Editing Dumb contracts (section)

= Other purposely misleading terms =

I’m trying hard to dispel some of the hype around these terms and I can’t do that as long as we insist on calling a cat a dog. I’m not sure how aware most people are of this but here’s a list of terms that I’ve put together in the blockchain space that I believe have been purposely abused by marketers to manipulate Bitcoin users and certain investors.

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== Decentralized ==

Bitcoin originally used this term to refer to the absence of structural (or hierarchical) organization needed to record account balances. The Bitcoin system is thus an emergent property that arises through the gradual consensus reached by allowing equal and open participation of everyone who uses it (in this case miners acheive the consensus.)

This property of consensus is quite different from a reputation system or a democratic voting protocol because the process is achieved through a one-way, cryptographic protocol that can’t be cheated outside the assumptions made by the protocol – a guarantee that made Bitcoin famous.

Unfortunately, this term is abused to refer to any kind of organizational structure run by multiple people (ironically, one of the key things Bitcoin solved through proof-of-work.) Examples include The DAO where multiple investors in the system vote on proposals submitted to The DAO.

B &amp; C exchange, BitShares, and OpenBazaar also label their systems as decentralized when the original (and implied meaning) that was popularized by software like BitTorrent and Bitcoin is completely different. There are numerous examples of this misleading term being used to market projects in the blockchain space and it needs to stop.

Recommended definition: distributed.

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== Peer-to-peer ==

Bitcoin and similar decentralized programs used this term to refer to the unstructured network typologies formed by the users running the software. It’s a definition that usually implies having the same properties of decentralization and thus has become synonymous with decentralization.

The outside usage of “peer-to-peer” is different and is more generally used to refer to any service whose functionality is provided by its users. Good examples include Uber and Airbnb. So while this may not be intentionally misleading its still quite misleading in the context of blockchain tech.

Recommended definition: Use client-to-client to talk about peer-to-peer computer networks (imperfect since every client is also a server but that seems to be implied here.) The service-based definition of p2p seems to predate modern networks so they can keep that definition.

Thus under these new terms we can now talk about how the Bitcoin software is client-to-client, peer-to-peer, and decentralized to denote its network topology, logical service provisioning, and organizational trust model without any confusion – useful right?

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== Decentralized organization ==

When talking about a decentralized organization, Ethereum has said that “instead of a hierarchical structure managed by a set of humans interacting in person and controlling property via the legal system, a decentralized organization involves a set of humans interacting with each other according to a protocol specified in code, and enforced on the blockchain. A DO may or may not make use of the legal system for some protection of its physical property, but even there such usage is secondary.”

The problem with this definition is that it confuses the trust model of a standard real-world organization with that of the blockchain which is quite misleading. How about “programmatic organization” since that captures what it is without being confused with the underlying blockchain.

Recall that I said that an organization can’t be considered decentralized. So at best, you could say that a programmatic organization is a collection of members whose assets and permissions are controlled in accordance with the rules programmed when the organization was founded.

The state of these assets and permissions is managed by a blockchain in such a way that its operations are transparent to every member within the organization. Thus, a programmatic organization is represented and managed through a decentralized consensus mechanism like a blockchain but relies on a trust-based model for its real world operations.

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== Decentralized autonomous organization (DAO) ==

Ethereum defines a DAO as “an entity that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do.”

There’s a lot going on here. A lot, which makes it utterly confusing to make any sense out of this. What’s on offer here seems to have multiple parts:

* The organizational structure
* The level of automation needed
* The level of human involvement
* The software protocol

The idea behind the organization structure for a DAO is that humans only need to provide minimal input into an automated process so that while some things happen automatically – the humans are still ultimately in control. If that sounds a little vague its because it kind of is - the level of automation and how involved the humans need to be is ill-defined.

Putting aside the obvious issues of using “decentralized” in the title for now: my biggest problem with this definition is how it seems to be applicable to a standard human-based voting organization and with Bitcoin itself. The consensus-based properties of a blockchain are unique and are far less vulnerable than a human-based democratic process. So I consider likening things like “The DAO” to “Bitcoin” to be purposefully misleading.

To try sort this mess out I tried to find some examples of a “DAO” but almost none of them were autonomous or decentralized in the same way that Bitcoin is, and obviously a human run organization like “The DAO” that needs humans to invest in other (potentially) decentralized autonomous systems shouldn’t be considered an autonomous structure at all.

As far as I can tell: “The DAO” is functionally no different to any regular programmatic organization run by humans – autonomous in the name or not. I do realize that it’s heavily implied that we’re somehow talking about some kind of next-generation intelligence or blockchain-like structure, but this is a simple smoke screen – for, wait for it – '''nothing new.'''

Even though this term seems to have been constructed to purposely mislead journalists and investors into thinking that Ethereum is doing something ground breaking (and somehow manages to contains '''multiple''' oxymorons), I believe that the idea behind a DAO is still possible and useful. We just have to restrict the definition to only those systems with similar properties to a blockchain (which I’ll refer to as “decentralized autonomous systems” for convenience.)

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== Examples of decentralized autonomous systems. ==

* '''Bitcoin (and most cryptocurrencies)''' – Gives rewards for solving hash-based puzzles to facilitates consensus, allowing the movement of assets to be accurately maintained in a shared ledger – no human input or verification needed as this is all based on cryptographic proof.
* '''Namecoin''' – Runs on a standard blockchain and allows for registering domain names which can be queried on the blockchain for their IP address. The system is more useful when combined with standard DNS so that domains are accessible without installing Namecoin.
* '''Datachains''' – Full disclaimer: my speculation. Arbitrarily specialized AIs that are downloaded by peers to find patterns in scattered data sets. New assets in the system would be given to participants for finding matches which would be publicly verifiable so that the structure would function similar to a blockchain but would use collateral in a two-way-peg to mitigate spam and a hybrid PoW for security.
* '''Timechains''' – Full disclaimer: some of my work. Timechains create a time-lock encrypted chain of public keys which release rewards when broken. The public keys can be used to encrypt information so that the information is released in the future without human involvement.

Note: This last one may not be a good example of a DAS as a timechain requires initial trust in the person who stitches the chain together – but after the timechain is setup it requires no further human involvement to provide its basic functionality so it operates as a DAS.

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