Mainframe CEO: China’s lawmakers don’t understand decentralisation

Posted: 23 October 2018 6:30 pm
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When new technologies say no, they mean it.

Mainframe is a blockchain-based platform for decentralised applications, built specifically to be unstoppable, private and utterly censorship resistant. To this end it runs the network on a proof of stake variation, a token-based incentive framework known as "swap, swear and swindle" (PDF). In brief, it lets nodes offer a range of services and get paid in tokens when they do. These services include:

  • Swap: Exchange data, messages, information and anything else that can be digitised between each other. They might be sent directly, or bounced among multiple participants. The ability to bounce data is one of the simplest services a node can offer.
  • Swear: A deposit which lets a node offer more complex services to their peers.
  • Swindle: A smart contract which penalises nodes for non-compliance with network rules.

It's specifically designed to remain as immutable, and censorship resistant, as possible, which might make recent news out of China especially curious for it.

A failure to get with it

Chinese legislators recently proposed a bill which would require blockchain service providers to take their users' names, ID numbers and full details, and actively censor and delete unwanted material that people post on their platforms.

In response, the blockchain industry said something like "?"

"Simply put, these rules, no matter how tight, cannot definitively stop the immutable and censorship-resistant nature of operating blockchain networks, such as Ethereum," said Mainframe CEO Mick Hagen.

While the proposal appears to have been specifically addressed to the blockchain industry, following the permanent and immutable publishing of some embarrassing-for-authorities materials on the Ethereum blockchain, it's more likely to be an obstacle for unintended targets, hitting other blockchain service providers around the country, Hagen says, with a detrimental impact on adoption of blockchain technology.

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The Chinese government has, broadly, been enthusiastically in favour of blockchain while trying to stifle cryptocurrencies, so a bill that would delay adoption seems like an unusual turn.

"While the recently proposed Chinese legislation would impose prohibitive ID rules for blockchain service providers throughout the country, it is unlikely that such requirements would serve as anything other than yet another stumbling block for mainstream adoption," Hagen notes.

The impossibility of enforcing the bill, along with some of the unintended downsides that might result, suggests that China's lawmakers are still trying to get around the concepts of blockchain, Hagen says.

"The existence of legislation that attempts to drastically censor blockchain networks is a signal that lawmakers still do not understand what the base concepts of decentralization, i.e., you can't halt a globally-run ledger through national means. Requiring citizens to publicly name themselves on a blockchain ledger goes against the entire ecosystem of decentralization, and the purpose of blockchain to begin with."

It's a timely concern in other ways. With respect to the tariffs the United States and China are currently taking turns slugging each other with, there are growing concerns in China around how information is being filtered as it's passed up government rungs. Some are describing the disconnect between real reality, and the official version of reality that parts of the government are operating on, as "crippling."

The disconnect may have filtered to blockchain knowledge as well. When no one tells their immediate superior that the proposed laws are impossible and doomed to fail, you get proposals like China's new blockchain bill.

While China's blockchain bill might be one of the more pointed recent efforts to crackdown on immutability, similar concerns and disconnects have emerged elsewhere. Russia's government recently ordered Telegram to hand over its encryption keys even though it couldn't, and Australia's government is gently muddling through a self-contractory data access bill and the United States is dealing with the unintended consequences of its post-9/11 privacy downshifts.

A lot of legislators all around the world are running face first into the solidity of new technologies like immutability and unbreakable encryption these days.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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