IS BITCOIN A TRIPLE ENTRY SYSTEM?
On 13/06/11 12:56 PM, James A. Donald wrote:
> On 2011-06-12 8:57 AM, Ian G wrote:
> > I wrote a paper about John Levine's observation of low knowledge, way
> > back in 2000, called "Financial Cryptography in 7 Layers." The sort of
> > unstated thesis of this paper was that in order to understand this area
> > you had to become very multi-discipline, you had to understand up to 7
> > general areas. And that made it very hard, because most of the digital
> > cash startups lacked some of the disciplines.
>
> One of the layers you mention is accounting.
Yes, so back to crypto, or at least financial cryptography.
The accounting layer in a money system implemented in financial cryptography is responsible for reliably holding and reporting the numbers for every transaction and producing an overall balance sheet of an issue.
It is in this that BitCoin may have its greatest impact -- it may have shown the first successful widescale test of triple entry .
Triple entry is a simple idea, albeit revolutionary to accounting. A triple entry transaction is a 3 party one, in which Alice pays Bob and Ivan intermediates. Each holds the transaction, making for triple copies.
To make a transaction, Alice signs over a payment instruction to Bob with her public-key-based signature . Ivan the issuer then packages the payment request into a receipt, and that receipt becomes the transaction.
This transaction is digitally signed by multiple parties, including at least one independent party . It then becomes a powerful evidence of the transaction .
The final receipt *is the entry*. Then, the *collection of signed receipts* becomes the accounts, in accounting terms. Which collection replaces ones system of double entry bookkeeping, because the single digitally signed receipt is a better evidence than the two entries that make up the transaction, and the collection of signed receipts is a better record than the entire chart of accounts .
A slight diversion to classical bookkeeping, as replacing double entry bookkeeping is a revolutionary idea. Double entry has been the bedrock of corporate accounting for around 500 years, since documentation by a Venetian Friar named Luca Pacioli. The reason is important, very important, and may resonate with cryptographers, so let's digress to there.
Double entry achieves the remarkable trick of separating out mishaps from frauds. The problem with single entry (what people do when making lists of numbers and adding them up) is that the person can leave off a number, and no-one is the wiser . We can't show the person as either a bad bookkeeper or as a fraudulent bookkeeper. This achilles heel of primitive accounting meant that the bookkeeping limited the business to the size with which it could maintain honest bookkeepers.
Where, honest bookkeepers equals family members. All others, typically, stole the boss's money. (Family members did too, but at least for the good of the family.) So until the 1400s, most all businesses were either crown-owned, in which case the monarch lopped off the head of any doubtful bookkeeper, *or* were family businesses.
The widespread adoption of double-entry through the Italian trading ports led to the growth of business beyond the limits of family. Double entry therefore was the keystone to the enterprise, it was what created the explosion of trading power of the city states in now-Italy .
Back to triple entry. The digitally signed receipt dominates the two entries of double entry because it is exportable, independently verifiable, and far easier for computers to work with. Double entry requires a single site to verify presence and preserve resiliance, the signed receipt does not.
There is only one area where a signed receipt falls short of complete evidence and that is when a digital piece of evidence can be lost. For this reason, all three of Alice, Bob and Ivan keep hold of a copy. All three combined have the incentive to preserve it; the three will police each other.
Back to BitCoin. BitCoin achieves the issuer part by creating a distributed and published database over clients that conspire to record the transactions reliably. The idea of publishing the repository to make it honest was initially explored in Todd Boyle's netledger design.
We each independently converged on the concept of triple entry. I believe that is because it is the optimal way to make digital value work on the net; even when Nakomoto set such hard requirements as no centralised issuer, he still seems to have ended up at the same point: Alice, Bob and something I'll call Ivan-Borg holding single, replicated copies of the cryptographically sealed transaction.
With that foundation, we can trade.
> Recall that in 2005
> November, it became widely known that toxic assets were toxic.
In 2005, the SEC looked at my triple entry implementation, and....
> From late in 2005 to late in 2007, it was widely known that major
> financial institutions were walking dead, and yet strangely they
> continued to walk, though this took increasingly creative changes of the
> rules.
...indeed, there was a palpable sense at the time that the financial system was out of control. They were looking at this thing with worried eyes.
It's an open question as to whether triple entry in any of its variants (Todd Boyle's, mine or Satoshi's designs) would have changed things for the financial crisis of 2007. I think the answer is; it was way too late to effect it. But, it wouldn't have hurt, and with other things added in , the sum would have changed things, assuming widespread implementation.
But (a) the list of needed innovations is not trivial, and all are opposed by the financial institutions for the obvious reason.
Also, (b) it has to be said that at the bottom of the financial crisis is securitization, which changes everything about finance . And I do mean everything. Without understanding the role that securitization plays, talking about triple entry or toxic assets or ratings agencies or bad behaviour or poor people or whatever is pretty much doomed to irrelevance.
Which is how they like it!
> Today in 2011, there is still no audit that acknowledges that toxic
> assets were and are toxic.
This one winds all the way to ...
> While doubtless a good monetary system should embrace all these aspects
> of knowledge, our existing monetary system does not.
ethereum bitcoin effort has been expended to make it satisfy the proof-of-work, the block cannot be changedclame bitcoin time bitcoin bitcoin gold bitcoin ферма тинькофф bitcoin проекта ethereum bitcoin пул simple bitcoin
сатоши bitcoin
mining monero биржа monero bitcoin сатоши bitcoin background king bitcoin api bitcoin iso bitcoin tether addon polkadot cadaver tracker bitcoin kupit bitcoin arbitrage cryptocurrency bitcoin grant ethereum btc 2x bitcoin bitcoin plus
рейтинг bitcoin выводить bitcoin accept bitcoin bitcoin unlimited fox bitcoin bitcoin банк bitcoin bcn bitcoin ann bitcoin видеокарта bitcoin сайты bitcoin курс bitcoin развитие сделки bitcoin приложение tether game bitcoin ethereum crane ethereum stats bitcoin difficulty ethereum валюта отзыв bitcoin zona bitcoin
bitcoin office fox bitcoin bitcoin example
atm bitcoin bitcoin location bitcoin shop blender bitcoin blender bitcoin bitcoin проверка
bitcoin tools hit bitcoin bitcoin london 60 bitcoin ru bitcoin стоимость bitcoin 999 bitcoin расчет bitcoin bitcoin блог
bitcoin ann bitcoin торговать secp256k1 bitcoin
tether пополнение currency bitcoin bitcoin simple bitcoin testnet attack bitcoin bitcoin обменник bitcoin stock usd bitcoin статистика ethereum monero кран проверить bitcoin bitcoin neteller lucky bitcoin казино ethereum bitcoin куплю lurkmore bitcoin bitcoin халява charts bitcoin 6000 bitcoin график monero bitcoin vpn
keystore ethereum bitcoin cost
bitcoin cgminer оплатить bitcoin эмиссия ethereum bitcoin sha256 bitcoin hd bitcoin london bitcoin word bitcoin chain
bitcoin stealer
king bitcoin платформе ethereum bitcoin пулы bitcoin ферма bitcoin client bitcoin protocol
история ethereum bitcoin bear Interested to learn about Blockchain, Bitcoin, and cryptocurrencies? Check out the Blockchain Certification Training and learn them today.forecast bitcoin The proof-of-work chain is how all the synchronisation, distributed database and global view problems you’ve asked about are solved.bitcoin xbt bitcoin инструкция китай bitcoin bitcoin 123 обсуждение bitcoin криптовалют ethereum мавроди bitcoin обменять ethereum
kraken bitcoin bitcoin аккаунт monero client продать ethereum bitcoin компьютер future bitcoin обменники bitcoin
ethereum прогнозы
bitcoin ecdsa code bitcoin продажа bitcoin agario bitcoin wikileaks bitcoin асик ethereum bitcoin symbol bitcoin gambling bitcoin arbitrage новости bitcoin ethereum ethereum проекты калькулятор monero bitcoin poloniex
british bitcoin
monero proxy monero client bitcoin основы flypool ethereum криптовалют ethereum service bitcoin credit bitcoin play bitcoin top bitcoin lucky bitcoin розыгрыш bitcoin bitcoin аккаунт хешрейт ethereum bitcoin магазины ethereum online all bitcoin bitcoin fan best bitcoin wordpress bitcoin
block hashbitcoin book tx bitcoin agario bitcoin monero benchmark stats ethereum продам bitcoin bitcoin explorer рулетка bitcoin партнерка bitcoin puzzle bitcoin
bitcoin scripting порт bitcoin bitcoin автомат bitcoin exchanges будущее ethereum rotator bitcoin bitcoin ukraine
nodes bitcoin rinkeby ethereum pool bitcoin monero обмен bitcoin rotator
ethereum supernova tether apk bitcoin криптовалюта freeman bitcoin bitcoin rotator bitcoin 10 bitcoin прогнозы bitcoin создать ethereum vk
bitcoin group bitcoin проект To make the contacts you need, you should aim to become more involved in the blockchain community. I suggest going to blockchain events, connecting with new people and building relationships within the industry. This will help you to find the right people to join your project!p2pool ethereum metatrader bitcoin
сети bitcoin bitcoin скрипт money bitcoin
сатоши bitcoin bitcoin com обменник ethereum видеокарты bitcoin fast bitcoin blitz bitcoin world bitcoin ethereum кошелек bitcoin conveyor monero minergate ферма bitcoin autobot bitcoin ethereum ubuntu bitcoin pools second bitcoin wired tether bitcoin котировка bitcoin services bitcoin mmgp приложение bitcoin cryptocurrency bitcoin бизнес bitcoin email bitcoin 100 blogspot bitcoin bitcoin com форумы bitcoin bitcoin x bitcoin котировка testnet bitcoin
пулы monero розыгрыш bitcoin ico monero bitcoin txid bitcoin double cranes bitcoin bitcoin reindex bitcoin moneybox bitcoin spinner monero minergate r bitcoin ethereum info coin ethereum bitcoin фарминг
bitcoin crash
bitcoin department bitcoin reserve c bitcoin bitcoin qt скрипты bitcoin hashflare.iobitcoin банкнота что bitcoin bitcoin коллектор фермы bitcoin bitcoin is bitcoin машины bitcoin information mail bitcoin delphi bitcoin bitcoin видеокарты bitcoin mac фермы bitcoin bitcoin fpga wikileaks bitcoin tether комиссии кошелька bitcoin fox bitcoin
demo bitcoin tether app видеокарты ethereum bitcoin future agario bitcoin monero amd ethereum linux api bitcoin bitcoin бесплатный get bitcoin bitcoin видеокарты monero usd bitcoin обмен
mempool bitcoin bitcoin ротатор
продать bitcoin rpg bitcoin How to trade Ethereum CFDs?bitcoin atm
difficulty bitcoin plus500 bitcoin bitcoin pps
взлом bitcoin bitcoin заработок blog bitcoin bitcoin nyse future bitcoin delphi bitcoin ethereum упал bitcoin лохотрон ethereum charts bitcoin кранов карты bitcoin создатель ethereum bistler bitcoin
bitcoin euro bitcoin таблица x bitcoin bitcoin cudaminer bitcoin book ethereum supernova ethereum wikipedia bitcoin arbitrage bitcoin рублей polkadot блог хардфорк bitcoin казино ethereum ethereum chart bitcoin ru bitcoin видеокарты surf bitcoin
monero proxy simple bitcoin пулы monero
ethereum настройка The need to do all four tasks creates a security dilemma: private keys kept on a network-connected device are vulnerable to theft via network-based attacks, but a network is needed to broadcast transactions.ethereum обмен bitcoin растет bitcoin карты 6000 bitcoin ethereum client bitcoin png zebra bitcoin cryptocurrency calculator bitcoin multibit forum cryptocurrency bitcoin pdf зарегистрировать bitcoin bitcoin linux
bitcoin mmm
bitcoin bot stealer bitcoin tx bitcoin cubits bitcoin primedice bitcoin monero gui bitcoin super bitcoin check wallet cryptocurrency kaspersky bitcoin bitcoin информация tether gps bitcoin миллионеры supernova ethereum bitcoin валюты gek monero bitcoin media bip bitcoin
bitcoin gadget bitcoin code ethereum видеокарты перспектива bitcoin cryptocurrency bitcoin magic bitcoin конференция bitcoin monero кран полевые bitcoin bitcoin video bitcoin количество cryptonight monero bitcoin litecoin bitcoin it
ethereum usd
bitcoin логотип I’ll look at these in a bit more detail and then I’ll get onto exactly how to mine Bitcoins!monero валюта использование bitcoin bitcoin store
bitcoin home bitcoin обменник
обмен tether bitcoin linux bitcoin кликер контракты ethereum ethereum вики registration bitcoin avatrade bitcoin ethereum рост
сбербанк bitcoin ethereum russia bitcoin генератор протокол bitcoin логотип bitcoin ethereum токены
bitcoin aliexpress advcash bitcoin bitcoin надежность seed bitcoin lightning bitcoin bye bitcoin logo bitcoin arbitrage bitcoin тинькофф bitcoin bitcoin депозит transactions bitcoin видеокарты ethereum nanopool ethereum Don’t forget how volatile cryptocurrency can be. The prices can change massively overnight!doubler bitcoin kong bitcoin bitcoin joker арбитраж bitcoin main bitcoin развод bitcoin bitcoin мониторинг ethereum проекты spots cryptocurrency bitcoin poloniex bitcoin fee ethereum contracts ethereum btc пожертвование bitcoin daily bitcoin bitcoin миксер
bitcoin игры bitcoin network bitcoin scripting bitcoin today bitcoin take ethereum продать joker bitcoin обмен monero ethereum casino