Putting Things in Order, AI and Perception: The Bitcoin Masterclasses #4 with Dr. Craig Wright

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We talked about using nLocktime in bitcoin payment channels, but how do we start ordering all these things? “We have to think a little differently than typical cypherpunk stuff,” Dr. Craig Wright replied.

Dr Wright gave a tutorial on “path-based sessions” to kick off day two of the latest series of Bitcoin Masterclasses in London last week.

“We don’t want to start thinking that all middlemen are bad,” says Dr. Wright. His Bitcoin white paper discusses eliminating the need for trusted third parties in small everyday payments, but other intermediaries still have points and purposes. This is especially true when building complex payments with locked in timelines, fees, and automation to consider.

We could have such an intermediary that “operates like a miner” but manages locked and timed transactions, ensuring that ordered transactions arrive on the network at the right time. Dr. Wright draws a diagram of a “very simple perceptron”, where different addresses are effectively inputs to a state machine.

“An address is not what people think. It’s a model. Bitcoin public keys are just one use for them, and Dr. Wright expected others to explore more. (Anecdote: the “1” at the beginning of many Bitcoin public keys is a reference to “pattern type one”.)

Do what you want before the transaction is finalized

We can have multiple potential inputs and multiple potential outputs, and each of them can be modified before the lock time expires and a finalized transaction is sent to the blockchain. A series of linked payment channels can communicate with each other in such a way as to determine the final (recorded) result. We can outsource many of these functions to the market, that is, to third-party vendors who develop optimized solutions.

“Other than chatbots, this is real utility for AI. It’s something that has real value,” Dr. Wright pointed out.

So we have these third-party intermediaries that determine which transactions to send to miners. How do you make sure they (and the miners) are all being honest with each other and processing the right payments? Dr. Wright also takes a brief trip into the world of incentives, saying that competition rules tend to promote honesty because everyone in an industry is incentivized to identify wrongdoing among their competitors in the hope to eliminate them from the competition.

An example he gives is a hypothetical world where all concert tickets or airplane seats could be symbolized. Unsold tickets just before an event or flight could be offered at auction. Discounted tickets may have special conditions or restrictions. Purchased tickets could even be “scalped” (ahem, resold legally) in a way that still pays a percentage royalty to the original seller. As long as the trades are finally settled, the parties to the trade are satisfied, and a profit can still be made, all is well.

Once all steps in a process are in a defined order/sequence, and there is a way to ensure that a transaction is settled, once all variables in a sequence are sorted; we can apply them to any area of ​​commerce. Even a global settlement system like SWIFT could be better if banks could account for every payment and the exact order in which it was made.

“You could say ‘it’s complex’ – and yes, it is. That’s why we have computers,” Dr. Wright said.

Like Bitcoin, the Masterclasses series is Dr. Wright brainstorming ideas and empowering smart people to devise innovative ways to make money from them. These courses are worth watching purely for inspiration, and there are plenty of suggestions for next big things in every session.

Watch: Bitcoin Masterclasses Workshop on Ideas for Implementing Bitcoin Blockchain in Enterprises

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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