This article was first published on Dr. Craig Wright’s blog, and we republished with permission from the author. Read Part 1, Part 2, and Part 3.
Rajasekaran et al. (2022) demonstrate the problem when researchers focus on papers published within the last 3 to 5 years, compared to incorporating an analysis of terminology and data from earlier times. In doing so, the authors take material built upon blog posts and papers that have not been peer-reviewed and integrate them into an analysis of blockchain technologies while ignoring earlier research into digital payment and peer-to-peer network systems. For example, the structure of Bitcoin follows a small-world network design (Watts & Strogatz, 1998). Such a structure is now well known and documented, but is depreciated based on the age of the paper and when referencing alternative descriptions of decentralization, based on alternative descriptions of the word, such as those from Marx and which lie outside of network science.
Further, Slabykh (2019) demonstrates that existing legal frameworks are robust enough to cover peer-to-peer networks. While the author explores the concept of anti-piracy and copyright, the underlying premise of peer-to-peer networks being within the reach of law and controllable still applies. Many authors within the digital currency or digital cash sphere have failed to comprehend that such cross-field action occurs in legal cases, and do not understand that if peer-to-peer networks in copyright cases can be stopped, legal action may occur against peer-to-peer digital cash systems.
Annotated Bibliography
Bader, D. A., & Madduri, K. (2006). Parallel algorithms for evaluating centrality indices in real-world networks. 2006 International Conference on Parallel Processing (ICPP’06), 539–550.
Han, Y., Xu, D., Gao, J., & Zhu, L. (2022). Using Blockchains for Censorship-Resistant Bootstrapping in Anonymity Networks. In C. Alcaraz, L. Chen, S. Li, & P. Samarati (Eds.), Information and Communications Security (pp. 240–260). Springer International Publishing. https://doi.org/10.1007/978-3-031-15777-6_14
Hogberg, S. K. (2006). The Search for Intent-Based Doctrines of Secondary Liability in Copyright Law Note. Columbia Law Review, 106(4), 909–958.
Rajasekaran, A. S., Azees, M., & Al-Turjman, F. (2022). A comprehensive survey on blockchain technology. Sustainable Energy Technologies and Assessments, 52, 102039. https://doi.org/10.1016/j.seta.2022.102039
Slabykh, I. (2019). The New Approaches to Digital Anti-Piracy in the Entertainment Industry. UIC Review of Intellectual Property Law, 19(1), [i]-99.
Watts, D. J., & Strogatz, S. H. (1998). Collective dynamics of ‘small-world’networks. Nature, 393(6684), 440–442.
Rajasekaran et al. (2022, p. 5) contend that a “blockchain may be classified into two categories based on access controls, such as permission-less and permissioned blockchain.” While such a definition is common in the blockchain industry, its use is introduced uncritically. Most importantly, the security of any blockchain is based upon the public dissemination of block headers and not on cryptographic systems based on encryption, as many commonly believe. With such errors, the author has uncritically introduced a series of terms based on an analysis of common phrases and terms used in blogs and cyberpunk literature.
For instance, the author documents a “decentralised peer-to-peer network” (2022, p. 5) as a mesh-based system. Yet, such a structure is not the general structure of any peer-to-peer network and differs significantly from the network design of Bitcoin and other blockchain systems. Bitcoin nodes form a small-world network. This network type brings with it a combination of high centrality through creating what is referenced as a giant node virtual structure and exhibiting high resilience and routing capability because of the densely connected node structure.
The author argues that Bitcoin forms a voting structure. Yet, such a description is again erroneous and conflates the competitive consensus process used by a limited number of Bitcoin nodes with a wider decision-making process. Overall, the study demonstrates the lack of understanding and critical analysis in the academic literature associated with blockchain networks. Nevertheless, the methodology and research are useful in demonstrating the perceived structures of Bitcoin and how even academic researchers ignore the underlying structure of the system and base their analysis on the unexamined comments of industry pundits.
Slabykh, I. (2019). The New Approaches to Digital Anti-Piracy in the Entertainment Industry. UIC Review of Intellectual Property Law, 19(1), [i]-99.
Slabykh (2019) has explored the P2P copyright cases of LimeWire and Grokster and how they are continuing to change digital anti-piracy within the entertainment industry. While the paper does not directly address the concept of decentralization in blockchain networks, the author documents the legal cases that have been made against peer-to-peer filesharing applications and the approach taken by the court in dealing with associated breaches. While the term decentralization has been used in arguments presenting Bitcoin as “censorship resistant” (Han et al., 2022), they have overlooked the previous approach courts took when dealing with peer-to-peer systems.
Importantly, the approach used to protect copyright and associated intellectual property rights may be utilised in ensuring the regulation and integrity of financial networks and those providing essential services. For example, the ability to limit access to domains and impose restrictions upon the distribution of files and services may equally be applied to distributions over a blockchain, as it was applied against systems such as Grokster. In addition, the lawsuits filed by digital media companies against filesharing companies such as Grokster (Hogberg, 2006) demonstrate how the judicial doctrines of vicarious liability and contributory infringement allow the courts to impose restrictions on actions taken by the users of a peer-to-peer network.
In holding users of a system liable, including corporations that deploy peer-to-peer systems, the courts can bind them and restrict access to such networks where illicit activity or financial crimes have occurred. In recent examples of impropriety, such as the FTX “cryptocurrency” exchange collapse, the extension of judicial doctrines concerning contributory infringement would enable the courts to ensure that commercial node operators involved with providing services using a blockchain act within the existing legal frameworks. Such regulations ensure that decentralised servers can come under regulatory control, as long as the system is understood and the measurement of the key centrality points in the network is completed (Bader & Madduri, 2006).
Watts, D. J., & Strogatz, S. H. (1998). Collective dynamics of ‘small-world’ networks. Nature, 393(6684), 440–442. https://doi.org/10.1038/30918
Watts and Strogatz (1998, p. 440) discovered a complex network model which allowed them “[t]o interpolate between regular and random network[s]”. This network form is between a regular and a random network structure, and forms the basis for the interconnectivity between nodes in the Bitcoin network. By studying the interaction between nodes, the authors presented a methodology that would capture many connectivity patterns between biological systems, systems and the natural world, power grids, neural networks, and even social network dynamics on the internet. Such a model allowed the creation of mathematical models simulating or representing interconnected network systems.
Introducing a small-world network forms the basis for the network design associated with Bitcoin and other blockchain-based networks. While other authors present Bitcoin or blockchain systems as decentralized or distributed networks, the interconnectivity patterns and economic incentives within Bitcoin preclude the interconnection of nodes in any structure other than a small world or complete graph. Such models can be used in analyzing epidemiological systems, including the spread of diseases, and may be extended into the analysis of transaction and network flow.
Consequently, the methodologies and empirical models derived from the work of these authors form the basis for many of the methodologies used to analyze and quantitatively test network structures within such research. While multiple papers have been published on the topic, and continue to be presented in more recent publications, the work by Watts and Strogatz (1998) presents the seminal discovery of this type of network and underlies the creation of all subsequent methodologies and models.
This article was lightly edited for clarity purposes.
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