Bitcoin Masterclass Session 4 with Craig Wright: How to Build Trusted P2P Economies

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Human users should trust the Bitcoin network, but not network nodes. Can they be sure that everything is still valid, even if they are offline for a while? The answer is yes, according to Bitcoin creator and nChain chief scientist Dr. Craig S. Wright during the fourth session of his Bitcoin Masterclass series.

Dr. Wright’s Bitcoin Masterclass was a two-day event in London. It was intended for developers, researchers, and anyone curious about how Bitcoin is supposed to work. The series from nChain, which also examines potential use cases that most have not yet considered, anticipates similar events in other cities outside of the UK in the future.

You can view recordings of all eight sessions (including this one) from here. The second day is available here.

Trust, Party-to-Party and SPV

Most people in the Bitcoin world have heard the phrase “double spend”. For the rest of us, Dr. Wright describes it as an electronic comparison to a bounced check, someone trying to spend the same money twice or spending money that isn’t available.

Traditionally, this problem is solved by the fact that the recipient has information about the payer. It can be a formal identification, links to an account or any rule to which the payer is responsible. How can this be done if transactions are digital, P2P/without banks or intermediaries, and may involve parties who do not know each other? Going back to the general theme of day one (confidentiality, privacy and anonymity), how do you maintain trust if the real identities are not known?

(Note that Dr. Wright defines “P2P” in bitcoin transactions here as “party-to-party” rather than “peer-to-peer”. term. awaits confirmations)

During this session, Dr. Wright also leads a 10-minute workshop where Masterclass participants brainstorm potential use cases for P2P transactions within groups. Groups can be families, business/business partners, or other organizations, and members can even be located in different countries. How do you keep it all fair and enforce the rules you set?

“We have a number of unused SigOp processes in Bitcoin,” says Dr. Wright. These include SigHash flags, which can be used in partial entry steps/multi-party transactions. SPV communications between nodes and users can confirm the validity of transactions almost instantly.

“SPV was designed to work between people, and even nodes can trust the network.”

The Bitcoin blockchain is perfect for maintaining trust

“We can build much more than the PKI infrastructure we have now,” he adds. On the one hand, a universal and trusted source of truth (i.e., blockchain) enables timestamped certificates, instant issuance and revocation, provable deletion, trusted networks, verifiable pseudonyms , certificate and authorization delays, and prompt reporting to act on security vulnerabilities . Blockchain records also allow for greater transparency and third-party auditing of records.

“We have to start thinking outside the box,” he says. Many use case ideas leave Bitcoin as a faster horse and cart, but still a horse and cart. If payments can be sent by anyone, anywhere, it may not even be necessary to have a payor/cashier relationship as in retail and services today. The greater the number of transactions required, the greater the amount of resources required and hence the overall costs within an economy.

These costs have led to today’s Internet model, where services are provided “for free”, but the user becomes the product. Bitcoin, by enabling P2P micropayments, would allow anyone to pay fractions of a penny for various services, ultimately leading to more competition and returning power and data ownership to users.

There are all kinds of shared transactions, ownerships, rentals, and other transactions. Many have not even been thought of yet. If you need inspiration, watching Dr. Wright’s Bitcoin Masterclass series will inspire you.

Watch: Bitcoin Masterclass Day 2: Private Identity, Identity Proofs, and Topic Reviews

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New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about the Bitcoinas originally envisioned by Satoshi Nakamoto and blockchain.

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