What is Consensus: Rules without Rulers

What is Consensus: Rules without Rulers

Let’s start with some basic ideas. Who here knows, who is in control of Bitcoin? Who here thinks no one is in control of Bitcoin? This is the fundamental issue at the heart
of many of the debates we’re having today; the debates about governance,
the debates about scaling. Who is in charge? Bitcoin expresses a new thing,
a [system] that has rules without rulers. For [most] people, this is a very confusing concept;
in almost everything we’ve seen, rules come from rulers. You trust the rules because you trust the
rulers — what we call “appeal to authority.” Of course, appeal to authority is known as
a cognitive bias, a bug in our brain’s software. It makes us discard logic and reasoning
in favor of attribution and authority. It makes us associate as tribes, teams,
political parties, and make decisions based on… whether the person expressing ideas is
part of our tribe or part of the enemy tribe. We all know that the enemy tribe has
always been an enemy, up to no good, trying to destroy this beautiful world. Always. The problem is, of course, that everybody
who belongs to the enemy tribe thinks that we are up to no good and trying to destroy the world. You see this emerging in every
sphere of human existence. You see it emerging in the conversations around
Bitcoin and many of the other open blockchains. People find it very difficult to accept the idea that
a system can exist with rules and without rulers. A system without authority, a system in which
it doesn’t matter who is the most popular or what opinions they have, because
they are unable to change the rules. I think that was demonstrated resolutely just
a couple of weeks ago, culminating two days ago… when the rules were not changed. Again, the rules were not changed. This time, there was a very large group of people
who had a different opinion about the rules. Their opinion was not right, their opinion
was not wrong. Their opinion was just opinion. In Bitcoin, opinions are not judged based
on who holds them; what matters is… whether they can reach consensus with the
overwhelming majority of participants in the system. If they cannot reach consensus with the overwhelming
majority of people in the system, it doesn’t matter… how much money they have, how much
authority they have, how much popularity they have. That is how it should be. A lot of people looked at what happened a
week ago and said, “Bitcoin Core won. Victory!” Which is not true. Bitcoin Core did not win. ‘Bitcoin Core’ happened to be with the side of
consensus, or at least with the side of status-quo. If you don’t convince the overwhelming majority
to change the rules, the system ensures that the rules remain the same. All you have to do in this system is follow
the rules, the rules that exist today. If you want to change the rules, you [must]
have overwhelming consensus. Otherwise, the system will punish
you financially in many cases. Everyone who tries to change the rules
without overwhelming majority loses. Core didn’t win, they just didn’t try to change
the rules without overwhelming consensus, and as a result the rules were not changed. We will see these battles happen again and
again. In fact, the battles we’ve seen so far are
tiny compared to what is coming. Ivan talked about creating regulations so that people
can trust, invest, and participate without fear. Regulations are the way we used to run governance,
in systems where there are rulers, because regulations are created by regulators. Those are rules with rulers. The good news is that they can’t change the
rules of Bitcoin, because they do not have consensus. There will be regulations, but there will be regulations
only of the systems surrounding open blockchains, not of open blockchains themselves. Open blockchains are already regulated by mathematics,
by overwhelming consensus, by network-based rules. These are not systems without regulations;
these are systems with very predictable, deterministic, clear, transparent regulations based on mathematics. Regulations not subject to political power,
compromise, discussion, change. That is why this system is special. It is special precisely because it cannot
be changed or subject to political will. A lot of people don’t like that. They don’t like the existence of a system
that is fundamentally supranational and outside of the traditional controls of political power. They don’t have to use it. I will. The system will not change to subject itself
to the whim of those who do not like the idea of a system that is outside of traditional
governance and regulatory structures. The whole point of this system is that it is outside. The whole point of this system is that it
will not be subject to traditional regulations. You can regulate your country out of Bitcoin,
but you cannot regulate Bitcoin out of your country. Many countries will regulate themselves out of Bitcoin,
out of Ethereum, out of all the open blockchains. They will end up getting the benefit of the closed and controlled blockchains, the regulated governance… and “safe” blockchains. I don’t want safe. I want free, innovative, global,
transnational, neutral, censorship-resistant. I will continue to use the system
that expresses those principles; through my choice, I will participate
in consensus without rulers. These systems will not be regulated. When you present the world with a system that cannot
be regulated through traditional political power, this will not go down easily. A fantastic quote by Clay Shirky comes to mind: “Organizations that exist to solve a problem
are resistant to fixing the problem.” Bitcoin fixes the problem without the organizations
to solve it, without the intermediaries. A lot of people see these open blockchains and
immediately assume these will disrupt banking, finance, and payment networks. I thought so too. And yet the surprising thing is, the first thing disrupted
by open blockchains is regulation and regulators, governance and governments. It disrupts the idea of hierarchical, representative,
top-down, jurisdictional, geographical regulation. You cannot decide how these systems operate within
your borders; they are not really within your borders. They do not see borders. This makes many
people very uncomfortable. This is a test. It is not a test for Bitcoin,
it is not a test for open blockchains. It is a test of democracy, of self-determination,
of free expression, of free assocation. Some governments will fail that test;
governments will be inherently suspicious… of a system that empowers people to use money
and engage in commerce without interference, without censorship, without control. Many governments will fail that test;
they will violate principles they claim to hold. For the first time, they will be tested by a network
that will force them to reckon with these principles. Governance is not something
that will be “added” to Bitcoin. It is not something that will be
“added” to open blockchains. It is something open blockchains already do, in a new
and different way, that won’t change to suit the old way. That is the fundamentally disruptive
potential of this technology. In this entire system, there [will] be
a lot of debates and disagreements. There are many choices to be made at every step
on how to solve scaling and architecture problems, how to make the system more robust, resilient, cheap,
secure, fast, and able to absorb billions of people… who need to use systems like this. Right now, we can’t do it. Right now, the open blockchains we have today cannot support the population that need to use them. That is okay, this is still the prototype. This is a nine-year-old going to school,
still learning how to be in the world. If you’ve spent any time with a nine-year-old,
you know that they are pretty awkward, unsure, unsteady at times, temperamental every now and then. That is how this technology
[will] be for quite a while. That doesn’t mean it can’t scale,
that doesn’t mean it can’t change. It will. Within this nine-year-old body, you can see the future
potential, the image of who this person might be. What this technology might be, to stretch
the metaphor. But it is not there yet. It is important to separate what we have today
and what is possible in the future. A lot of people assume that the scalability we have
today will simply extrapolate on a linear basis. I recently read this on Twitter; someone said,
‘If it costs $5-10 to do a transaction today, then in 10 years [with] a billion people,
it will cost $100 to do a transaction.’ ‘It will be impossible to use for most people.’ If it took an hour to send a JPEG over the internet
in 1990, then when everybody is sending JPEGs… over the internet in 2017, it will take
ten days to send a JPEG over the internet. That is not how scalable, exponential systems work. But in changing the scale of this system, we [must] think
about what compromises and trade-offs [to make]. This is a decision everybody has to make. You are all participants in these open blockchains. If you run the software, if you choose a wallet or an
exchange, you are choosing how this system evolves. Through your actions and spending choices, you are
participating in the formation of future consensus rules. You [must] think carefully about
convenience versus liberty. Do we want a system that is cheap
or do we want a system that is free? We might have to go through a period where
the system is expensive. That is okay. It is not forever, it is not a permanent state of affairs. Today it is harder to use bitcoin for everyday
transactions, like buying a cup of coffee, than it was in 2013. There is a reason for that. We are trying to do it
on a much greater scale, with a lot more demand. It won’t be like this forever. Already, there are many ways to improve the scalability,
performance, security, and speed of this system. If you read the debates online, this is presented
not just as a binary choice between ‘A’ and ‘B,’ but as a choice between good and evil. One choice is “obviously” the best way; the other is
“obviously” an Illuminati plot to destroy the world. Some people will even say that both choices
are an Illuminati plot to destroy the world. In which case, take two steps back from
that person. They might be dangerous. In my opinion, both sides of the raging debate
we’ve seen about scale are doing what’s best (in their mind) to scale this network. I personally know many of the people
who participate in these debates. I have spent time working with them,
or acquainted with them since 2012. Some of the most hated personalities in Bitcoin
are the people who gave me my first bitcoin, who introduced me to this, who helped me at
my first conference, who helped me write my book. People who I honestly and truly believe are doing
the best they can for [what] they believe in. We must not forget that we all share one thing
in common: we love the idea of freeing the world… from monopoly money, monopoly banking, and
bringing economic [access] to 7.5 billion people. That is the thing we all have in common. We can disagree about the ‘how,’ about the ‘when,’
but let’s not forget that is what we want. It is very easy to assume that people are
motivated immediately and easily by money. Don’t get me wrong — money corrupts people
and sometimes it does so in subtle, slow ways. But let’s not not assume that everybody making
money, who has a job, profession, and income, or is affiliated with a company, is easily manipulated
into forming their opinions based on who pays them. That is appeal to authority,
the authority of their employer. That [can be] just as mistaken as
any other form of appeal to authority. Scaling is a difficult problem. The answers are
not simple, because the questions are not simple. Can we scale? Yes, but it matters ‘how’ we scale. Some ways of scaling have side effects that,
at least in our community, are very dangerous. Centralization of control is the biggest
side effect of many scaling choices. We must be very careful to ensure that, as these
systems scale, we preserve important principles: openness, neutrality, censorship-
resistance, and decentralization. We avoid the concentration of power and control. Decentralization isn’t a Boolean,
an ‘on’ or ‘off,’ a ‘yes’ or ‘no.’ It is a scale. Is Bitcoin fully decentralized? It is not. Is it one of the most decentralized [systems],
especially in finance, to ever happen? It is. How can we make sure that, in the future, it is
at least as decentralized as it is today or better? At least as private as it is today or better?
At least as open as it is today or better? I talked about rules without rulers, yet there are
many people who want to take the role of ruler, who want to dictate rules, who want to take control. It’s a natural inclination of the human species
to see the absence of rulers as a job opening, an invitation to ascend to the throne. We [must] resist that. We fall prey to that also when we make
simplistic assessments of other people’s opinions, associate those opinions with their
employer, assign them as ultimate evil, and condemn them to the opposing side. We simultaneously reflect that back on the people
we do believe in, softly pushing them to take the throne. There [will] be a lot of people who try to
introduce themselves as intermediaries, in a system designed to remove intermediaries;
who will try to hold your keys “for your own safety,” who will try to ensure that only
“good people” can do transactions. “Will somebody please think of the children?” I do think of the children. I want children to live in a world where 7.5 billion
people have access to an open economy, a future where everyone can participate, a world in
which we do not allow others to make choices [for us]… about who is “good” and “evil.” I don’t believe in Santa Claus. If you give someone the opportunity to make
a list of the “good” kids and the bad kids, that gives them ultimate power. As an adult, maybe you read the story of Santa
Claus and realised that he is a fascist dictator. [Laughter] No one elected him.
What a patriarchy, how did this happen? We just assigned a red-robbed dude with a white beard
to decide for the children of the entire world? Let’s not do that again. People will attempt to introduce controls, say that
we shouldn’t allow everyone to use these systems, because “bad people” may use them. We shouldn’t allow everyone to transact and
use money because “bad people” will use money. Again, that fundamental splitting of the world
in terms of good and evil, creates rulers and power. Power is abused. My philosophy is simpler,
and most people don’t agree with me. I don’t think there is absolute good or absolute evil. I think good people do evil things all the time.
Occasionally, evil people might do good things. People change. More importantly, one of the worst things we can do
is give someone else the control over that decision. We will scale. We will grow Bitcoin.
We will grow all open blockchains. They will be attacked as ideas, as networks,
and as currencies. Financially and legally. In some countries, [people who use them
may be attacked with deadly violence]. People participating in these systems today risk
their lives in a handful of countries around the world. I’ve spoken to a few people who are using
bitcoin in Venezuela, under extreme risk. But that risk is worth it, because the greater risk
is losing the ability to give their family a future. They are willing to take that risk; there will
always be someone willing to take that risk. If your government bans access to open finance,
you really need to get yourself some bitcoin. That is exactly when you need this system most.
It is hard to explain in places like Scandinavia. What do you need bitcoin for? You don’t.
This is one of the most cashless societies in the world. You have access to banking — unless you’re an
immigrant or refugee who is undocumented. Or a Bitcoin company being shut down by the banks. Most people who come to
these events don’t need bitcoin. But I hope you will see why it is necessary
for everyone else in the world. One of the things that is common in countries with
strong democratic institutions, more equitable… and fair governments, strong cultural bonds,
and a progressive society, is that people who live in these countries
[often] want everyone else to live like that too. You don’t need bitcoin, but what if
everybody else gets what you have? The problem is, banks cannot [offer] that. Banks concentrate power in the board
room, in the cabinet, in the parliament. Your board rooms, your cabinets, your parliaments
[may be] benign, but there are 194 other countries. Most of them [are not like] that;
most of them [will probably never be like] that. Part of the reason is because those
political systems can control money. If they can control money, they can
control democracy or eradicate it. Control over money is an enormous power. Countries should have separation of money and state,
just like the separation of church and state. It seems logical, but it is not the case [today]. The countries that need this technology the most
cannot trust their governments or their banks. They do not have the social institutions to deliver
prosperity and liberty at scale, as Sweden does. As early users of this technology, the choice you make
between convenience and liberty will affect billions. Thank you. [Applause]

100 thoughts on “What is Consensus: Rules without Rulers

  1. Great words. Bitcoin is opening up the possibilities to a life without rule sets at the whim of someone who is unnecessarily acting as your boss. Being free to choose your associations, to be financially empowered, to be censorship resistant and to live decentralized is what it is all about. Make sure to make the choices in Bitcoin that will keep enabling that.

  2. Look at that crowd. What a dude ranch. I'll know Bitcoin has made in when I see rooms like this filled with both men and women, old and young.

  3. Andreas, it seems to me that we have a shift in the way people invest in companies and their technology. The shift is occurring, I think away from traditional model of people owning shares of a company to people investing in companies via they are number one asset, their token. As such, could you please inform us which companies are offering tokens for supporting the core ideals inherent in Bitcoin. I am particularly looking for companies that are working on actual infrastructure and the ecosystem.

  4. Dear Andreas,
    Thank you again for a great speech.
    Please allow me to ask:
    How does the consensus work, when good devs try to make Bitcoin better?
    Are there 50 devs in total who vote for implementation of something 1 dev made?
    Or are there 1000 devs who have that power?
    You said that any change will only be implemented when there is consensus in the community.
    Who is the "community"?
    I have a few Bitcoin…
    I am very active in "the community" by listening to you on YouTube, and a lot of others.
    I follow good people on Twitter.
    But nobody asked my opinion/vote when a change is suggested.

    When there is a change implemented, is that called a softfork?
    Is every little change a softfork?

    In other words:
    What exactly is the structure of how changes are made?
    And more important: Who are the people that have to agree and how many of them are there in total?

    Thank you so very much for clarifying this.
    It puzzles me already longtime.

  5. I really wish I could express my ideas verbally as well as Andreas. He's so clear and convincing! Something I need to work on.

  6. Cryptocurrency is a transfer of wealth to a different set of people, who's preferences will rule, because the markets follow the money.

  7. I watch these videos because it's Andreas and it's his channel, but I gotta be honest these videos aren't informative at all for me, and are usually dated as fuck. NO way of knowing how old the video is or if he's uploaded the same clip to his channel already. The information on this channel is limited.

  8. 6:42 "Supernational" is a term I'd like to see used more commonly. He used it so well here that his context actually provides a nice definition for others!

    Edit/PS: maybe start at the beginning tho for the full context, of course

  9. What a beautiful mind. What a clean mind. The presence of Spirit (and lack of ego) are gleaming… as always. Continued prayers for Andreas to stay protected in Spirit as he continues his journey.

  10. Santa Claus is a fascist dictator… LMFAO !! As always, you're THE best advocate of the crypto space, Andreas!

    And to the people that will inevitably reply to this post:
    It's a joke, he made a joke. Don't get hung up on it too much….

  11. the best way to achieve something is not by democracy. is by testing many things and then keeping the best. thats why i love the creation of many altcoins. im hoping for the best one to win

  12. Sometimes i'm convinced that this guy is either Satoshi Nakomoto "himself" or part of the intimate team that used the pseudonym…

  13. Ive been saying it since I discovered Bitcoin a month ago. You cannot regulate what you cant control. Essentially you're chasing a 👻

  14. I may be wrong, however, I'm seeing a bigger picture evolve in my head while watching this, mainly, a political blockchain. What would happen if we have a political system "governed" within the blockchain concept?

  15. This might sound strange but the power of the blockchain is its decentralisation – yes. And yet it's as though the bitcoin blockchain is currently a focus of centralisation. I'm not familiar with the intricacies of the coding and mathematics involved, but is it possible to have a system where a new blockchain is created every time someone wants to participate in the trade of a particular commodity? So let's say there are the people who trade wheat or salt or whatever. They have their own discrete blockchain. I guess what I'm suggesting is that rather than scaling up bitcoin, is it possible to separate it into many smaller blockchains that are used by communities whose members will quite naturally do a lot of trading with each other. I hope this makes sense to someone.

  16. Your comments on the creation of enemies by extreme polarization were clairvoyant as fuck. Continually amazed at the duality of your technical knowledge and social awareness. Killer combo, and exactly what's needed.

  17. The bitcoin tx fee is 30 USD. Can a poor person that have a android phone to 1 USD pay 5 * 30 USD in Bitcoin fee for open the 5 LN channels? Or pay 2 * 30 USD for 2 LN channels? Or 1 * 30 USD?
    60 USD is all he have to food for 2 weeks. And he have no more. He have no bicycle because he have no money to bought a bicycle. So he work when he bring water. It is heavy to bring 20 l water 2 km from you place.
    Will he choose to eat or open LN channels? I know what I will do.
    For rich people is can be difficult really to understand how it is to be poor. I know it because I was not knowing until I was live together with poor people.
    The bitcoin fee we have now make Bitcoin only for the lower class and up. Not for who that really need Bitcoin. The poorest 1 bn.
    If only 100 mil open 5 ch then the total cost is 100,000,000 * 5 * 30 = 15 bn USD to build the network.
    If every open ch cost 280 byte: 140 GB =140,000 1 MB blocks. If all space is used to LN open only tx: 972 days, 2.7 years. But the network also need to serve close cn tx, normal tx etc.

  18. Your videos are pretty much the only ones on Youtube that I watch in regular speed! Simply because they are worth it.
    Thanks a lot for your work!

  19. IMPORTANT: The community needs to learn about a place or places where and average user can know what are the latest consensus from the paperWallets address algorithm all the way to the new accepted forks rules from legitimate forks

  20. If only we could structure our society like this, to have rules without rulers… Too many people that have no skin in the game want to make calls in how I should use my property!

  21. Government regulations are what scares me. In my 60 years on this planet, I have never known any government to do anything right, other than line their own pockets.

  22. Exactly. Both solutions to scalability problem shall compete in friendly atmosphere cos people on both sides are aiming at the best that open blockchains wil deliver: economic freedom, financial sovereignty. But people are emotional and dumb, people have confirmations bias, and drama won't go away

  23. Modern world will not have boarders and will not have control the current governments have with corrupt people like most of the political elites in the current world!

  24. “We love the idea of freeing the world from monopoly money, freeing the world from monopoly banking, of bringing economic participation to 7.5 billion people.”
    Ahem, brother.

  25. Andreas for president 😁, even if we dont need rulers anymore, sb should can still have the title. My vote goes for Andreas, even when, sadly, he is a BTC guy.

  26. This is only way funner for the people that are in it early. What about the last guy that gets into bitcoin after it completely takes over at its highest price

  27. You are such a great speaker. People should just stand and admire. A great lecture with a lot of beautiful thoughts. Thank you!

  28. Andrea's shouldn't of bothered talking to a bunch of swedish cucks! These people are the true enemies of bitcoin and blockchain tech they dream of a non disruptive cashless society based on the central bank and over regulations a real pack of socialism totalitarian pack of dogs

  29. If i had to choose which are the top 10 speaks of Andreas i would for sure put this one in the list. He is a real teacher of free life and living. I am glad i had the opportunity to listen to him from near and shake hands. Keep up the good teaching

  30. Andreas is always an inspiration a reminder of why #Blockchain is so important.

    Let's remind each other of the dream: it's not really for us + now: it is for tomorrow for those that don't have the unparalleled opportunity and abundance we have.

    Keep it up: we will make a better world for us all. Even if that is a world without bitcoin and blockchain. Our mission matters more than the implementation, and we have the talent and will to do make the dream happen no matter what together


  31. So naif that idea of freeing the world from monopoly of currency and banks and also to refuse to consider the possibility of some intelligent agency behind the whole technology even when it's of public knowledge that SHA 256 was devised by NSA and that ARPANET, the predecesor of Internet, was a US military project. What will happen when government goes global? Will it be then possible to regulate bitcoin and crypto currencies?

    By the way this guy is so good as a speaker. I'd like to be like him 😅

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