Satoshi Nakamoto Gave Us A Catalyst for Pure Capitalism

 

This article is provided for information and education purposes only and is not intended as investment advice. Readers are encouraged to do their own research and consult a professional before making any investment decisions.

 

 

 

Capitalism's distinction from economic ideologies is that anyone can enter a market, leverage their skill set and have an equal chance to climb the ladder based on their performance. A dictator, ruler, or union doesn't decide how much your work is worth; the free market does. Some proponents of economic ideologies often mislabel free market capitalism as just another ideology, but they couldn't be more wrong. Free market capitalism means that the economy is devoid of the regulatory environment required to enable groups or individuals to impose their theories on how an economy should be run through regulation, coercion, or force. 

Satoshi Nakamoto, pseudonymous founder of Bitcoin, launched a near perfect vessel to pass these free market ideals on to the next generation. In 2009 Satoshi came up with this brilliant invention called Bitcoin, that for a short period of time fostered true free market capitalism. Unfortunately, the entry barriers for ordinary people became way too high due to price inflation, rampant speculation, and manipulation such as the Mt. Gox trading bot scandal in 2013 that unduly altered Bitcoin's long-term trend line. We basically ended up right back where we started, with a massive centralization of wealth and power. 

The wealth inequalities we witness in the world of fiat currencies pale in comparison to the astronomical disparity on the Bitcoin blockchain. To top it off, Bitcoin's miners now primarily consist of a few multibillion-dollar operations who could collude to selectively decide which type of transactions they process. These miners have the potential to become the sole proprietors of Bitcoin. If that happens, they have the power to selectively reject transactions and change the network's rules.

 

The New Central Authority

The right to decide which transactions are added to the chain rests in the hands of very few mining groups and the nodes they operate on. The creates the potential for some miners to collude in a dishonest manner to control the entire ecosystem's future progression. Although these groups may collude to selectively reject transactions, enable users to spend outputs multiple times, or change network rules such as block reward, they cannot alter history of the chain, nor user balances.

Bitcoin's biggest problem is a lack of accountability and inability to provide the checks and balances needed to ensure a fair, proportional distribution of power in relation to an individual or group's capabilities and responsibilities that extend beyond consuming electricity. This centralization in power is exactly the environment that gives rise to crony capitalists, who in turn besmirch capitalism's good name and the inherent freedom it can provide, just to line their own pockets. 

It has also caused significant problems in the network's ability to reach consensus on new software upgrades. Take for example the block size debate, where large mining groups are perceived to profit more per transaction if block sizes are smaller, because users need to include larger fees with their transaction to ensure that it is processed in a timely fashion. Instead of scaling to meet consumer needs, the importance of Bitcoin's scalability is outweighed by the miners' demand for quick profit.

Bitcoin may have had the first mover advantage, but as Alan Yong recently told me, "They also have the first mover disadvantage. Bitcoin made unforeseeable mistakes which allowed their competitors to implement solutions that they will be unable to." Essentially Bitcoin has picked up so much baggage along the way that they are now unable to adapt rapidly while keeping their current supporters satisfied.

 

DNotes - A Digital Currency Improving Upon Satoshi's Pioneer Work

Launched in 2014, DNotes has not deviated even slightly from its path to becoming the global digital currency of the future that is inclusive to all. Every move DNotes makes is intended to not only improve upon the existing financial system and leverage blockchain technology to help us reach that end goal, but also to help protect our customers from exploitation. Ingrained at the core of DNotes' values is a great deal of respect for individual freedom, and an aversion to a heavy-handed style centralized financial control that favors certain groups with unfair advantages. DNotes has always been in favor of a balanced approach to regulation, that does not stifle innovation, but still protects investors from bad actors.

 

"Financial and economic freedom is the root of all freedoms."

                                                 -DNotes CTO Theodore Hauenstein

 

DNotes has taken many measures to ensure this centralization of power, and 'near supreme authority' in transaction validation cannot occur on the DNotes chain as it has with Bitcoin. DNotes 2.0 uses a proof of stake consensus mechanism that appoints validators at random for each block, instead of authority resting with those who control the most mining power, as would be the case for proof of work. This consensus mechanism is based upon some of the earlier work pioneered by industry peers, which was tailored for use in global commerce by DNotes.

DNotes would like to provide a high level of individual autonomy to its users, so they are able to pursue their goals and tailor services from the DNotes ecosystem to fit their needs (See: How Workers in the Most Common Professions Can Use DNotes). DNotes is purposefully attempting to lower entry barriers for investors by identifying areas of friction in traditional monetary systems as well as cryptocurrencies and is focused on implementing viable solutions. 

What DNotes has created is a model to enhance Satoshi's free market vision. DNotes has purposefully implemented many checks and balances that Satoshi overlooked, so future users will find it much more difficult to game the system for personal gain. Although no one investor, organization, or country owns DNotes, they can all work in symbiotic fashion to keep DNotes in check; ensuring everyone's best interests are represented. 

Author: Brandon Cheliak

Education Director for DNotes and co-founder of DNotesEDU

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