July 2022
New Locations
Bi-directional BTM just opened in Brunswick Maine inside Omnic Data at the train station.
Location coming soon to Houlton Maine.
We have more than a dozen BTMs lined up and ready to install. Help us find new locations and earn a little BTC in the process!
Trust Machine
From: Magic Internet Money
By Jesse Berger
Consensus: The Return of Integrity
“Bitcoin is a game where everyone watches everyone else to make sure nobody cheats.” -Jameson Lopp, CTO of Casa
To maintain the trustworthiness of the network’s incentive mechanism, and to mitigate counterfeiting or hacking, Bitcoin insists on its own brand of collaboration, which is commonly known as “consensus.” Bitcoin’s consensus mechanism solves a computing problem known as the Byzantine Generals Problem, which stems from a lack of trust.
In short, the problem states: multiple parties must agree on a single strategy in order to avoid failure, but the communication channels needed for coordination are susceptible to corruption. How do the parties reliably synchronize their efforts?
Bitcoin forges consensus through “proof-of-work”, which is a technique in cryptography that makes valid transactions costly to create and difficult to falsify, yet easy to verify. Like a mathematical equation, it takes effort to decipher without knowing the solution, but once given, the whole formula can be easily understood. For the Byzantine Generals Problem, this means that all parties can reliably coordinate their efforts with one another because authentic communications can be positively validated, with any corrupt messages easily detected and omitted. This breakthrough led The Economist magazine to dub Bitcoin’s consensus solution as “the trust machine.”
Thinking in terms of game theory, consensus renders cheating an ineffective strategy because it ensures that adversaries can only benefit if they abide by the rules. In this way, the integrity of Bitcoin is elevated to practically guarantee honor, even among thieves.
Consider, if you will, a metaphor: trust is the glue that binds humans together in collective endeavor. Cooperation demands a basic understanding on the part of each party as to what the other parties can be expected to do and not to do. Even something as mundane as walking down a crowded street implies a certain level of trust that the strangers surrounding you will not do you harm. It's easy to take trust for granted, but if you were to somehow wipe the collective human memory and begin anew without any basis in trust, it would immediately become apparent how much our interconnected lives depend on trust.
In many ways, we are able to take trust for granted reaping, as we do, the benefits of millennia of human cultural evolution. We have codified trust into things like taboos, morality, and common law. Perhaps one of the most important abstractions of trust that humans have devised is money, which enables the most complex cooperative schemes of which we are capable. Effective as these trust proxies have been, their integrity across time is not guarantied. Evidence of a disintegrating implied trust is not hard to come by nowadays. You see it in civic institutions divorced from and sometimes at odds with the welfare of the populaces that they were designed to serve and support. Tune into the daily political news cycle, and integrity is the last thing you can expect to encounter. And from an economic standpoint, the central bankers are now trying their darnedest to bring on a recession in order to curb the excesses that they created by inflating the money supply.
For any system or tool that abstracts trust in facilitation of human cooperation, the existence of an incentive to betray the implicit trust will eventually be acted upon by someone. Like the tiniest crack in a foundation that permits the entry of an element it was meant to guard against, the wrong incentives will eventually compromise the integrity of the system. Once the first person chooses to exploit the system in the least of ways, the trust begins to disintegrate. Over time, others notice that shortcuts exist to their benefit and will choose to take them. Eventually, the system or institution diverges entirely from the purpose and trust for which it was created. The value it was capable of bringing to bear becomes a magnet for pilfery. The glue becomes brittle, and the pieces fall apart.
The promise of bitcoin as a "trust machine" lies in its lack of an incentive to cheat. It is a fully transparent ledger, continually updated by a process that lacks shortcuts and can't be faked. Someone - or rather, some powerful computer using considerable energy - must do the work in order for a new consensus to be forged every ten minutes, roughly. How fortunate we are that such a tool has been devised at the precise moment when its predecessors seem to be in their terminal state of corrosion! Necessity being the mother of invention, maybe it is not mere coincidence that someone managed to solve the Byzantine Generals Problem.