Bitcoin as infrastructure [i]

01f April 27, 2014 -- (cogitatio)

This started out as an illustration of how (rather interesting) applications could in theory be built on top of Bitcoin or cryptocurrencies in general. At some point into my train of thought, however, I decided that painting a bigger picture of the subject is desirable, if not necessary. I personally deem it necessary, as it will hopefully clarify some points on a concept that is yet so poorly understood.

Before beginning the incursion, I must warn the reader that the problem of money, or resources in general, is beyond the scope of this essay. I'm an engineer, not an economist, nor a finance expert. Nor am I a connoisseur of Bitcoin, for that matter, but only a lost soul wandering in the dark, finding questions to answers never posed.

Part I: Introduction and recurring patterns in human history

In a previous post I (only) mentioned how we humans don't seem to fully grasp the underlying mechanisms behind social bonds. The abstract concept of "network" predates human existence, in fact it predates animal existence and life itself: physical and chemical bonds are probably the first examples of graphs on our Universe's timeline, at least as far as our current knowledge can tell.

Graphs are themselves structures, describable using sets1 and pairs. However, even simple structures such as directed graphs are not enough to describe physical and chemical phenomena (for example, those involving energy), although some phenomena may be (possibly) unified under simple, abstract structures such as categories. But I digress.

These network-like structures repeat themselves at the macroscopic level: biologists like to study the so-called "swarm intelligence" of ant colonies and bee swarms, observe organizational patterns and how they evolve. This is no less true for humans: throughout history, we competed and cooperated, we explored, exterminated or on the contrary, created new relationships and merged. In many of these events, structure, or infrastructure, has played a major role.

For a long time, the biggest hurdle in the way of human social or inter-social bonds was physical, or more precisely geographical in nature. The Vikings were such a great people mostly due to their proficiency as seafarers. Babylonians and Greeks were great cartographers, this being a necessity to find the shortest, or the "right" path from one geographical point to another. Finally, the Romans were renowned for their roads and bridges, infrastructure proven to be essential for communications and trade and implicitly for the well-being of Rome. Indeed, this is probably one of the first examples of engineering-driven development in human history.

We can easily see how structure, or infrastructure, has influenced major events in history. One such series of events, depicted on a monument known as Trajan's Column, were Trajan's wars2 on Decebalus' Dacia: to cross the Danube and invade Dacia, the Emperor hired an engineer known as Apollodorus to quickly build what became an important piece of engineering and architecture. Later on Trajan's successor dismantled the bridge to keep the Empire safe from the barbarian invasion.

Another interesting series of events, which I will only briefly remind, are the explorations which led to the colonization of the two American continents. These explorations were mainly driven by the rise of the Ottoman Empire in Anatolia and Eastern Europe: the Ottoman Türks being muslim and all, they weren't particularly friendly to Christians. Unfortunately, they also came to occupy a segment of the trade route between Europe and Asia known as the Silk Road. Now, some seafaring Spanish and Portugese explorers were now sure that the Earth must be round, so they went West hoping that they'd reach Asia if they traveled long enough. Much to their surprise, the Indies they reached were not the silk-rich Indies they had expected, which is why some of them decided to slaughter the American natives. But again, I digress.

Now we can fast-forward to the modern Industrial Revolution, when horses were complemented by engines and roads by railroads. Thus the communication latency turned from days to hours, and then to minutes after the invention of the electrical telegraph. Of course, the telegraph itself contributed to railway development, as most early telegraphs were built alongside railroads for signaling purposes.

I have one last seemingly unrelated remark, which will lead us into the next part of this essay: one of the main challenges in telegraphy consisted of finding a reliable alphabet to encode electrical signals. Many of these encodings, including the standard Morse code, were binary. This had an impact not only in engineering, but also in the science of the 20th century.

Next: The fractal nature of computing infrastructure

  1. Admittedly, sets are one of the cornerstones of mathematics; this discussion, like any other, can only remain precise in the framework of mathematics. Alas, this is not entirely possible, but I can at least try to hold on to this path as much as possible.

  2. One who's missed their history classes might feel inclined to believe that I am biased and suffering of dumb nationalism for calling the Dacian Wars a "major series of events". They were indeed quite an important turning point in Roman history, for at least two or three reasons. Firstly, both Burebista (one of Decebalus' predecessors) and Decebalus himself were meddlers into the internal affairs of the Roman Empire, and they both sided with the losing party, which made them enemies of the Empire. Secondly, the Getae and Dacian tribes, reunited under Decebalus, made frequent raids into Roman provinces, which caused a lot of trouble. Thirdly, Romans found an important source of gold in the new Roman province called Dacia Traiana. Finally, the monument itself stands as evidence to the battle's importance.