Podcasts: Amentum GP Educational Interviews

POV Crypto & Baselayer Podcasts

CEO of Amentum, Steven McKie, was recently on a string of podcasts in a continued effort to educate others on the deeper fundamentals of how crypto works.

He provides context on a social level, as well as what it takes to master the innate technical complexity when investing in this new disruptive asset class.

The “POV Crypto” Podcast: A popular independent podcast interviewing developers and investors in the crypto industry.

Medium: https://medium.com/@TrustlessState/pov-crypto-episode-45-emergent-communities-gamified-societies-and-yanggang-with-steven-mckie-f4f4900f753c

🎵:iTunes Link

🎵:Spotify Link

🎵:LibSyn Link

Arca’s “Baselayer” Podcast: A family office focused firm with a podcast focused on crypto investing.

🎵: Spotify Link

🎵: Podbean Link

🎵: iTunes Link

Identity and Incentives

The Search for Decentralized Identity

By: Matthew Prewitt, Co-Leader at RadXChange; Cryptoeconomic Advisor at Amentum

With the rise of naming related protocols and services like Handshake and the Ethereum Name Service, it’s important that we understand human-readable names online, and why it’s critical for us to eventually land on a solution that makes sense, globally.

Our Missing Identity

Many blockchain “ecosystem” projects aim to create environments for economic exchange that are more efficient than the real world. The reasons for trying this are clear: If the efficiency of exchange in a blockchain environment exceeded its fiat money counterpart, it would take off. It would not only capture the relevant segment of the real-world economy, but probably expand it by easily operating across borders, at fast transaction speeds, and with little intermediation.

The most important reason this has not happened to the degree many expected a few years is the blockchain ecosystems are hard to govern. This piece will make the case that the principal reason for this ungovernability is the lack of a sufficient and secure identity layer.

Straightening Out Our Concept of Governance

It is tempting, but totally inadequate, to say that governance means solving collective action problems. In fact, a governor need not solve any problems at all to count as governing. Wicked or incompetent governments can still govern without any real recourse or action — much to our dismay.

Governance is best understood as the exercise of authority. But what is authority? Following the view of philosopher Scott Hershovitz, it is “a feature of roles embedded in practices”. To illustrate, a Head Chef has authority in a kitchen. Why? Because the people in a kitchen are, willingly or not, assuming certain roles, such as line chef and dishwasher, and the role of the Head Chef happens to have the feature that he or she gets to tell the other people in the kitchen what to do.

Note that on this view, authority is not inherently legitimate, or illegitimate, or good, or bad, or useful, or harmful. These evaluations of authority, important as they are, depend wholly on the qualities and moral characteristics of the institutions or communities within which the authority is being exercised. Moreover, authority does not depend on anyone “believing” in it. It is basically just a feature in a multiplayer game, which exists as a feature of the game even after all the players recognize that the game is bad, stupid or unworthy of their faith.

Still, even though there is nothing inherently good about it, authority is important. You cannot have legitimate authority without authority.

What Do We Mean by Blockchain Governance?

Blockchain governance (more here) usually refers to the authority to make changes to blockchain-based systems. Such authority might be written into software, so that certain people can de facto make changes. Or it might refer to the social practices (the social contract) by which groups of users of a public blockchain decide — or are persuaded, led, incentivized, or coerced — to collectively adopt certain changes to the blockchain systems, such as protocol updates that constitute a hard fork.

Alternatively, blockchain governance can refer to the use of blockchain technology to structure or exert authority over non-blockchain social practices. A real-world property registry living on a blockchain is an example of this, one where no central party controls the registry, and the state of the registry is maintained by the commons, via individuals who use it as a utility.

What is the Problem?

The single biggest challenge for both kinds of “blockchain governance” is the lack of a decentralized unique identity protocol, by which I mean a trustworthy decentralized oracle that verifies and attests that a person is a real person, who only controls one account and identity.

Without real-world identity, authority cannot arise, because authority attaches to people and their social roles. An anonymous address, which might represent more than one person, less than one person, or no person at all, cannot participate in the human practices in which role-based authority arises. More concretely, basic features of legitimate governance such as voting cannot be conducted.

How Does This Connect with Cryptoeconomics?

Fig 1. Understanding the relational flow between Governance, Identity, and Authority.

Markets don’t arise out of the ether. They are structured by authority. For example, without contract enforcement and the policing of property lines, capitalism as we know it would not exist. Yet these kind of authoritative practices depend upon identity, such as the identification of voters who participate in governance decisions, or property owners who pay the property taxes.

In a just and efficient economy, the rules compensate people in proportion to their labor. The real world economy, however, is not perfectly just or efficient. It has distortions, and often allows unearned fortunes to accrue to players who control economy bottlenecks. We cannot fix this without better governance.

Therefore, the question of building efficient cryptoeconomic ecosystems and blockchain governance are inseparable. A unique identity layer is the key to both.

The Rise of Global Identity

With such a protocol, potentially revolutionary governance practices may become possible on blockchains, such as quadratic voting, quadratic finance, partial common asset ownership, and more. The entire blockchain ecosystem awaits this solution, and will flourish when it arrives.

We believe that the identity system that cracks this nut will involve verified two-way connections between individuals and institutions, in a peer-to-peer manner. A network of connections too vast to be spoofed will become the proof of unique identity. And the network may or may not use blockchain technology in the traditional sense. This is a hard problem, but we are on the lookout for a solution, and one which we believe could be coming soon.

Edited by: Steven McKie

More Reads on Governance & Identity:

The Crypto Governance Manifesto
Loosely Coupled Governance and Its Effects on Future Economies and Statesmedium.com

Blockchain Communities and Their Emergent Governance
Thoughts on Legitimacy and Narrativesmedium.com

The Case for Handshake
A Compelling Bid to Decentralize Domain Namesmedium.com

Video: Open Protocol Mental Models

Understanding Where Crypto Matters

This was a quick video made after all the noise around Facebook/Libra has finally calmed down, and we can start to analyze its importance (or rather, unimportance, depending on who you ask).

Now that we see the tech they’ve built for what it is, we can more easily gauge where Facebook, and other major firms, will find themselves this next decade as finance is disrupted by some of the world’s largest players in the tech and banking sectors.

Follow @Amentum on Twitter

Video: Marketing for Crypto Developers

Starfish SF Panel Series

Here’s a quick video to start your week:


Steven McKie, Amentum CEO and GP, was invited to speak about Marketing to crypto developers, and how that process and methodology can be streamlined allowing your nascent protocol a good chance to mature and garner additional stewards to maintain your open source project.

It is a very educational panel worth checking out, with solid advice that can apply to many developer centric verticals.

Thanks again to Skale Labs for inviting Amentum to speak!

What Comprises an Ethereum Fullnode Implementation?

Demystifying Ethereum Fullnodes

Note: This post was originally published May 13, 2019 on the Amentum blog: https://medium.com/amentum/what-comprises-an-ethereum-fullnode-implementation-a9113ce3fe3a

Like clock-work, similar misinterpretations of blockchain-based “fullnodes” gets a bit out of hand. When we see this confusion, we want to do our part in dispelling it so as to push the community forward and educating them, as I did with bitcoin initially.

Since validating transactions on Bitcoin is a bit different from Ethereum due to how they handle, store, and archive state updates for reference and security, given Ethereum’s difference in architecture, we want to dispel any confusion between the two. This post will only discuss fullnodes, to get a full in-depth breakdown of how Ethereum works, check out this article; or to simply understand theETH transaction lifecycle, this post here.

What Is a Fullnode?

On Ethereum, validating the current state of your transactions only requires knowing the current state of the block that your transaction will be in included in, once it is propagated to the network, and accepted by miners.

Because Ethereum takes your smart contract code, compiles it to bytecode, and then submits your transaction to the EVM to update its state, maintaining the older historical state outside of the block with your transaction is not necessary for immediate validation (though some implementations will store the state of the last few hundred blocks, just for additional security against block reorgs, more on that later).

For Ethereum, a “fullnode” is copy of the entire chains’ history of state changes, from one account to another. By default, all intermediary states of contract transactions and contract calls are computed on the fly during your initial sync (unless you adjust this setting specifically before you sync), and what is unneeded (older state transitions) are pruned away (removed to save storage).

This is a feature, not a bug, since Ethereum abstracts state updates into contracts and compiles them via the EVM before they’re eventually saved on-chain and the state root is updated; this architecture gives us greater flexibility in how we can configure your node to be most efficient, depending on your personal use-case.

This guy gets it. Nodes are your economic representation on a blockchain-based network.

Importance of Ethereum Fullnodes

As we stated above, by default all intermediary states of all contracts that interact on chain are computed by default, but not all of them are stored. It is important, however, to note that those intermediate states could be re-computed and that data’s integrity can be check at anytime, since the intermediate states are stored on disk from genesis with a default fullnode.

This process is of course CPU intensive, and can require a lot of data to store all those intermediate state updates on your harddisk (that don’t even belong to you!). So, this is why by default those unnecessary states are “pruned” (periodically removed from the state trie so as to reduce bloat when initially syncing your node).

Not everyone needs to know the state of every contract interaction in the world (unless of course you’re a data analytics firm, like Etherscan, that needs to store all states to provide you a block explorer).

Example of a state update flow, from an externally controlled ETH account, to the transaction with a contract, and the subsequent internal contract calls. This image was taken from Preethi Kasireddy’s “How Does Ethereum Work, Anyways?

In Bitcoin, the transition from one unspent output (UTXO model) to a new input when you send from one address to another, is the state update itself. This is why many in the Bitcoin space will claim a pruned fullnode is not a “fullnode” in the extreme purist sense, because spent TXs are removed from the state when you fully sync a pruned node. Once removed, you cannot re-compute the state, you must re-sync from genesis to get the full snapshot of the blockchain once more.

Here’s two analogies from Twitter we think will help:’

A very simple analogy to compare an Ethereum fullnode, to a traditional bank account from Nick Johnson (ENS).

Re-computing intermediate states just formulates a full index for reference, in Ethereum.

Now that we understand quickly why fullnodes work the way they do on Ethereum, let’s dive into all the types of economic agents (nodes) that are possible on the network.

Types of Ethereum Nodes

Remember, Ethereum fullnodes are flexible by design, but they still need to do a few things. In short, fullnodes have to be able to: validate transactions that are being mined (if mining); apply the block reward (which is now 3 ETH/block at time of this writing based on recent EIPs); and, the most important task for the majority of users, verifying that state and the resulting state changes are applied properly and follow the consensus rules (which are checked against the state trie in each new block header).

However, sometimes your use-case may require a certain type of access to information (or as the least amount of information as possible, due to system restraints). Here’s each of the various types of clients you can configure on Ethereum:

  • Light Clients: Requires no validation, requests the current state from the P2P network to verify current state (fine for processing payments and simple contract calls), but your validation is out-sourced to other fullnodes with the necessary information.

  • Fast Node (Fast Sync/Warp Sync):Will not validate intermediate states during the initial sync, will validate everything else after that, however. This allows older data to be pruned that likely has nothing to do with your transactions

  • Full Node:As described above, validates everything, and will prune old intermediate states from memory, and will keep an archive of future state trie updates.

  • Archive Node (Historical Node):Validates and stores all intermediate states, nothing is pruned, all state transitions for accounts are retrievable. Future state trie updates and full intermediate states are stored.

Here’s some more reactions from the community responding to others with concerns about Ethereum, due to public misunderstanding of how its different economic nodes function (the misinformation is very widespread).

If you’re looking to sync a Geth or Parity node of your own (Ethereum’s two largest implementations), you can follow this guide hereto get up-to-speed on the various modes prior to syncing.

Dispelling Myth and Confusion

We are in the firm belief that Ethereum’s capability to have so much flexibility with how it stores and updates its state root gives it a real strategic advantage to platforms following UTXO models. In Ethereum, there are many types of clients that record state, and in the future, perhaps even clients that don’t require state at all!

But, as Ethereum continues to mature, and is embedded in more devices, its flexibility will begin to shine and continue to improve (with a fresh blank state with the incoming transition to ETH 2.0, making things even more efficient storage-wise).

We see a future of many clients, all acting as independent economic agents, with different data availability requirements. But, regardless, a fullnode on Ethereum is in fact that, a fullnode. And, how one syncs theirs should not be misconstrued with other chains like Bitcoin, as long as you’re using the right type of node for the job.

References and Other Relevant Educational Resources:

Ethereum node configuration modes cheat sheet
This document is a quick cheat sheet of most common geth and parity configurations explained - usually, everything you…dev.to

How does Ethereum work, anyway?

The Blockchain Stack
Co-authored by Alexis Gaubamedium.com

Synchrony and Timing Assumptions in Consensus Algorithms Used in Proof of Stake Blockchains
Co-authored with Alexis Gauba.medium.com

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