4 ms·

Bitcoin.org's Gavin Andresen on Open Source and Escrow

28 points by spenvo 16y ago

JoachimSchipper 16y ago
I think we've had enough Bitcoin for a while.
- jerguismi 16y ago
  Well, bitcoin seems to gain fans pretty fast. Some people are extremely fanatic about it. Especially libertarian-type people. I highly doubt that the phenonemon will slow down any time soon.
- tabsa 16y ago
  Yes, it's enough to talk about probably the biggest invention in financial sector in last 20 years. Let's forget all about those calls for entrepreneurs to focus on something more world changing than iphone widgets. If Bitcoin isn't just a definition of a word "hack", and the most ingenious hack i have ever seen in financial sector which is in serious need of disruption. Lets better read and talk about Steve Jobs'es new book and the how new ipad is better than older and Ipad. Why tumblr is the new wordpress...
  - kwis 16y ago
    > Yes, it's enough to talk about probably the biggest invention in financial sector in last 20 years. Off the top of my head, I would state that the following are unquestionably larger financial innovations in the past 20 years: SPDRs, HOLDRs, ETFs, ETNs, dark pools, target-date funds, target risk funds, auction-rate securities, online b2b markets, online b2c markets, online banking, automated market-making, new insurance products, improvements in risk analysis (credit scoring), removal of information asymmetries, just... so much innovation The bitcoin market is less than a blip on the radar screen. It's so small that if somebody were to sell 100,000BCN right now, they'd crash the price down to pennies. And if somebody were to buy 100,000USD of BCN right now, the exchange rate would skyrocket. It's a small, illiquid market of people who have, mostly for political reasons, decided that they will convert electricity into a private virtual currency. I know that right now there are a lot of bitcoin miners, dreaming of how wealthy they'll be once their deflationary-by-design virtual currency takes over the world, but I can't envision any realistic scenario whereby that could happen. Heck, the political risk alone makes it untenable as a serious store of value as it would be trivial for a nation to outlaw it's use, thus destroying the utility. If you don't want to store your wealth in government-issued currency, that's great. But I'd suggest converting wealth to productive assets (e.g. shares of companies, loans to companies, land and other hard assets) rather than a virtual currency that lacks both the inherent value of productive assets and the transactional ease of government-issued currency.
    - spenvo 16y ago
      Excellent points. I'll confirm your assumption about BTC's volatility: a single sell-off of ~10k last week took 25% of BTC's value with it. The limited purchasing power of the BTC economy has hindered economic development, but that is to be expected with any new currency. However, Bitcoin as a medium of exchange is quite extraordinary and has recently caught the attention of Anonymous because of its "untraceable" (term used loosely) characteristics. There is the potential for Bitcoin to cater to a community outside of sovereign banks. In other words, there are interesting possibilities that exist beyond what goldbugs have in mind.
      - kwis 16y ago
        > but that is to be expected with any new currency. I think the problem is somewhat unique to unbacked currencies. BTC has value solely because some people agree that BTC has value. It can go to zero (and stay there) for any reason. The value has no minimum that can be defined by looking at the industrial value of a commodity (as with commodity monies). Nor is there a minimum that can be determined by comparing the money supply to the underlying productivity of a nation whose residents are required, by law, to use the money (as with fiat monies). As an aside, if I wanted to setup competing currencies, I'd create a brokerage that allows the cheap, easy, instant transfer of ownership of fractional securities from one member to another. Then we'd have tens of thousands of competing currencies, all of which are backed by a combination of assets and productive capacity. Entrepreneurs could even setup companies designed solely to work as currencies. I know that wouldn't appeal to those who care primarily about traceability, but frankly, I don't foresee any government allowing the widespread adoption of any mechanism that allows for untraceable transfers of large sums of money.
    - tabsa 16y ago
      By new insurance products you probably meant something like CDS? Or credit rating agencies using those improvements in risk analysis to rate those CDO's as AAA+++ would buy again? What you failed to mention is that Bitcoin actually allows virtual currency without a central authority, and the main value is not storage, but in value transfers and lowering barriers of entry. It's actually cheaper and faster(3 days vs 15 mins) already for me to use bitcoin to transfer value inside EU, even with high currency/bitcoin exchange rates. Did political risk stop torrents from being usefull and disrupting?
- mynameishere 16y ago
  No kidding. These people are worse than goldbugs, who at least have the largely unalterable and easy-to-understand physical properties of an element on their side.
- tabsa 16y ago
  I'm sorry for the rant above, those type of comments get me quite emotional. I would like to point out some things why Bitcoin and especially Gavin Andresen is so interesting: 1. Gavin is a real forward thinking entrepreneur/hacker who is actually not just trying to make headlines to get venture funded, but is actually quietly building infrastructure for his own startup. 2. If his startup fails, we still get the infrastructure (Bitcoin), public gets enormous value even when/if his startup is dead. Thats quite alot of differrence from startups like cuil or colour, where they burn money (value) and almost nothing is left after the failure, except for cautionary tale how not to do things. 3. Bitcoin (if successfull) brings alot competition to financial sector, and if it gains any significant traction it could change the monopolistic practices of currencies issued by nation states.
  - JoachimSchipper 16y ago
    I'm well aware of why Bitcoin's fans think it's cool. I still don't want to see a Bitcoin article on HN every three days. Seriously, look at http://searchyc.com/submissions/bitcoin?sort=by_date http://searchyc.com/submissions/bitcoin?sort=by_date. There's a couple of people who will upvote everything with Bitcoin in the title, so every last one of these submissions has made it to the front page.
    - tabsa 16y ago
      The article is more about the entrepreneur and less about bitcoin. Also you could make the same argument about Twitter/Apple/Facebook/Google/Android/Node.js before that there was RoR. Are those news(or even PR releases) more valuable than news about Bitcoin?
    - spenvo 16y ago
      Sorry that a single Bitcoin link each three days exhausts you. It's been two weeks since my last blog post or submission here. You know why? Because it takes two weeks to put together anything worth reading. The fact that Gavin was asked (and answered) many of the questions HN-ers have had about escrow and wallet security shows your bias. If having the word "Bitcoin" in the title offends you somehow, please take the time to read what you're bashing so that you can critique it here.
kristofferR 16y ago
BitCoin is damn interesting, it has the potential to dramatically change the world. I hope it takes off. I think it will though, since the early adopters have a vested interest in growing the currency (there never will be more than 21 million BTC in circulation, so acquiring 1000BTC now will never be less than 1/21000 of the currency no matter how popular it becomes). New exciting things are happening daily on the BitCoin front: http://www.bitcoinnews.com/ http://www.bitcoinnews.com/
- windsurfer 16y ago
  Where does BitCoin's value come from?
  - kristofferR 16y ago
    It comes from the same place as all other currencies, the people's willingness to take it.
  - Seth_Kriticos 16y ago
    Value source is pretty much the same as all other currencies too: people use it to exchange goods. It's actually a big game of trust, that you can use the bitcoin you get today to buy something tomorrow. As the number of people engaging in trading bitcoins, the market regulates it's self by supply and demand basis ( here is a chart on the current exchange values http://bitcoincharts.com/markets/ http://bitcoincharts.com/markets/ ). The difference to most other current FIAT currencies is, that there is a maximum number of bitcoins that can be generated (20,999,999.9769 BTC), and it gets harder with time (exponential computation time needed to get them). This prevents runaway inflation. To break it down to simple terms: it has value because people believe that it has value and use it to exchange goods and convert it to other currencies.
    - windsurfer 16y ago
      I still don't see why people would pay money for this virtual thing. It doesn't have any real value yet, everything is promised to come. It looks like some kind of scheme that promises future value in exchange for your cash today. Isn't this called a Ponzi scheme? http://en.wikipedia.org/wiki/Ponzi_scheme http://en.wikipedia.org/wiki/Ponzi_scheme If, on the other hand, governments backed this currency by guaranteeing some kind of flat conversion rate, I would be all for this system. As it is, I'm staying out.

28 points by spenvo 16y ago

JoachimSchipper 16y ago

I think we've had enough Bitcoin for a while.

jerguismi 16y ago
Well, bitcoin seems to gain fans pretty fast. Some people are extremely fanatic about it. Especially libertarian-type people. I highly doubt that the phenonemon will slow down any time soon.
tabsa 16y ago
Yes, it's enough to talk about probably the biggest invention in financial sector in last 20 years. Let's forget all about those calls for entrepreneurs to focus on something more world changing than iphone widgets. If Bitcoin isn't just a definition of a word "hack", and the most ingenious hack i have ever seen in financial sector which is in serious need of disruption. Lets better read and talk about Steve Jobs'es new book and the how new ipad is better than older and Ipad. Why tumblr is the new wordpress...
- kwis 16y ago
  > Yes, it's enough to talk about probably the biggest invention in financial sector in last 20 years. Off the top of my head, I would state that the following are unquestionably larger financial innovations in the past 20 years: SPDRs, HOLDRs, ETFs, ETNs, dark pools, target-date funds, target risk funds, auction-rate securities, online b2b markets, online b2c markets, online banking, automated market-making, new insurance products, improvements in risk analysis (credit scoring), removal of information asymmetries, just... so much innovation The bitcoin market is less than a blip on the radar screen. It's so small that if somebody were to sell 100,000BCN right now, they'd crash the price down to pennies. And if somebody were to buy 100,000USD of BCN right now, the exchange rate would skyrocket. It's a small, illiquid market of people who have, mostly for political reasons, decided that they will convert electricity into a private virtual currency. I know that right now there are a lot of bitcoin miners, dreaming of how wealthy they'll be once their deflationary-by-design virtual currency takes over the world, but I can't envision any realistic scenario whereby that could happen. Heck, the political risk alone makes it untenable as a serious store of value as it would be trivial for a nation to outlaw it's use, thus destroying the utility. If you don't want to store your wealth in government-issued currency, that's great. But I'd suggest converting wealth to productive assets (e.g. shares of companies, loans to companies, land and other hard assets) rather than a virtual currency that lacks both the inherent value of productive assets and the transactional ease of government-issued currency.
  - spenvo 16y ago
    Excellent points. I'll confirm your assumption about BTC's volatility: a single sell-off of ~10k last week took 25% of BTC's value with it. The limited purchasing power of the BTC economy has hindered economic development, but that is to be expected with any new currency. However, Bitcoin as a medium of exchange is quite extraordinary and has recently caught the attention of Anonymous because of its "untraceable" (term used loosely) characteristics. There is the potential for Bitcoin to cater to a community outside of sovereign banks. In other words, there are interesting possibilities that exist beyond what goldbugs have in mind.
    - kwis 16y ago
      > but that is to be expected with any new currency. I think the problem is somewhat unique to unbacked currencies. BTC has value solely because some people agree that BTC has value. It can go to zero (and stay there) for any reason. The value has no minimum that can be defined by looking at the industrial value of a commodity (as with commodity monies). Nor is there a minimum that can be determined by comparing the money supply to the underlying productivity of a nation whose residents are required, by law, to use the money (as with fiat monies). As an aside, if I wanted to setup competing currencies, I'd create a brokerage that allows the cheap, easy, instant transfer of ownership of fractional securities from one member to another. Then we'd have tens of thousands of competing currencies, all of which are backed by a combination of assets and productive capacity. Entrepreneurs could even setup companies designed solely to work as currencies. I know that wouldn't appeal to those who care primarily about traceability, but frankly, I don't foresee any government allowing the widespread adoption of any mechanism that allows for untraceable transfers of large sums of money.
  - tabsa 16y ago
    By new insurance products you probably meant something like CDS? Or credit rating agencies using those improvements in risk analysis to rate those CDO's as AAA+++ would buy again? What you failed to mention is that Bitcoin actually allows virtual currency without a central authority, and the main value is not storage, but in value transfers and lowering barriers of entry. It's actually cheaper and faster(3 days vs 15 mins) already for me to use bitcoin to transfer value inside EU, even with high currency/bitcoin exchange rates. Did political risk stop torrents from being usefull and disrupting?
mynameishere 16y ago
No kidding. These people are worse than goldbugs, who at least have the largely unalterable and easy-to-understand physical properties of an element on their side.
tabsa 16y ago
I'm sorry for the rant above, those type of comments get me quite emotional. I would like to point out some things why Bitcoin and especially Gavin Andresen is so interesting: 1. Gavin is a real forward thinking entrepreneur/hacker who is actually not just trying to make headlines to get venture funded, but is actually quietly building infrastructure for his own startup. 2. If his startup fails, we still get the infrastructure (Bitcoin), public gets enormous value even when/if his startup is dead. Thats quite alot of differrence from startups like cuil or colour, where they burn money (value) and almost nothing is left after the failure, except for cautionary tale how not to do things. 3. Bitcoin (if successfull) brings alot competition to financial sector, and if it gains any significant traction it could change the monopolistic practices of currencies issued by nation states.
- JoachimSchipper 16y ago
  I'm well aware of why Bitcoin's fans think it's cool. I still don't want to see a Bitcoin article on HN every three days. Seriously, look at http://searchyc.com/submissions/bitcoin?sort=by_date http://searchyc.com/submissions/bitcoin?sort=by_date. There's a couple of people who will upvote everything with Bitcoin in the title, so every last one of these submissions has made it to the front page.
  - tabsa 16y ago
    The article is more about the entrepreneur and less about bitcoin. Also you could make the same argument about Twitter/Apple/Facebook/Google/Android/Node.js before that there was RoR. Are those news(or even PR releases) more valuable than news about Bitcoin?
  - spenvo 16y ago
    Sorry that a single Bitcoin link each three days exhausts you. It's been two weeks since my last blog post or submission here. You know why? Because it takes two weeks to put together anything worth reading. The fact that Gavin was asked (and answered) many of the questions HN-ers have had about escrow and wallet security shows your bias. If having the word "Bitcoin" in the title offends you somehow, please take the time to read what you're bashing so that you can critique it here.

kristofferR 16y ago

BitCoin is damn interesting, it has the potential to dramatically change the world. I hope it takes off. I think it will though, since the early adopters have a vested interest in growing the currency (there never will be more than 21 million BTC in circulation, so acquiring 1000BTC now will never be less than 1/21000 of the currency no matter how popular it becomes). New exciting things are happening daily on the BitCoin front: http://www.bitcoinnews.com/ http://www.bitcoinnews.com/

windsurfer 16y ago
Where does BitCoin's value come from?
- kristofferR 16y ago
  It comes from the same place as all other currencies, the people's willingness to take it.
- Seth_Kriticos 16y ago
  Value source is pretty much the same as all other currencies too: people use it to exchange goods. It's actually a big game of trust, that you can use the bitcoin you get today to buy something tomorrow. As the number of people engaging in trading bitcoins, the market regulates it's self by supply and demand basis ( here is a chart on the current exchange values http://bitcoincharts.com/markets/ http://bitcoincharts.com/markets/ ). The difference to most other current FIAT currencies is, that there is a maximum number of bitcoins that can be generated (20,999,999.9769 BTC), and it gets harder with time (exponential computation time needed to get them). This prevents runaway inflation. To break it down to simple terms: it has value because people believe that it has value and use it to exchange goods and convert it to other currencies.
  - windsurfer 16y ago
    I still don't see why people would pay money for this virtual thing. It doesn't have any real value yet, everything is promised to come. It looks like some kind of scheme that promises future value in exchange for your cash today. Isn't this called a Ponzi scheme? http://en.wikipedia.org/wiki/Ponzi_scheme http://en.wikipedia.org/wiki/Ponzi_scheme If, on the other hand, governments backed this currency by guaranteeing some kind of flat conversion rate, I would be all for this system. As it is, I'm staying out.