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There is a common misconception in society that things like freedom and self sovereignty are concepts that promote unrestrained behavior which may lead to abuse and injustice. That people need central authority to control them.
In the blockchain industry in particular, especially in the proof of work segment, with blockchains such as Ethereum Classic (ETC), the misconception centers around its values of decentralization, censorship resistance, and trust minimization.
The belief is that in such a permissionless environment, with no central authoritative control imposing ethics and morality, the law of the jungle would prevail and that violence and unfairness would become the norm.
In this post we will explain why a blockchain such as ETC actually promotes the opposite of what these misconceptions are.
Wilderness is violence and force.
People think that because they watch documentaries about beautiful animals in the savannah or jungle, that they are these happy peaceful beings, with plenty of food, mating partners, and shelter.
The truth is that the “law of the jungle” is about survival, force, abuse, fighting, death, and constant hunger.
For example, the typical lion in Tanzania eats every 3 or 4 days, can pass up to 14 days without drinking water, has to frequently patrol its territory against enemy prides, engages in fights against other lions to protect his females and cubs, and has to fight off hyenas each time they hunt an animal for food.
Man has created a totally different environment with civilization, which is the opposite of the law of the jungle.
Freedom is civilization and peace.
Freedom does not exist in the wild. Rules such as basic rights, life, property, and liberty are carefully analyzed, thought out, and perfected systems that have evolved over centuries of trials and errors.
With rules-based institutions like the family, marriage, church, constitutions, the republic, and democracy, man has created a world where abuse and injustice have been significantly reduced.
The global economy trades close to $100 trillion dollars per year and the great majority is conducted peacefully due to rules such as private property, freedom of contract, and equality in front of the law.
In our current modern society, the major source of violence and injustice are trusted third parties, such as governments and big corporations, who frequently violate our rights, but under the guise of the law or for “our protection”.
Examples of these subtle abuses are the lack of privacy, barriers to basic banking and payments, spurious issuance of the money, and censorship on major tech apps and platforms.
Ethereum Classic was created to minimize the influence of trusted third parties in our day to day affairs.
To accomplish this, ETC is a set of strict rules that all users, node operators, and miners must follow to be able to take advantage of its benefits.
We explain some of these rules in the following sections.
The most basic security strategy of a blockchain such as Ethereum Classic is the full replication of its database, also called the “blockchain”.
The ETC blockchain contains all users’ accounts and balances, and has all the smart contracts that power the decentralized applications (dapps) inside its highly secure environment.
The blockchain is replicated on all nodes globally in the network. The idea is to have all the accounts, balances, and smart contracts replicated in as many computers around the world as possible so they may be as decentralized as possible, and impossible to take down by man or natural events.
ETC has two types of participating machines: miners and node operators.
Miners are in charge of receiving transactions and packing them into blocks using proof of work. Node operators are in charge of receiving these blocks from miners, verifying that all the transactions are correct, that the blocks were well formed, and that the proof of work was done.
When these things are confirmed, then node operators add the latest block to the blockchain.
This rule of verification keeps the integrity of transactions, accounts, balances, and blocks, and keeps the database transparent and unified.
To run your own node is a key tenet in the blockchain industry because it is the best way to know that accounts and balances are legitimate without trusting third parties.
The issuance of coins is done each time blocks are created.
The incentive that miners have to put their machines to work, spending a lot of electricity creating blocks, is that they get paid with new coins each time they build blocks that are accepted by the node operators.
Ethereum Classic is currently paying miners 2.56 ETC per block. As there are 6,646 blocks created per day, this is a total payment to miners of 17,014 ETC each day.
That miners have this incentive is what adds the second component of the security model of the ETC blockchain, which is that they secure the database with the work they do. It would be extremely costly for attackers to tamper with the chain to try to modify past transactions as this would require to do the proof of work all over again.
Because the miner computing base fluctuates due to economic and geopolitical conditions, then there has to be a way of regulating the creation of blocks to keep it steady.
When miners reduce their computing power, the blocks get slower, and to solve this the protocol reduces the difficulty of the proof of work so that blocks may be created faster.
The opposite occurs when miners increase their computing power in the network. When this happens, then blocks become much faster, therefore the protocol increases the difficulty in order for blocks to become slower.
This fine tuning system of the difficulty adjustment keeps the block times steady, on average, and stabilizes the issuance of coins.
For all nodes on the network globally to be able to synchronize every 13 second on the same exact version of the blockchain in a decentralized way, the rule of most work done was created.
When nodes wish to join the system, or leave and join again, the only way to know whether they are following the correct chain is to verify the proof of work, follow the chain with the most work done, and reject any attacker chains that may be posing as imposters.
This rule aligns all participating machines in the network to be in lockstep, in their complete isolation, from wherever they may be in the world, without the need of checking with trusted third parties.
One of the main objectives of proof of work blockchains such as ETC is to take away from trusted third parties, in this case governments, the ability to issue the money. History is plagued with examples of government abuse of this privilege.
The rule of hard money is that the coins in ETC are only created when miners produce the blocks, which means by doing a lot of work. This mimics how gold works in the real world, it is so costly to produce that it becomes scarce, and this scarcity preserves its value.
The other thing that aids in the hardness of ETC’s currency is that it has a fixed monetary policy very similar to that of Bitcoin. Every two years the block rewards to miners are discounted by 20% and, eventually, there will be a maximum stock of 210,700,000 ETC.
All these rules combined, form a system that makes all participants in the network behave in a peaceful way, coordinating their actions, even if they may be in different continents, different cultures, different religions, and speaking different languages.
Nations may even be at war, such as is currently the case of Ukraine and Russia, but nevertheless their citizens may be operating nodes, mining ETC, and replicating the database, reaching consensus collaboratively every 13 seconds.
In essence, the rules of ETC make the system decentralized, trust minimized, and censorship resistant, which in turn produce permissionlessness, which is a most fair and just way of aiding positive human action on a global scale.
Thank you for reading this article!
To learn more about ETC please go to: https://ethereumclassic.org