What Are Permissioned Ledgers?
It seems the newest buzzword in the crypto-space is quite a strange departure from the history of a movement which has thus far been focused on innovation ...
Tell me when to go. What's up party people?! Chris DeRose here, community director of the Counterparty Foundation. I'm shooting this video in Le Boy in Ft. Lauderdale. It's a strip club, a gay strip club here in town. It's very popular although we are here before anyone gets here.
And I wanna do a nice video talking about permissioned ledgers. We're going with the pride theme this week and I think that it's a good time to talk about permissioned ledgers. So, this permission ledgers thing was a really weird invention. I'm pretty sure Tim Swanson came up with it, and it struck me completely out of left field. So every once in a while you see something on Bitcoin and you're like, "Is that a joke or is that a real thing?" Well, permission ledgers is a real thing. So permission ledgers, I guess the thinking behind permission ledgers was that it would take the good parts of Bitcoin and not need the Bitcoin and replace it with trust.
Well, anybody who's been following my channel who knows Bitcoin at all knows that the only thing that is good about Bitcoin is that it doesn't require trust. It's slow, it's honky, it's crazy to work with, it's got crazy bugs. But it does this one amazing thing that has never been done in the history of computer science and that is equivocate truth when everybody in the system has an incentive to lie. So when permission ledgers came out, I thought it was like a joke because it's like saying you can take the best part of cars and then you ruin [SP] the engine or something like that, I don't know. So permission ledgers is roughly that, the idea behind the permission ledger, I don't want to call it a movement but certainly the evangelism, is that you can have value in the system by sharing a ledger amongst multiple computers. So let's explore that because this technology has been around for quite some time and, in fact, you'd be very hard-pressed to find a ledger that isn't shared in some capacity already.
You have shared ledgers in place at many banks, at many dot-coms, just about any environment that I can think of that has internet presence or even just a quasi-distributed presence. You find it at companies with their backup servers or something like that. I think that the role of permissioned ledgers, as it's being equivocated by its proponents, is that you would share these ledgers in offices of your competitors. Which is a very strange thing, I don't know if the pretense is that a permissioned ledger requires that you don't have competitors or that your competitors are benevolent. But seemingly that hasn't been thought through too much, I don't know. And part of the solution being advocated by this crowd is that, let's take the case of a bank, Wells Fargo would have part of it's ledgers kept on the Chase system.
So it's a weird thing to think about because I guess at some level there is some degree of transparency in these operations but to suggest that you would have full transparency amongst all banks doesn't seem like something that anybody would want. It would seem like you would want to absolutely have as minimal amount of information that is needed to process transactions with these parties. Certainly we have a permissioned ledger in the sense that it is held in custody by such entities as the Federal Reserve, the ACH, the Automatic Clearing House System, and in these centralized or quasi centralized distributed ledgers we have these services that are performing what needs there are with a minimal amount of information sharing. One of the criticisms against Bitcoin by the permissioned ledgers people is why should we have to trust the miners? Now you don't have to trust the miners, of course, we know that. But part of that that is weird because if you don't trust the miners why would you trust your competitors more? And we can't even expect Wells Fargo to clear and settle my own account, it's customer's account in a way that doesn't incur greater spending. Why would I trust, as Wells Fargo, Chase to perform my settlement in a way that is conducive towards my goals? It just doesn't really add up.
I think it's a solution in search of a problem. I think everybody who has discovered Bitcoin and doesn't want to like Bitcoin, which I totally get, that might be another video. But they are instead trying to find way to not look stupid or they're at least trying to find a way to become a more moderate stance in the community by advocating something that is sort of the comprehension of Bitcoin that they have along with some abstract values such as not needing the Bitcoin coin because, I don't know, anarchists, or Silk Road, or who the hell knows what. It's a stupid idea. I don't think it's going to go very far. I certainly enjoy watching people work with the systems that they are advocating, what they typically end up doing as part of their advocacy is discovering that Satoshi Nakamoto didn't invent the block chain, that instead the block chain has been present since, I don't know, the 70s or something.
Which of course begs the question why are we here and why wasn't the word block chain used until the Satoshi paper came out? But, again, I don't think that they really thought things through. But hey! Maybe one of you guys who are watching my video, I'm sure you're going to at some point, why don't you write a comment. I'd love to hear from you guys. Let's take it online, lets hash things out, let's discover truth. That's what Bitcoin is all about. And if you like this video, subscribe to the channel.
If you have any questions, you ask me, DeRosetech on Twitter. Party people, I'm out!