diff --git a/Blockchain.md b/Blockchain.md index 74b61a0..82f598c 100644 --- a/Blockchain.md +++ b/Blockchain.md @@ -3,9 +3,9 @@ - [A blockchain is a decentralized database](https://www.youtube.com/watch?v=bBC-nXj3Ng4). - A blockchain is a worse [[Databases|database]]. It is slower, requires way more storage and compute, doesn't have customer support, etc. [But has one dimension along which it is radically different. No single entity or small group of entities controls it](https://continuations.com/web3crypto-why-bother). - Blockchains solve the Byzantine Generals Problem: [How do participants in a decentralized network communicate and coordinate with each other towards some action without relying on a trusted third-party?](https://a16zcrypto.com/posts/article/crypto-glossary/). - - Blockchains are "trustless". There are mechanisms in place by which all parties in the [[Systems|system]] can reach a consensus on what the canonical truth is. + - Blockchains are often called "trustless", but they reduce rather than eliminate trust: their consensus mechanisms let participants agree on canonical state, not objective truth. - Power and trust are distributed (or shared) among the network's stakeholders (e.g. developers, miners, and consumers), rather than concentrated in a single individual or entity (e.g. banks, governments, and financial institutions). - - Blockchains put the code in charge. + - Blockchains make agreed state and deterministic execution publicly verifiable and difficult to alter. Smart-contract bugs, protocol upgrades, client implementations, and oracle inputs still require human [[Governance|governance]] and institutions. - Blockchains allow permissionless innovation. - Blockchains are useful when these conditions are met: - The resource is scarce (limited). @@ -21,6 +21,7 @@ - Blockchains can be a censorship-resistant payment rail for people under coercive regimes. - Blockchains solve distribution problems but they don't solve the problem of who will add the money to the ecosystem. That's a political one. Unless there are good incentives to move to blockchains. - Once a system moves to a blockchain, it'll get its properties (e.g: transparency and verifiability). + - A blockchain can verify that an on-chain record has not changed, but not that its original off-chain claim was true. [Tokenized natural assets still require measurement systems, trusted oracles, governance, and safeguards against double counting](https://www.usv.com/writing/2021/04/tokenized-natural-assets/). - Open source has the failure mode of not enough incentives, cryptocurrency has the failure mode of excessive and overly concentrated incentives. - Blockchain incentives have large real-world undesired second-order consequences. E.g: Bitcoin incentivizes miners to use a lot of energy. - [Markets are useful when prices measure an underlying reality](https://www.stephendiehl.com/posts/bad_place_2026/). diff --git a/Decentralized Autonomous Organizations.md b/Decentralized Autonomous Organizations.md index 9b3a460..ca95df3 100644 --- a/Decentralized Autonomous Organizations.md +++ b/Decentralized Autonomous Organizations.md @@ -1,7 +1,8 @@ # Decentralized Autonomous Organizations - A Decentralized Autonomous [[Organizations|Organization]] is a mechanism that enables online communities to form and coordinate economically. -- DAOs make it possible for an online group with members from anywhere in the world to pool capital and hard-code rules — entirely in software — for how that capital will be managed and deployed. Those rules are then enforced by the underlying [[Blockchain|blockchain]]. +- They let an online group pool capital and use [[Blockchain|smart contracts]] to automate parts of its voting, permissions, and treasury operations. +- Smart contracts do not replace the whole organization. [DAOs still depend on human governance](https://en.wikipedia.org/wiki/Decentralized_autonomous_organization) and face low participation, concentrated token voting, difficult-to-repair code, and legal ambiguity. ## Resources diff --git a/NFTs.md b/NFTs.md index 0675a12..0202494 100644 --- a/NFTs.md +++ b/NFTs.md @@ -3,6 +3,7 @@ Unique assets whose value is independent of one another. For example, an NFT might represent a piece of unique digital artwork. - Today, if you create something digital, ownership is tied in with distribution. If someone makes an `mp3` or a `jpeg` piece of art and posts it or sells it online, you'll have to have it to consume it (DRM can sometimes change this). -- With NFTs, the digital asset you create has a clear, provable owner (you!) and anyone you sell it to (and anyone thereafter) can trace it back to you, the creator, and know it is authentic. -- When you create this NFT thing, you can create rules around it via a [[Blockchain|smart contract]]. One of these rules could be that anytime this piece of art you made is transferred across owners, you get 5% of what the new person paid for it, in perpetuity, automatically. +- An NFT records control of a blockchain token. It does not by itself prove that the minter created or owned the linked work, transfer its copyright, or confer other legal rights. +- NFT metadata often points to media stored off-chain. [[IPFS]] content addressing can verify that content matches its address, but it does not guarantee permanence. +- A [[Blockchain|smart contract]] can encode transfer or royalty behavior, but royalty payment is not inherent to an NFT and may depend on the marketplace or transfer mechanism enforcing it. - There are [many problems with NFTs](https://youtu.be/YQ_xWvX1n9g)!