Hashgraph is a huge innovation that is going to take the revolution started by Bitcoin, with its blockchain technology, to a whole new level. Its developer, Leemon Baird, is to be congratulated for bringing it to the world, and he deserves a big fat reward for it. However, he has been criticised for patenting it. Patents are supposed to be about allowing the inventor to develop and then release an invention without other people later coming along and copying it without having to pay the developmentcosts. It works brilliantly if you are a large drugcompany because proving that a new chemical is effective as a medicine is hugely expensive and copying a drug already on the market is comparatively trivial. The trouble is that software patents are a disaster.
I can feel for Leemon and his choice to patent his ideas. I have over 20 inventions I am working to get out into the world, but it has been a struggle because the present patent legislation is a mess. Five of my ideas from about 20 years ago are already patented, but so far none has realised its full potential. What I want to do in this post is to use my experience to explore some options we have with Hashgraph.
To the best of my knowledge only the USA allows software patents so Leemon and his company, Swirlds, can only patent his ideas there. That means the rest of the world can do what they like with the information that he has released in the patents, and put on the internet. My understanding is that the really clever part of Hashgraph is the virtual voting system, and that is not in the public domain yet. Whether that is true or not, there are likely to be several ways to achieve the same goal of high efficiency. The important point is that other programmers will already be working on their own code. Having learned that something has been achieved by someone else makes it so much easier for others to also achieve it. Outside the USA everyone is free to do what they like with the Hashgraph code they develop. It creates the danger of the USA being left behind. As brilliant as Leemon may be he cannot outpace a thousand programmers working on open sourcecode.
Another thing few people understand about patents is that they have little power to stop anyone anywhere copying them. All a patent does is give the patent holder permission to sue an entity that copies the ideas without their permission. Prosecuting a patent in court is hugely expensive so it is exclusively a game for the big boys. These big fights get into the newspapers so everyone knows about them. What the papers leave unsaid is that individuals and small companies are almost helpless in this arena. At the moment Swirlds is a Small company.
I would really love to see Hashgraph thrive and for it to form the foundation for new coins that overcome all the limitations of Bitcoin and other crypocurrencies. That is not to say that we should try to make Bitcoin obsolete because that would badly damage the reputation of the wholecryptocurrencyindustry. We need to find a way to fork the old cryptocoins off their blockchains and onto hashgraphs.
There were 2 things that stopped me investing in Bitcoin when I first heard about it. One was the hugenumber of coins that Satoshi kept for himself. The second was the hugeenergy needed to run the mining computers. As the price of Bitcoin rises it becomes profitable to throw more energy at the miningprocess. Recently the price has risen so fast the limiting factor has become the supply of new computer hardware to do the mining. If the present trend continues much longer we could end up with a double figure percentage of the world’s electricity being used just for miningcryptocurrencies based on blockchains. My assessment is that would be an ecological disaster. Hashgraph is thousands of times more efficient in that respect than a blockchain. It is claimed it can get greater security, but at atleast 36000 times the speed of Bitcoin. The Lightning network is promising to increase blockchain speed, but it compromises security to do so. Hashgraph is not limited like that, and Leemon claims to have mathematically proven that it achieves optimum security (The maths shows nothing can be perfectly secure).
So Hashgraph could enable us to build a coin that has optimum security, and enough speed and efficiency to provide a fantastic currencysystem for everyone in the wholeworld to use. How should we go about building that near perfect coin?
Value has to be fixed on something that is limited.
As touched on above, the Bitcoinminingcode chosen by Satoshi is open to criticism. The fact that only 21million Bitcoins can ever be mined is an important factor giving it value and determining its price, but is it the perfect system? The price of gold is determined in a very similar way. If the goldprice goes up prospectors get out into the worldlooking for new deposits, and miners get busy digging it up from new or abandoned mines. If the price goes down the mines that were struggling to break even close down. There is a continuously changing balance between the price and the effort put into mining. The difference is that the 21million Bitcoinlimit is somewhat artificial. Bitcoin has already forked several times. Others have created hundreds of new coins running on different blockchains, and more recently on new innovations designed to overcome the limitations of blockchain. (eg. IOTA).
The computing work needed to mine Bitcoin is an important part of its security. To be secure Bitcoin owners need to be confident that no single organisation will ever be able to afford enough computing power to do a 51% attack. If Bitcoin were to ever loose its dominance in the market its securitylevel would decrease. Hashgraph overcomes these limitations, but in the process we are left with a dilemma; on what do we pin the value of a coin built upon it? We need something that is strictly limited. One idea is food because food is absolutely critical to our survival. I will discuss this in more detail in a futurepost. The idea I will discuss here is using carbon dioxide in the atmosphere.
A carbon sequestration coin.
There is an urgent need to remove carbon dioxide from the atmosphere and international agreements to create incentives to do this have been very difficult to achieve. Maybe a new coin that needs something to pin its value upon could also provide an incentive for this much needed carbon sequestration process. We know roughly how much carbon we need to sequester, so that could be used to create the limit on the number of coins.
There are many ways coin supply could be linked to carbon in the atmosphere, so the challenge is to find the best one. From my perspective something that raised funds for the development of new carbon sequestration technologies would be magic. I have been doing work with Cambridge Carbon Capture Limited and we have a technology to take carbon dioxide and turn it into a material that could be used to build houses. We have been considering using Ethereum for an ICO to raise the research funds we need. However, a new coin using Hashgraph could be so much more powerful. It could save the environment by basing its value on the removal of pollutants. At the same time its security and efficient use of computer power could put the coin in the hands of the billions of poor in the world. What is not to like? How soon can we start?
Properties of an ideal coin.
The beauty of software is that if there is a good plan it is possible to develop software to achieve it – eventually. Software develop is slow and labour intensive so it is important to develop a good plan early on to prevent time being wasted going down dead ends. It would therefore be wise to concentrate immediately on developing consensus on what the properties of an ideal coin would be. The following characteristics pay no regard to what has already been achieved. 1. The highest possibly security while still being able to rectify mistakes made by humans. 2. Impossible for a central authority to take it over. 3. Fast transactions using minimal computing power. 4. Either a stable value, or an ability to fix prices on something else with a stable value. 5. An adaptable userinterface that is easy enough for the mentally handicapped and uneducated to use for small transactions, but also having very high security modes for large transactions.
A common mistake is losingprivate keys. Since security in the first place is achieved by the network agreeing transactions it seems to me we could also use the network to restore private keys. Someone with a lost key could appeal to the nodes to contribute to restoring it. The nodes would work with the appellant to convince themselves that he was indeed the rightful account owner. The coins in the relevant account would then be moved to an escrow account for a certain time to make sure there were no objections. Obviously this would come at a cost, but if we want people to put their life savings into this ideal coin there must be the highest possible level of trust. The price of DNA sequencing is coming down fast so maybe accounts could be based upon DNA sequences.
Other mistakes are sending coins to the wrong account, or sending too many coins. Just saying, “tough luck, learn to be more careful next time”, gives unfriendly governments an excuse to make use of the coin illegal in their country. The trouble is that any ability of the network to appeal to the recipient to send a refund clashes with privacy. I don’t see complete privacy as an essential feature of the ideal coin, but others may disagree. Maybe we will have to have several coins with different levels of privacy. This is a problem for blockchain based coins because lots of small blockchains are less secure than a single big one. It makes little difference to the security of hashgraphs, so maybe the way forward is lots of coins with some really good exchanges to make transfer between them easy.
If we want our coin to serve as a mechanism for storing value then it is useful to have its valuerise over time. However, there are some strong arguments that say a coin’s value should decrease over time to encourage people to spend it. If value is hoarded up in a coin it is difficult to see how it is benefiting the world. Banks are supposed to take our money and invest it in businesses and houses. Can we create a mechanism whereby worthy causes can use the value stored in cryptocurrencies? If we could it blows away arguments about crypto being based upon nothing. A thought for comments and future posts!