The Trust Machine — Part1: Sybil Protection
The full article was originally published by Hans Moog on Medium. Read the full article here.
Designing humanities trust layer for the digital world
This is the first of a series of blog posts that will gradually introduce the concepts and ideas behind a novel DLT architecture that aims to solve all existing inefficiencies of contemporary DLTs.
The current effort of the IOTA Foundation is to make the network decentralized in a secure way so we have been focusing on vetted principles, first. With Nectar around the corner we are finally going to have the time to look at each building block and improve or simplify key elements.
I believe that going the safe route is definitely the best option for a project of the size of IOTA, but I also believe that Coordicide is not the end of the road but merely the beginning.
All of the concepts and ideas that I am going to describe are very radical and not backed by extensive simulations or research.
They are heavily inspired by conversations with the early developers of IOTA like Paul Handy or Come from Beyond so this will be an attempt to develop a full and clear specification of my vision of the “ultimate” version of IOTA.
The reason why IOTA has taken so long to become decentralized is because we didn’t want to take any shortcuts. The network that we are going to design is not only going to be faster and simpler but also more efficient, more secure, more robust, more decentralized and more scalable than any existing technology.
The first part of this series discusses the sybil protection problem which is currently not even perceived to be an actual problem by most projects and which I consider to be the reason why contemporary DLTs are so hard to scale.
Society is the first decentralized network
If we see humans as nodes that transact with each other and that communicate via gossip then the Scalability Trilemma has been solved tens of thousands of years ago with the rise of the first societies.
Society scales because it has established a way to tell honest and malicious actors apart. It uses a mechanism called trust which is a funny name for:
“I think that somebody is better off being honest than betraying me, because he would either lose his reputation, face legal consequences or miss out on the good things that I would be willing to do for him.”
This intuitive perception of real world game theory in combination with time forms the basis for a reputation system (trust) that allows us to build complex societies even though our capacity of getting to know other individuals is limited.
It captures all kinds of human relations from family and friends to relations between businesses, corporations and nation states.
Let’s look at an Example:
If Audi wouldn’t deliver the cars that people buy and instead just steal their money, then they wouldn’t be able to sell cars for much longer and would lose trust very fast. It is therefore in their own interest to be honest and continue their business.
Virtual trust in the digital world
Bitcoin and it’s corresponding Proof of Work are creating a game to mimic a similar mechanism in the digital world. A miner that has access to a certain amount of hash power would always be better off to secure the network than to attack it.
Bitcoin is equivalent to a society that agreed to a rule that whenever somebody wants to perform an economic activity, he first needs to find a company that is willing to dig a hole where he is going to put his receipt.
Since digging is a lucrative business, digging companies are competing to make bigger and bigger holes, which is starting to create problems for the environment.
Proof of Stake tries to solve these inefficiencies by paying rich people to confirm transactions instead. This is indeed more energy efficient but it comes with its own trade-offs and implications for the resulting system:
- The rich keep getting richer.
- If the rich ever decide to censor somebody or roll back history then we no longer have the digged holes to convince people of the truth.
Nobody would build a real-world society based on these principles for obvious reasons but when it comes to securing an open and permissionless DLT, proving access to a scarce resource is considered to be the best of the best.
But this kind of attack protection is not just very inconvenient and inefficient, but it also has several other problems: