bitcoin incorporated

[grarpamp]

A fine article, its tactics apparent in so many things in world...

On Thu, Jun 8, 2017 at 5:38 PM, juan <juan.g71 at gmail.com> wrote:
>         http://falkvinge.net/2017/05/01/blockstream-patents-segwit-makes-pieces-fall-place/

Blockstream having patents in Segwit makes all the weird pieces of the
last three years fall perfectly into place

Activism  Bitcoin  Patent Monopolies Posted on May 1, 2017 • Updated
May 1, 2017 • by Rick Falkvinge 7260  53

Based on Blockstream’s behavior in the Bitcoin community, I have
become absolutely certain that Segwit contains patents that
Blockstream and/or their owners have planned to use offensively. I
base this not on having read the actual patents, for they can be kept
secret for quite some time; I base this on observing Blockstream’s
behavior, and having seen the exact same behavior many times before in
the past 20 years from entities that all went bankrupt.

In a previous part of my career, I was making telecom standards. This
meant meeting with lots of representatives from other companies
somewhere on the globe once a month and negotiating what would go into
the standard that we would all later follow.

I was a representative of Microsoft. I would meet with people from
Nokia, Ericsson, AT&T, and many other corporate names you’d recognize
instantly, in small groups to negotiate standards going forward.

One thing that was quite clear in these negotiations was that
everybody was trying to get as much as possible of their own patent
portfolio into the industry standard, while still trying to maintain a
façade of arguing purely on technical merits. Some were good at it.
Some were not very good at it at all.

One of the dead-sure telltale signs of the latter was that somebody
would argue that feature X should use mechanism Y (where they had
undisclosed patent encumbrance) based on a technical argument that
made no sense. When us technical experts in the room pointed out how
the argument made no sense, they would repeat that feature X should
absolutely use mechanism Y, but now based on a completely new
rationale, which didn’t make any sense either.

The real reason they were pushing so hard for mechanism Y, of course,
was that they had patents covering mechanism Y and wanted their
patented technology to go into the industry standard, but they were
unable to make a coherent argument that withstood technical scrutiny
for why it was the preferable solution at hand, with or without such
encumbrance.

In other word, classic goalpost moving.

As a technical team made up of many people from different companies,
there would come a time when our patience ran out with assuming good
faith for the fake technical rationale presented to get something
patented into the standard, as we knew it was made up on the spot but
sort of had to play along — but only up to a point, if the party
losing the technical argument didn’t give in, didn’t play their part
of the game we all knew was happening.

But there’s more to Blockstream’s behavior than just moving technical goalposts.

As I later came into politics, I saw this pattern much clearer – it
was in basically every decision in politics. We called it “high
reasons and low reasons”. The “high”, or “noble”, reason would be the
one you presented to the world for wanting X as policy. The “low”
reason, meanwhile, was the one that made you give a damn in the first
place about it. These were often not connected at all.

You could spot these “high-vs-low reason” conflicts in the tiny
details. For example, somebody would argue for new invasive
surveillance to combat terrorism, or so they would say. And then you
read a little closer, and the bill text actually says “terrorism and
other crimes“, an important part which nobody paid attention to. Two
years after passing, it turns out that the new surveillance powers
were used 98% to fight ordinary teenagers sharing music and movies
with each other, and that the original bill sponsor was heavily in bed
with the copyright industry.

So the exact same pattern of having one overt and one covert reason
was present in politics as well, unsurprisingly. But there’s also
another pattern here, one that we shall return to: “We want this
feature because of X, or because of any other reason”.

But first, let’s compress the last three years of dialogue between
Blockstream and the non-Blockstream bitcoin community:

[BS] We’re developing Lightning as a Layer-2 solution! It will require
some really cool additional features!
[com] Ok, sounds good, but we need to scale on-chain soon too.
[BS] We’ve come up with this Segwit package to enable the Lightning
Network. It’s kind of a hack, but it solves malleability and quadratic
hashing. It has a small scaling bonus as well, but it’s not really
intended as a scaling solution, so we don’t like it being talked of as
such.
[com] Sure, let’s do that and also increase the blocksize limit.
[BS] We hear that you want to increase the block size.
[com] Yes. A 20 megabyte limit would be appropriate at this time.
[BS] We propose two megabytes, for a later increase to four and eight.
[com] That’s ridiculous, but alright, as long as we’re scaling exponentially.
[BS] Actually, we changed our mind. We’re not increasing the blocksize
limit at all.
[com] Fine, we’ll all switch to Bitcoin Classic instead.
[BS] Hello Miners! Will you sign this agreement to only run Core
software in exchange for us promising a two-megabyte non-witness-data
hardfork?
[miners] Well, maybe, but only if the CEO of Blockstream signs.
[Adam] *signs as CEO of Blockstream*
[miners] Okay. Let’s see how much honor you have.
[Adam] *revokes signature immediately to sign as “Individual”*
[miners] That’s dishonorable, but we’re not going to be dishonorable
just because you are.
[BS] Actually, we changed our mind, we’re not going to deliver a
two-megabyte hardfork to you either.
[com] Looking more closely at Segwit, it’s a really ugly hack. It’s
dead in the water. Give it up.
[BS] Segwit will get 95% support! We have talked to ALL the best companies!
[com] There is already 20% in opposition to Segwit. It’s impossible
for it to achieve 95%.
[BS] Segwit is THE SCALING solution! It is an ACTUAL blocksize increase!
[com] We need a compromise to end this stalemate.
[BS] Segwit WAS and IS the compromise! There must be no blocksize
limit increase! Segwit is the blocksize increase!

This is just a short excerpt. I could go on and on, showing how
Blockstream said that node count was completely negligible when
Bitcoin Classic nodes started to pick up and how hashrate was the only
valid measure, and how Blockstream is now talking – no, yelling – the
exact opposite, when Bitcoin Unlimited is at 40%+ of hashrate.

This pattern is utterly typical for somebody hiding encumbrance in
what they’re trying to achieve – for if Segwit locks in, it’s in
bitcoin for eternity because of the way the chain is permanent,
whether those parts of the chain are used by a particular actor or
not.

There’s even more to it. It’s also typical for an actor who’s
deflecting like this to try to invoke external enemies. Warhawks in
governments have done the same over and over when they want to go to
war: be aggressive about a narrative, call out anybody who challenges
the narrative as a traitor and a saboteur, and beat the drums of war.
It’s tribal, but it works. In this case, Blockstream have singled out
two individuals as “enemies”, and people who want to be part of the
community are encouraged to be aggressive against them. It’s
practically straight out of scenes of the movie 1984.

All to get patents into bitcoin, regardless of whether you burn it and
its community to the ground in the process.

That’s the only way their behavior makes sense, and it makes utter and
complete sense in that way. I want to emphasize again that I have not
read any of the Blockstream patent applications, and it would be
pointless to do so as they can be kept secret for something like 18
months, so I wouldn’t have access to the full set anyway. But based on
Blockstream’s behavior, I can say with dead certainty that I’ve seen
this exact behavior many times in the past, and it’s always when
somebody has a dual set of reasons – one for presentation and palate
and another that drives the actual course of action.

With that said, Blockstream has something called a “Defensive Patent
Pledge”. It’s a piece of legal text that basically says that they will
only use their patents for defensive action, or for any other action.

Did you get that last part?

That’s a construction which is eerily similar to “terrorism and other
crimes”, where that “and other crimes” creates a superset of
“terrorism”, and therefore even makes the first part completely
superfluous.

Politican says: “Terrorism and other crimes.”
The public hears: “Terrorism.”
What it really means: “Any crime including jaywalking.”

The Blockstream patent pledge has exactly this pattern: Blockstream
will only use their patents defensively, or in any other way that
Blockstream sees fitting.

Blockstream says: “For defense only, or any other reason.”
The public hears: “For defense only.”
What it really means: “For any reason whatsoever.”

Let’s assume good faith here for a moment, and that Greg Maxwell and
Adam Back of Blockstream really don’t have any intention to use
patents offensively, and that they’re underwriting the patent pledge
with all their personal credibility.

It’s still not worth anything.

In the event that Blockstream goes bankrupt, all the assets –
including these patents – will go to a liquidator, whose job it is to
make the most money out of the assets on the table, and they are not
bound by any promise that the pre-bankruptcy management gave.

Moreover, the owners of Blockstream may — and I predict will — replace
the management, in which case the personal promises from the
individuals that have been replaced have no weight whatsoever on the
new management. If a company makes a statement to its intentions, it
is also free to make the opposite statement at a future date, and is
likely to do so when other people are speaking for the company.

This leads us to ask who the owners of Blockstream are: who would have
something to gain from pulling the owner card and replacing such a
management?

Ah.

The owners of Blockstream are the classic financial institutions,
specifically AXA, that have everything to lose from cryptocurrency
gaining ground.

And they have bought (“invested in”) a company, which has an
opportunity to get patents into the bitcoin blockchain, thereby being
able to either outright ban people from using it, or collect a heavy
rent from anybody and everybody who uses it.

The conclusion is unescapable here: Blockstream’s constant goalpost
shifting has had the underlying goal to have Blockstream’s owners
effectively own bitcoin through patent encumbrance.

As horrifying as that statement is, it’s the only way – the only way –
that the actions of the past three years make perfect sense.