question I think Suzi asked is the one I need to know the answer to: How can we keep people honest when they say they have done something to save energy? I think you are working on that one. What does Wozniak say?

    1. Many people recommend owning GLD stock instead of buying actual gold. As I looked deeper into it, many of these ETF-like stocks are highly leveraged, which means that a run on the stock will collapse it. I like the idea of buying physical gold and actual bitcoin. If things do “go south” which is, ostensibly the reason we’re buying them, then let’s not limit ourselves by counting on the very systems we think may fail.
      As far as the “keep people honest” comment — this is part of what needs to be designed into the system. The system may involve human approval, smart contracts, or written documentation. If the ‘system’ is created well, then only honest energy efficiency moves will be rewarded.

      Is Steve Wozniak (and his team) capable, qualified, and experienced in building effective systems?
      I placed my bets that he is and bought some WOZcoin.

  2. Mark,

    I remain firm in my belief that one should not try to create this distinction between bitcoin and _the_ blockchain. Yes, anyone can create a distributed ledger and can make some sort of I-can’t-believe-it’s-not-bitcoin clone. However, I am unconvinced that these altcoins pack the same security promise as the bitcoin blockchain. The hash of the last bitcoin block was 0000000000000000000526fa85a297eb923c5e64326f0a35d7c49301889aeb52

    …that’s an expected 2 ^ 76 hashes to mine the last block. This means that the miners are paying *a lot* in electrical power to obtain the block reward. This is not wasted power, it is being used to secure the internets financial network. No altcoin can make this guarantee, the owners/creators essentially write themselves free options. (Of course, you can make the same argument for bitcoins – the first miners essentially got free btc. But the fact that someone unjustly starts with the money at some point is as far as I can see unavoidable – and bitcoin’s distribution system in this case is the lesser of various evils.)

    You write:

    WOZX uses the Etherium Blockchain, so it is secure and tested.

    Ethereum is not known for being a secure platform. It has been hacked in the past, causing Vitalik Buterin to issue a hard fork. (Look up the 2017 DAO hack.) This response to the hack showed that it is not the code that is law (if the code were the law the “hacker” would be the rightful owner of the coins) but rather Vitalik Buterin. So when using Ethereum you are essentially trading the authority of the FED for the authority of the Ethereum community / Vitalik Buterin.

    I think in these unstable financial times it is essential that we unite behind one coin – specifically bitcoin – and do not get distracted and pulled into each and every direction by the altcoin scammers. Money is different than social networks / websites because if you are partially invested in one you are necessarily giving up your investment in another. I believe people should diversify their assets, but diversifying across the “cryptocurrency space” is not real diversification – it is spreading yourself thin.

    If you want to invest in clean energy then invest in bitcoin and wait for the price to stabilize at $100,000 or so and then use the proceeds to fund a company making smart energy choices. This will do far more for creating a world with clean energy than investing in an obscure Ethereum altcoin.

    Yours,
    Will

    1. My limited understanding of that incident – the mid-2016 DAO hack and the following Ethereum-Ethereum Classic split is that due to a classic ‘don’t-pay-before-you-debit type’ programming (logical) flaw in the smart contract developed and deployed by DAO, a third party, on the Ethereum chain, the hacker was able to run a recursive loop without the balance getting updated, leading to ~$50million being drained off the DAO smart contract. It wasn’t Ethereum which got compromised.

      1. R Sharan,

        I do not know the details of how Ethereum works. However, from my perspective, it seems that although this DAO hack may have been targeted to a 3rd party add-on to Ethereum – the entire Ethereum network was affected by the subsequent hard fork. And also IMO the wrong fork won – the DAO “hacker” should have been awarded his rightful eth – he followed the law-of-the-code.

        Of course, that’s just an opinion and others may think that the Vitalik Buterin chain is the rightful chain. However if the devs can hard fork any time they think some movement of ethereum is “unjust” then you have finance run by committee vs. finance run by an algorithm.

        Best,
        Will

        1. The Completely over-simplified version

          For those of you who don’t follow this, it’s an interesting story. As I understand it (correct me if I miss something) —
          There was a flaw in a smart contract’s logic that allowed someone to get paid multiple times on one activity. A hacker used this flaw and took $50m.
          Arguments ensued because on the one hand, the hacker took $50m that he should not have gotten. On the other hand, the hacker did not do anything wrong — he exploited a loophole in the contract’s logic.
          In any case, the Ethereum committee decided to make a copy of the Ethereum blockchain from before the hack, called a “Soft Fork.”
          The Ethereum Blockchain that had the ‘hacked’ smart contract was renamed “Ethereum Classic” and the copy is the Ethereum (Vitalik Buterin).

          Will, along with many others feel that this was wrong. The so-called hacker did nothing wrong and was entitled to his 50m because the smart contract had a flaw. The sanctity of Ethereum was invaded by creating a fork where the hack did not happen.

          The point, though, is that the blockchain was not hacked and is completely secure. People who create the smart contracts need to be more careful.

          The full story is here:
          https://www.coindesk.com/understanding-dao-hack-journalists

        2. Will,
          I share your opinion about the decision taken to hard fork.
          You said: ‘IMO the wrong fork won’
          :)
          I think ETH won or grew much more (ETH ~$600 whereas ETC ~ $6.5) because they continued to build Ethereum much faster and more than ETC did. The developer-network-effect. You have a valid point that technical leaders of the chain can have an overbearing effect on such decisions, as was evident here.
          Nothing is perfect. But it’s still a far better option than permission based centralised systems.

          Additional context: Even Bitcoin has had 3 hard forks. Bitcoin Cash ( ~ $300), Bitcoin SV( ~ $175) and Bitcoin Gold( ~ $10) are the result of that. Not to mention the unintended forks/splits like the March 2013 one related to BerkelyDB/LevelDB and the CVE-2018-17144 related double spending vulnerability in Bitcoin.

          For me personally, the difference lies in the capability to literally ‘program money’ on chains like Ethereum. To be able to use that to build a trustless and permissionless financial system is fascinating, a capability missing in BTC.

          1. @Mark

            Yes this is an accurate summary of my position.

            @R Sharan

            Yes bitcoin had 3 hard forks, however in terms of the market price the “winner” was always the original bitcoin protocol (i.e. Bitcoin’s version of Ethereum classic.) The only exceptions are those earlier problems, BerkleyDB and the double-spending vulnerability, that you mention. Admittedly, you can make the argument that hard forking to fix those “bugs” is just as wrong as hard forking to fix the DAO hack with Ethereum. These hard forks are certainly a permanent stain on bitcoin’s reputation and legitimacy.

            > For me personally, the difference lies in the capability to literally ‘program money’ on chains like Ethereum. To be able to use that to build a trustless and permissionless financial system is fascinating, a capability missing in BTC.

            I don’t think that this feature is as useful as people make it out to be. There’s nothing preventing one from writing some pseudocode “if X event happens, send Y bitcoins to address A, unless Z or N happens, then send Y/2 bitcoins to address B and Y/2 bitcoins to address C” or something like that. That is to say, you can add an off-blockchain layer of code that makes arbitrarily complex contracts with bitcoin.

            The difference, as I understand, is that in Ethereum you can publish contracts like these into the blockchain so that they are irreversible, whereas if they are used in Bitcoins case the person w/ the private keys can always just turn off the code running on their server that executes the smart contract. In other words, bitcoin smart contracts require this trust whereas Ethereum contracts do not.

            However, I do not see an advantage for Ethereum’s ‘trustlessness.’ Creating a completely trustless smart contract is perhaps an interesting academic project, but smart contracts neglect the nature of practical business, where personal relationships and trust are absolutely required. If you are paying for a good with a cryptocurrency, you need to trust the person is going to actually send you that good. No line of code can make that guarantee. When people make business contracts, they trust that the other person is going to follow through not because they can litigate otherwise, but because the contract is constructed to be beneficial to both parties. Also, contracts are written in human language, they are supposed to lay out what should happen in various cases, and they are always a bit open to interpretation so that you don’t get this ‘well if you read it completely literally then I can do this and get 50 million ETH.’ In other words, the ETH hard fork well illustrates why contracts can’t be so rigid.

            Best,
            Will

  3. So those who invest in WOZX are crowdfunding a reward system for energy saving companys/endeavors?

    Who vets the companies that earn WOZX? Is that part of the smart contract?

    The idea of smart contracts is fascinating and a bit scary! It’s like how algorithms replaced mortgage underwriting.

    1. Crowdfunding: Not quite. I’ve described “value” in my post “What is a Coin’s value?
      Using the WOZcoin, people are bestowing value on energy efficiency the same way people bestow value on green paper, gold coins, or cowrie shells.
      Because people believe that energy efficiency has value, they will bid up the value of the WOZcoin. As the WOZcoin increases in value, energy efficiency plays become worth more.
      As far as your second question, I don’t know. That’s my next deep dive.

  4. So we’re talking about several things here, as I understand it. Clean energy and rewards for that for new technologies and businesses, and investing in these businesses with alternative currency. Right?
    Why do you trust apple and Steve Wozniak?
    Aren’t they pretty famous for developing new versions and updates for every thing so you have to constantly upgrade? Is that unethical or just a smart way to stay in business?

    1. As I see it, it’s no so much about Woz, it’s about the system he has set up. It is like he has created a website — a machine — that will pay businesses to be more energy efficient. If it works the way I envision it, Woz need have nothing to do with it.
      Like the Apple Computer — Woz designed and built it, put it out there, and the world changed (obvious over-simplification.)
      If the efforce system works, then the people who create energy efficiency will make money – similar to the way a gold miner makes money.
      I’m still learning this and figuring it out — hoping to get some conversations going here so that I can understand this better. I also plan to keep writing as I learn more.

  5. When I first read the CNBC article it didn’t make a whole lot of sense.

    Reading your article was much clearer.

    The idea, while still conceptual in my mind, seems promising.

    Essentially people are directly voting with their dollars into companies that are actually saving energy.

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