A Peaceful Revolution

During the 1980’s, a genuine popular movement arose in Poland that ended up toppling the communist regime in that country. Although there were many anticommunist intellectuals writing and being read in Poland at the time, the spark that ignited the peaceful revolution that ended Soviet rule was lit not by the educated elite but by the working class: workers at the Lenin shipyard in Gdańsk launched a strike in 1980 that quickly spread to workers across industries and throughout the country. These workers formed the Interfactory Strike Committee, which drew up a list of 21 demands. Then, in a move reminiscent of the apocryphal story of Martin Luther nailing his 95 theses to the Church in Wittenberg, they wrote their demands on wooden boards and hung them from the gates of the Lenin shipyard.

The Gdańsk strike was triggered, predictably, by the government raising prices in a price-controlled economy while also denying wage increases. To make matters worse, Lenin shipyard managers had just fired a popular forklift operator, Anna Walentynowicz. Her co-workers believed this was political punishment for her union organizing. “What?” You might ask. “A communist government opposed to labor unions?” Yes—throughout the Soviet Bloc, only government-authorized labor unions affiliated with the ruling communist parties were permitted. One of the key demands of the Interfactory Strike Committee was the ability to form independent trade unions.

Of course, the image of workers striking against a communist government was terrible optics for the Polish government. In addition, as a Warsaw Pact country, Poland faced the continuous prospect of military intervention by the USSR. No one knew if or when Moscow would decide to “send in the tanks” like they had done in Hungary in 1956 and Czechoslovakia in 1968. Indeed, Brezhnev and the Politburo debated the idea in 1980. Eventually, they decided against it—in part because the First Secretary of the Polish United Workers’ Party (PZPR), Edward Gierek, feared a national bloodbath. The first round of strikes and protests in Gdańsk had attracted over 700,000 people, and, simply put, the Polish state feared Polish society. PZPR leadership opted to declare Martial Law instead. Thus began a decade of power struggles between the government and the people which culminated in the overthrow of the communist system in 1989.

The remarkable thing about the Polish transition to a market economy was how peaceful it was. That was largely a result of the overwhelming social consensus among Poles of all political orientations that government control of the economy needed to be dramatically lessened. The movement that emerged from the Interfactory Strike Committee was called “Solidarność”, or “Solidarity”, drawing on the trade union tradition of workers standing in solidarity with one another to collectively bargain for better wages and working conditions. Solidarity’s demand for independent trade unions was met: it did indeed become the first non-communist, non-government trade union in the Soviet Bloc.

When the strikes in Gdańsk first erupted, a marginally employed graphic designer, Jerzy Janiszewski, designed a logo for the union based on graffiti that he had seen scrawled on walls in the city. He shaped the letters of “Solidarity” to look like people standing together in a crowd, and he added a Polish flag to emphasize national unity. This logo “went viral”—it quickly began to be used nationwide as a symbol of victory over tyranny.

The success of the Solidarity trade union soon inspired non-working class Poles to “stand in solidarity with Solidarity”, and in this way it became a genuine mass movement. People from all corners of Polish society came together to oppose dictatorship and economic control: Whether left, right, or center, religious or non-religious, people—even many actual members of the PZPR—were so disillusioned and unhappy with “actually existing socialism” that, for a good decade, other social divisions started to matter far less than standing together in the fight for economic and political freedom. In 1989, the Solidarity trade union won the first partially free elections in the Soviet Bloc. This inaugurated the fall of communism in Poland and generated momentum for many similar movements in other Warsaw Pact countries.

Bitcoin as Solidarity

Today, I see many resonances between Solidarność and the growing social movement behind Bitcoin. Like Solidarity, Bitcoin crosscuts ideological and cultural divisions. Whether you are left, right, center, or unaligned; religious or not; a proponent of “tradition” or of rethinking traditional social roles; and regardless of the form of government you prefer (democracy, republicanism, monarchy, theocracy, party rule, etc.)—Bitcoin has appeal. This is because, regardless of what type of government or culture people prefer, they generally want to spend their own money whenever and however they choose. They also want that money to keep its value over time, so that they can save it profitably for themselves and for future generations.

For decades, governments around the world have been chipping away at both of these human desires: they insist on controlling how people spend their money while devaluing it at the same time. This destruction of the savings and economic freedom of entire populations can only continue for so long before people come together to say, “enough.” That is why Bitcoin can be seen as a much-needed monetary reformation: the separation of money and state.

Like Solidarity, Bitcoin is a grassroots movement emerging from below. It has a name, a logo, and open source code that are used worldwide but are not owned by anyone. While the mainstream media pays a lot of attention to “Bitcoin billionaires”, the vast majority of Bitcoin owners are ordinary people—mostly working class—who see in it hope for a better future: A future where the fruits of their labor, their life savings, are not frittered away by irresponsible governments engaged in schemes to devalue currency and control economic life. More symbolically, the 21 demands of the Interfactory Strike Committee mirror the absolute scarcity of the only 21 million bitcoin that will ever be in existence, a number hard coded into the Bitcoin protocol.

Noah’s Ark: Surviving the Flood of Money

During the rise of Solidarity, a group of poets and musicians were touring Poland, performing songs to remind people that a better life was possible. Their names were Jacek Kaczmarski, Przemysław Gintrowski, and Zbigniew Łapiński. They recorded many “protest songs” whose messages had to be carefully worded and concealed to avoid being censored. However, despite their use of poetic metaphors and allusions to history, literature, art, and the Bible, everyone understood what they were really talking about. Their songs enjoyed immense popularity throughout Poland.

I grew up listening to the songs of these three troubadours. My parents, like many in their generation, were active in the Solidarity movement and brought that ethic with them when they immigrated to the United States, where I was born. Some of the trio’s songs have particular resonance for our own historical moment and for the Bitcoin movement. In that spirit, I wanted to share with you one of Kaczmarski, Gintrowski, and Łapinski’s great songs, “Noah’s Ark”. It references the Biblical story of Noah, who survived a massive, months-long flood by building an Ark.

One way to interpret the “flood” the trio sings about in “Noah’s Ark” is as the “flood” of currency that accompanies periods of hyperinflation. Governments that are politically in trouble or collapsing always face severe economic problems, and they often print dramatic amounts of money in order to “boost economic activity” within their borders. This tends to backfire, however, as the value of the money plummets and people become increasingly reluctant to use it. This only compounds the political and economic woes of the regime, accelerating its demise. For this reason, periods of hyperinflation tend to accompany turnovers of political regimes. When I first visited Poland in 1990, for example, it was in the middle of a hyperinflation accompanying the transition between a communist and a capitalist mode of political economy. The national currency had to be entirely re-based and reissued in order to restore public confidence in it.

Those who have survived “floods” of hyperinflation around the world know how devastating they can be. Millions of Polish people lost their entire life savings as a result of the collapse of a politically and economically non-viable system of government. But Kaczmarski, Gintrowski, and Łapiński’s song reminds us that the deluge is survivable—if we have planned ahead and if we believe in our own power, as individuals and as a community, to navigate the storms.

Please enjoy their music and lyrics, which I have translated into English below.

This is a guest post by Natalie Smolenski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Bitcoin’s value proposition relies on its ability to resist any type of censorship. Without that feature, Bitcoin loses its power to challenge and resist any authority that wants to subjugate Bitcoin to the same rules that apply in the traditional world. With this in mind, it’s paramount that bitcoin has no central points of failure whatsoever. If there is a gatekeeper, there is a vulnerability. If there is a vulnerability, it will be exploited. And at that point, Bitcoin as an exercise of free and decentralized digital money simply stops.

To ensure the network’s decentralization, robustness and anti-fragility, we need to maintain the very components that assure us, through time-tested battles, of these very properties. No entity in the world can feel like attacking Bitcoin will be a successful endevour. The best way to do that is to spread Bitcoin as far as possible to all corners of the globe by running nodes. Just like a monetary virus. The more it spreads, the higher the chance it succeeds.

Satoshi mentioned several times that all the former electronic money projects failed due to their centralization features. A monopoly on the supply of money is a power that governments and the financial system will not let go easily. To make sure that Bitcoin will not be stopped by any bad actor, it’s our duty to ensure that Bitcoin’s decentralization increases all the time. Forever.

A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.

Bitcoin open source implementation of P2P currency

https://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currencyhttps://www.indianapolismonthly.com/news-and-opinion/business/mad-money/

Looking thoroughly at what Bitcoin accomplished so far and where it is right now as a global network, it’s a fact that the network is very decentralized. Nevertheless, just like one can argue that bitcoin´s purchasing power doesn’t have a top, bitcoin’s decentralization level also doesn’t have a top. The more, the better! Beyond a certain level of decentralization, any attack on Bitcoin is not only pointless for the attacker, but also detrimental, since the attacker’s failure ends reinforcing bitcoin’s capability to resist any attack, strengthening the network in the process, while diminishing the perceived success of any attempt of attacking Bitcoin. Anti-fragility in its purest form!

Hydra – mythological figure from the Book of Revelations. Every time one of the heads got chopped off, the Hydra would regrow two heads. Every time the Hydra got attacked, the Hydra grew stronger. The Hydra is anti-fragile. Bitcoin is a monetary Hydra.

What’s the level of decentralization that assures that any potential attacker is completely disincentivized from attacking the network? No one knows for sure. We can only estimate it. Nonetheless, the best strategy is to just decentralize bitcoin as much as we possibly can. And the most important tool that we have at our disposal is running as many nodes as possible all around the world.

Nodes fulfill one of the most, if not the most important role in Bitcoin. By following the protocol rules, they verify and validate all the transactions and all the blocks that get propagated throughout the network. They also relay all this information to other nodes and store all blocks published by miners. If a transaction, block or other piece of information violates the consensus rules of the protocol, nodes automatically reject it. Nodes are essentially the referees of the bitcoin game, making sure that everyone plays fair like they are supposed to.

Bitcoin nodes working

If more nodes join the network, more referees will be verifying everything that happens in Bitcoin. If more nodes join the network, there will be more copies of the entire blockchain. If more nodes join the network, more assurances there will be that every actor behaves the way it should. Every time a node joins the bitcoin network, anyone that wants to attack it will have to chop off an extra head in order to kill this monetary Hydra called Bitcoin. If you don’t run a node yet, it’s time to do your part.

Unfortunately, and unknowingly to the majority of bitcoin users, the vast majority of miners do not run a node nowadays. Providing valid shares to the pool operator is all that’s necessary to get paid for their work. It’s commonly said that miners are being paid by the network to protect it against all adversarial attacks by building a wall of energy so dense that it’s impossible to penetrate it. However, if we want to continue with this analogy, what we observe is that miners are employees of the pools, not of the bitcoin network. There is no direct connection between miners and the network. Miners are effectively selling computing power in the form of hashrate to the pools. The responsibility of picking the transactions that go in the block, creating the blocks themselves, propagating said blocks found throughout the network and receiving all the necessary information gets delegated to the pools. This effectively means that Pools are the ones censoring, or not, the network and thus undermining Satoshi’s original vision of an open and permissionless protocol for value transfer.

Furthermore, if the level of decentralization hadn’t been reduced enough just by that, there are proxy pools. Proxy pools are basically a wolf maskerading in sheep’s clothing. Same pool, but a different brand. This means that if some big Pool A has 20% of the Hashrate, but 3 smaller Pools B, C and D have 5% each, effectively Pool A controls 35% of the hashrate. That would be enough to do a Selfish Mining attack and harm the network. Thus, what we end up with is just a couple of “main” pool nodes deciding which transactions make it to the blockchain. This situation doesn’t look very decentralized. That’s because it isn’t. Thankfully, there is a way to fix this. It’s called Stratum V2.

Stratum V2 is a new mining protocol that hopes to bring a series of new features that make Bitcoin mining more secure, more efficient and of course, more decentralized. Its reference open-source implementation was developed by an independent, community-run of more than 15 developers over the past three years, battle-tested with more than 30 000 downstreams. With this new protocol, Bitcoin’s decentralization can reach new heights. How, you may ask? By giving miners the ability to create their own block templates and pick the transactions that get included in blocks. To have this capacity, miners must run a node. More nodes means a more decentralized and robust network. Once all miners are the ones building blocks rather than pools, we can finally witness Bitcoin taking another step towards invincible decentralization.

DEMAND pool is the first mining pool to implement the reference implementation of the Stratum V2 protocol. Our mission is to first and foremost, contribute to the network’s decentralization and to end the threat of censorship on Bitcoin. If you’re a miner and want to be in the drivers seat, consider joining our pool. Lifetime special conditions and other features will be available for founding members of our pool.

It’s time to improve Bitcoin’s decentralization. Are you coming? 

This is a guest post by Francisco Monteiro. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.