Tezos

The case for Tezos maximalism

 ● Distributed ledger, Cryptocurrency,
What is Tezos? Smart-contract platform

● Started out in 2014

● Pioneered on-chain governance

● Purely relies on proof-of-stake

● Live since June 2018

What is on-chain
governance?
Most ledgers form consensus
over a set of balances or
contracts.

Tezos forms consensus over its

own protocol as well
Maximalism in a nutshell...
A dilemma
- Coins, tokens, and other purely digital assets are held together solely through
code and network effects.

- They cannot survive in a frictionless environment.

- Decentralized ledgers considerably reduce large scale coordination costs.

Friction: the force
that resists relative
motion between two
bodies in contact.
A few usual premises for Bitcoin maximalism

- Money / store of values are the only asset we know of

that can live on network effects alone.

- Yes, we did know that, Swiss Dinar proved it. Mises’

regression theorem, Chartalism identify important
catalysts and stabilizing factors, but not necessary
conditions.

- Money is held because it is the most liquid means of

exchange. Cheapest way to preserve optionality.
Barter Economy

Arrow
Meat heads

Fish

Wheat

Wood
With money

Arrow
Meat heads

Money
Fish

Wheat
Wood
Q: won't transaction
costs disappear with
better technology?
Transaction costs
reflect

UNCERTAINTY
Producers, merchants
& market makers
insure money holders
What reduces transaction costs?

- Global trade
- Global wealth
- Information technology (it does help)
- Trade graph topology
Q: don't blockchain
protocols have tradeoffs
permitting differentiation?
Yes, but few
Blockchain tradeoffs

Probably a meaningful trade-off Probably not a meaningful trade-off

● Decentralization Vs. efficiency ● Security Vs. features

● Robustness Vs. adaptativity ● “Platform” Vs. MOE
● Auditability Vs. privacy ● MOE Vs. SOV
Not saying we're close to
the efficient frontier yet.
Just saying those
tradeoffs exist.
Bitcoin has a massive lead

- First mover effect is incredibly potent

- Very large comparative awareness
- Unique, compelling, narrative
- Benefits from differentiation may be small
Formalized governance
is the only meaningful
differentiator.
That doesn’t make it
automatically better, it
just means other
differences don’t
matter much.
Why Tezos?

Protocol changes create an opportunity for social attacks on cryptocurrencies.

Two approaches:

1) reduce the attack surface as much as possible by limiting evolvability

2) grab the bull by the horns, codify the process as formally as possible,
asymptotically engineer deadlock
Questions?