11 ms·

I'm most bullish on bitcoin when I read articles such as this one, and most skeptical when I read the thoughts of the bitcoin believers. It's truly the most int

by paul 13y ago

I'm most bullish on bitcoin when I read articles such as this one, and most skeptical when I read the thoughts of the bitcoin believers. It's truly the most interesting technological development in years, if only because it reveals how little anyone really understands money or economics. Here's another interesting (though imperfect) way of thinking about bitcoin: it's a decentralized corporation, where bitcoins are ownership shares and the business is money transfer, like a decentralized Western Union. And for further thought, could other types of businesses also be structured in this way?

peterjancelis 13y ago
Exactly. Bitcoin is the first autonomous corporation.
- erikpukinskis 13y ago
  The next thing we need is an autonomous web host.
  - shitgoose 13y ago
    https://freenetproject.org https://freenetproject.org
greyman 13y ago
I am not a libertarian and do not have a political agenda, but it is imaginable that certain parts of the government could be replaced with the structure like this one. I don't know how the transition could happen, but at the end, the mining in the network will be done by citizens, bitcoins will be named "bitvotes", and every citizen will mine those bitvotes, or they could be distributed fairy (one bitvote to each citizen). Then, the citizens could vote about anything with those bitvotes, and the bitcoin technology ensures that the voting is provably fair and verification of the correct voting results doesn't require any third party. But again, this is not my agenda and I don't know if it would be good; I just say that the bitcoin technology invention allows this to happen.
- ReidZB 13y ago
  Such a scheme has a huge flaw: it allows extortion/coercion. Suppose I am a mob boss and I wish to become (insert position here). I send my goons to inform you that voting for me is a wise decision because I can offer you protection from the vicious thugs in the area. It would be a shame if the vicious thugs burned your house down, wouldn't it? So, you'd be forced to reveal your bitvote address to me under threat of violence. Once you vote, I just check that you voted for me. And if you didn't... A real cryptographic voting system goes to great lengths to prevent this scenario. In such a system, a voter can prove to himself that his vote counted toward the proper party, but crucially the voter cannot prove such to anyone else. This prevents coercion. Of course, real cryptographic voting systems have a bunch of other nice properties, but this is a really major one that most people overlook. Example of a cryptographic voting system: Helios (https://vote.heliosvoting.org/ https://vote.heliosvoting.org/). Also see the tech docs (http://documentation.heliosvoting.org/verification-specs/helios-v3-verification-specs http://documentation.heliosvoting.org/verification-specs/hel...). Helios is an online system, so it's not ready for prime-time voting --- it would need to be adapted into an in-person scheme, which cryptographers have already created --- but it does demonstrate the concepts involved. This is an area of active research, BTW.
  - jellicle 13y ago
    It's not a huge flaw, since our current voting system (in any country you care to name) allows exactly that, and your scenario is not observed in the wild, since it is illegal.
    - tishcros91 13y ago
      It's such a blessing that nothing illegal is ever observed in the wild.
    - lukeschlather 13y ago
      i don't think you properly understand the objection. the mob boss may threaten but cannot legally know what you vote
    - 13y ago
natrius 13y ago
My current answer to that question is that any industry that relies on trust could be structured in this way. If DNS were implemented on a blockchain, purchasing that chain's currency would be betting on increasing demand for that chain's transactions, domain names. What other industries are fundamentally about trust?
- Rhapso 13y ago
  Verification and validation. Bitcoin gives us a way to change and extend the trusted third party system Cryptography has been built on since the 80s. Those schemes worked great in theory, but it turns out there are no trusted third parties to build them on.
- lukifer 13y ago
  In case you're not aware: there is a BitCoin fork which seeks to compete with DNS, called NameCoin. Though the primary purpose is domain resolution, it's also a generic key-value storage system using the block chain.
- baddox 13y ago
  Virtually any service that can feasibly be arranged and delivered online is fundamentally about trust, and you don't even need Bitcoin to solve many of those. I'm reminded of an example which I believe was given by some libertarian writer, perhaps David Friedman. One big role of governments and private institutions is the regulation of service industries through testing and licensing. In many places it is illegal to provide legal advice without an official license, often from the government. But all you need is email and public key cryptography to solve that issue. A certain legal expert, known only by his public key, could develop a good reputation for providing good service in some jurisdiction, let's say California. He need not be legally licensed in California or even live in California. You can just email him your question, arrange some electronic payment (okay, Bitcoin could work here), and he can respond with legal advice signed with his private key. Bingo. You know for a fact that you received legal advice from someone with a good reputation for providing legal advice, which is precisely the point of government licensing for lawyers.
  - 13y ago
steveklabnik 13y ago
Searching for "distributed autonomous corporation" will find you all sorts of half-interesting, half-totally ridiculous garbage information on this topic. It's really fascinating.
- SectioAurea 13y ago
  It's all in the brainstorming stages. Distributed Autonomous Government is also theoretically possible, offering voluntary participation, transparent workings and direct democracy.
RoboTeddy 13y ago
In theory, possibly: - identity ledgers - credit scores / reputation tracking - credit & debt creation and trading - non-bitcoin asset ownership ledgers - voting systems - kickstarter - ebay It'd actually be possible to build distributed voting systems into this applications, such that changes require majority approval. It's also possible for new decentralized corporations to raise money by "IPO"-ing with a currency (Mastercoin raised ~5 million this way).
tlrobinson 13y ago
In fact, "decentralized/distributed autonomous corporations", or "DACs", are a popular notion among Bitcoiners: https://en.bitcoin.it/wiki/Distributed_Autonomous_Community_/_Decentralized_Application https://en.bitcoin.it/wiki/Distributed_Autonomous_Community_...
loceng 13y ago
The problem that I have heard being stated before is that Bitcoin is associated with real money. This basically leads to the value of each Bitcoin increasing, and then early adopters making gains that they shouldn't really be making. I don't know how a system would look, where everyone starts off with X Bitcoin, though the current system feels wrong where some people now have $100s millions of Bitcoins and didn't do anything for them. This value should be re-distributed somehow.
- 001sky 13y ago
  hmm...sounds like real estate in NY, London, or California !
  - loceng 13y ago
    Indeed, they didn't do anything for those values to be increasing 'exponentially.' And landlord and rents cause problems such as gentrification and a reduced quality of life for all, among a few of the core problems.
- tolmasky 13y ago
  ... Why? It seems to me that it works the same as any system with early adopters willing to take on risk. People that got into twitter early make more than people who get in later, without any necessary correlation to how much work they've contributed. Early investors in a company often put in no work beyond their capital, should their shares be redistributed after it becomes a sure thing? If bitcoin fails, the losses of those that went into bitcoin certainly won't be "redistributed", so why should the gains? Not to mention the current monetary system also has huge disparity so it doesn't really seem to be a property exclusive to bitcoin per se. A system that offers no rewards to early adopters makes no sense because everyone is incentivized to just wait until it proves itself since the gains will be redistributed anyways, so why bother with the risk before it's a sure thing?
  - loceng 13y ago
    I feel your comparison is apples and oranges, other than that the current structure of Bitcoin gives gain to early adopters, and early adopters / investors in a business potentially allows investors to have higher gains. However they are different systems. Why can't the system exist just based on the incentive of the value that system brings? Why can't that be reward enough? The issue here is allocation of resources - to build and implement this structure and have it being adopted. The reason this is getting exposure is because businesses can make a profit, in a de-centralized Ponzi-scheme like structure - and with it being de-centralized giving it a huge amount of momentum and putting it to a holistic scale, where there can be lots/"unlimited" players perpetuating the system in different ways. An alternative is the government implementing this system - and then why not the government (society as a whole) make those gains/rewards that occur? And I'd more imagine an international government than individual nations. What I am trying to contrast it to is how it would look if everyone was already in this system, and then furthermore, if they were all brought into the system at once - having it mirror current resources and ownerships. This isn't easy to conceptualize either, as people's time is a resource - and what's the minimum value of a base unit of time? Yes, giving reward speeds up how quickly the system will exist or seemingly be adopted by people, though it doesn't mean it's actually implemented in a secure and stable way. Its competitor is essentially money, so people who want to keep the status quo of money in place will be a very strong friction against Bitcoin. When people buy Bitcoin with real money, if they are the last ones, what they get from each Bitcoin will be less than what the early adopters do - which I feel is a very large disincentive for Bitcoin ever being fully adopted by everyone. And if 90% of people are now using Bitcoin for transactions, how much is real money actually worth? Those "late" adopters will not have places to spend that money, fewer and fewer, and so they end up absorbing the downside or rather they end up paying for the upside that current investors / early adopters are gaining. Is this wrong logic? If not, how is this fair? Simply saying "don't be the last!" isn't really an adequate response either. The value of real money won't decrease any time soon, though as a system similar to Bitcoin has higher adoption rate there will become a tipping point where people just won't accept real dollars in exchange for Bitcoin because they won't have as many places to spend it, it won't be as easily "liquidated." The why is so you can create a system that doesn't punish or put "later adopters" at a disadvantage. If putting $1 in of current money into the system, and then the equivalent of $1 into the system 5 years from now gains you the same value, then that would be fair and balanced. There being a fixed amount of Bitcoin, that isn't structured to be immediately distributed to 100% of existing money, is a problem. It's currently structured to be a land grab, where land is a finite resource. Perhaps I am missing some foundational understanding of how Bitcoin works and that is skewing my understanding and answers.
api 13y ago
I'm not sure Bitcoin is money, at least not in the traditional sense. As I said on another thread: one of the reasons I think Bitcoin is probably a fundamental innovation is that nobody quite seems to know what it is, including me. Nearly all Bitcoin's critics criticize it for being a poor replacement for cash, or for gold, or for some other traditional monetary unit. Automobiles are poor carriages too, and engines are poor horses. I sympathize with some leftist critiques of deflationary currencies and libertarianism, but since I'm not sure Bitcoin is a currency I am not sure they are applicable. It is true that many bitcoiners have a libertarian/anarchist ideology, but I am not sure that matters much. A thing is what it is. Bitcoin is... whatever it is.
pjbrunet 13y ago
Seems it's only decentralized to a degree. Go to the Bitcoin Foundation website, they say they want to keep Bitcoin decentralized. So how much influence does this Bitcoin Foundation have over the future of Bitcoin? No idea. There's only one (unpaid) Bitcoin developer responsible for the whole thing? Sounds like a tremendous responsibility for one person, considering what's potentially at risk. How are changes rolled out, how are changes vetted and to what degree are new changes a threat to Bitcoin's supposed ideals?
- RoboTeddy 13y ago
  Whoever who convinces 50+% of the miners to adopt their version of the software wins. The core developers can commit code and make releases that do whatever they want, but if they e.g. tried to pay all transaction fees to themselves, miners wouldn't install the new version and someone would fork the project. How much control does any open source developer have over the projects they work on? Linus seems to have pretty tight control over Linux, but if he started messing up, he'd lose his position pretty fast. Likewise, the developers have a lot of control, as long as they are effective and behave well.
  - pjbrunet 13y ago
    How many of the miners know how to evaluate updates? Most of these miners I read about, they bought some expensive hardware and just plugged it in. Is there some evaluation period before updates go live? Also, what if a seemingly innocuous change has unforeseen consequences? Nothing like Bitcoin has ever existed.
    - RoboTeddy 13y ago
      So far, changes seem to happen fairly slowly. Things are discussed ahead of time. Some kinds of changes are proposed ahead of time in the form of a BIP (Bitcoin Improvement Proposal) -- https://github.com/bitcoin/bips https://github.com/bitcoin/bips. Even tiny changes, that seem entirely reasonable to me, can generate controversy. Core developers ask each other to acknowledge each pull request. If the developers tried to push something through that many miners wouldn't like, I'm confident people would notice and it would cause a large outcry. > Seemingly innocuous changes can indeed have unforseen consequences. The core Bitcoin developers seem conservative, reasonable, skilled, and they test things quite heavily. That said, changes are risky, and they've caused problems in the past. Bitcoin is risky!
rokhayakebe 13y ago
It is amazing how one word "COIN" added to this word has shaped everyone's thinking. Would we treat it the same if the guys behind it named it "Bitcard" or "Bitpoint?" That one word is what set apparently most people to speak of it, and treat it as money. BC is nothing like Money. BC is a card trading game where the players make the cards, the difficulty to make cards increases , and the value of the cards is decided by the market. It's a fun geek game. Awesome. BC is everything money as we know it today is not. Money followed value creation (something made, something done). Bitcoin was created, valued at X, AND THEN looking for value to replace.
- kordless 13y ago
  Bitcoin has a funnel, just like any other business or technology platform. Branding is a form of marketing, and it's marketing's job to raise interest. This is the first tier of the funnel. Interest gives way to being able to understand how a given technology is important to us. This is the second tier. Next, those of us that fully understand how Bitcoin works begin to spread the word about how it's reliable and how it could possibly change the world. This is the third tier. As implied trust comes online for Bitcoin for the general population, it will move to wide-spread adoption. That's the fourth and final tier. We're still in the second tier, which means people are still asking "why should we care?" and vocalizing their fears about something they don't understand. With technology adoption rates increasing over the last year (due to the greater interconnects we have via the Internet) I'd suspect we'll see the start of the third tier in 3-6 months, tops. As fears give way to trust, we'll all settle into a routine with the technology by the end of the year.
  - alttab 13y ago
    Optimistically. I'm awaiting more infrastructure before calling stage 3. We are still 2 years from that in my book. Still too much to learn.
- brownbat 13y ago
  > It is amazing how one word "COIN" added to this word has shaped everyone's thinking. Yeah, Bit-distributed-public-ledger doesn't have the same ring, but I feel like there are a million problems that can be solved with this technology that are barely being explored. Namecoin is one example, a distributed DNS system, but it feels like that's just scratching the surface of problems that require allocating sparse control over many decisionmakers.
baddox 13y ago
> And for further thought, could other types of businesses also be structured in this way? I'm not sure that this is exactly what you mean, but there are many existing and proposed "businesses" (I prefer the term "markets") built on Bitcoin: https://en.bitcoin.it/wiki/Transferable_virtual_property https://en.bitcoin.it/wiki/Transferable_virtual_property https://en.bitcoin.it/wiki/Trade#Financial https://en.bitcoin.it/wiki/Trade#Financial
jhonovich 13y ago
"I'm most bullish on bitcoin when I read articles such as this one .... it reveals how little anyone really understands money or economics." That is an incredibly arrogant statement, considering the article is from a Nobel prize winning economist and you did nothing to refute or undermine his actual points or references.
- fat0wl 13y ago
  lol this this thisssss! bitcoin culture in a nutshell. the major economists & finance analysts say stuff like "explain how this is not a speculative bubble", for example, because they outright see it as one & the bitcoiners dismiss them as hacks because they didn't use a bunch of crypto buzzwords
  - jadeddrag 13y ago
    Which is more likely, that economists don't understand cryptography, or cryptologists don't understand economics?
    - dragonwriter 13y ago
      More likely than either being particularly more likely than the other is that neither economists nor cryptographers are particularly likely to understand the other field.
      - fat0wl 13y ago
        yea but my view here is that you don't need to understand cryptography to derive the value of a Bitcoin. It is akin to other currency systems that have come before it. the crypto aspects are new, sure, & provide a good infrastructure that may give it staying power but the cryptography shouldn't actually be where the value comes from. I think a sound economic analysis of the market can be done regardless of the transactional method. sure, it's clever but its a feature of a value store, not actual value
- olalonde 13y ago
atmosx 13y ago
Although I don't consider economics to be a science by any means, what I'm seeing generally on HN is that programmers have a very good understanding of the possibilities and applications of bitcoin (the protocol) but don't understand much about economics. Not even the basics and I'm not talking about Friedman, Marx, Aristotle, Smith, Keynes, etc. I'm talking about basic micro/macro-economics.

by paul 13y ago

peterjancelis 13y ago

Exactly. Bitcoin is the first autonomous corporation.

erikpukinskis 13y ago
The next thing we need is an autonomous web host.
- shitgoose 13y ago
  https://freenetproject.org https://freenetproject.org

greyman 13y ago

I am not a libertarian and do not have a political agenda, but it is imaginable that certain parts of the government could be replaced with the structure like this one. I don't know how the transition could happen, but at the end, the mining in the network will be done by citizens, bitcoins will be named "bitvotes", and every citizen will mine those bitvotes, or they could be distributed fairy (one bitvote to each citizen). Then, the citizens could vote about anything with those bitvotes, and the bitcoin technology ensures that the voting is provably fair and verification of the correct voting results doesn't require any third party. But again, this is not my agenda and I don't know if it would be good; I just say that the bitcoin technology invention allows this to happen.

ReidZB 13y ago
Such a scheme has a huge flaw: it allows extortion/coercion. Suppose I am a mob boss and I wish to become (insert position here). I send my goons to inform you that voting for me is a wise decision because I can offer you protection from the vicious thugs in the area. It would be a shame if the vicious thugs burned your house down, wouldn't it? So, you'd be forced to reveal your bitvote address to me under threat of violence. Once you vote, I just check that you voted for me. And if you didn't... A real cryptographic voting system goes to great lengths to prevent this scenario. In such a system, a voter can prove to himself that his vote counted toward the proper party, but crucially the voter cannot prove such to anyone else. This prevents coercion. Of course, real cryptographic voting systems have a bunch of other nice properties, but this is a really major one that most people overlook. Example of a cryptographic voting system: Helios (https://vote.heliosvoting.org/ https://vote.heliosvoting.org/). Also see the tech docs (http://documentation.heliosvoting.org/verification-specs/helios-v3-verification-specs http://documentation.heliosvoting.org/verification-specs/hel...). Helios is an online system, so it's not ready for prime-time voting --- it would need to be adapted into an in-person scheme, which cryptographers have already created --- but it does demonstrate the concepts involved. This is an area of active research, BTW.
- jellicle 13y ago
  It's not a huge flaw, since our current voting system (in any country you care to name) allows exactly that, and your scenario is not observed in the wild, since it is illegal.
  - tishcros91 13y ago
    It's such a blessing that nothing illegal is ever observed in the wild.
  - lukeschlather 13y ago
    i don't think you properly understand the objection. the mob boss may threaten but cannot legally know what you vote
  - 13y ago

natrius 13y ago

My current answer to that question is that any industry that relies on trust could be structured in this way. If DNS were implemented on a blockchain, purchasing that chain's currency would be betting on increasing demand for that chain's transactions, domain names. What other industries are fundamentally about trust?

Rhapso 13y ago
Verification and validation. Bitcoin gives us a way to change and extend the trusted third party system Cryptography has been built on since the 80s. Those schemes worked great in theory, but it turns out there are no trusted third parties to build them on.
lukifer 13y ago
In case you're not aware: there is a BitCoin fork which seeks to compete with DNS, called NameCoin. Though the primary purpose is domain resolution, it's also a generic key-value storage system using the block chain.
baddox 13y ago
Virtually any service that can feasibly be arranged and delivered online is fundamentally about trust, and you don't even need Bitcoin to solve many of those. I'm reminded of an example which I believe was given by some libertarian writer, perhaps David Friedman. One big role of governments and private institutions is the regulation of service industries through testing and licensing. In many places it is illegal to provide legal advice without an official license, often from the government. But all you need is email and public key cryptography to solve that issue. A certain legal expert, known only by his public key, could develop a good reputation for providing good service in some jurisdiction, let's say California. He need not be legally licensed in California or even live in California. You can just email him your question, arrange some electronic payment (okay, Bitcoin could work here), and he can respond with legal advice signed with his private key. Bingo. You know for a fact that you received legal advice from someone with a good reputation for providing legal advice, which is precisely the point of government licensing for lawyers.
- 13y ago

steveklabnik 13y ago

Searching for "distributed autonomous corporation" will find you all sorts of half-interesting, half-totally ridiculous garbage information on this topic. It's really fascinating.

SectioAurea 13y ago
It's all in the brainstorming stages. Distributed Autonomous Government is also theoretically possible, offering voluntary participation, transparent workings and direct democracy.

RoboTeddy 13y ago

In theory, possibly: - identity ledgers - credit scores / reputation tracking - credit & debt creation and trading - non-bitcoin asset ownership ledgers - voting systems - kickstarter - ebay It'd actually be possible to build distributed voting systems into this applications, such that changes require majority approval. It's also possible for new decentralized corporations to raise money by "IPO"-ing with a currency (Mastercoin raised ~5 million this way).

tlrobinson 13y ago

In fact, "decentralized/distributed autonomous corporations", or "DACs", are a popular notion among Bitcoiners: https://en.bitcoin.it/wiki/Distributed_Autonomous_Community_/_Decentralized_Application https://en.bitcoin.it/wiki/Distributed_Autonomous_Community_...

loceng 13y ago

The problem that I have heard being stated before is that Bitcoin is associated with real money. This basically leads to the value of each Bitcoin increasing, and then early adopters making gains that they shouldn't really be making. I don't know how a system would look, where everyone starts off with X Bitcoin, though the current system feels wrong where some people now have $100s millions of Bitcoins and didn't do anything for them. This value should be re-distributed somehow.

001sky 13y ago
hmm...sounds like real estate in NY, London, or California !
- loceng 13y ago
  Indeed, they didn't do anything for those values to be increasing 'exponentially.' And landlord and rents cause problems such as gentrification and a reduced quality of life for all, among a few of the core problems.
tolmasky 13y ago
... Why? It seems to me that it works the same as any system with early adopters willing to take on risk. People that got into twitter early make more than people who get in later, without any necessary correlation to how much work they've contributed. Early investors in a company often put in no work beyond their capital, should their shares be redistributed after it becomes a sure thing? If bitcoin fails, the losses of those that went into bitcoin certainly won't be "redistributed", so why should the gains? Not to mention the current monetary system also has huge disparity so it doesn't really seem to be a property exclusive to bitcoin per se. A system that offers no rewards to early adopters makes no sense because everyone is incentivized to just wait until it proves itself since the gains will be redistributed anyways, so why bother with the risk before it's a sure thing?
- loceng 13y ago
  I feel your comparison is apples and oranges, other than that the current structure of Bitcoin gives gain to early adopters, and early adopters / investors in a business potentially allows investors to have higher gains. However they are different systems. Why can't the system exist just based on the incentive of the value that system brings? Why can't that be reward enough? The issue here is allocation of resources - to build and implement this structure and have it being adopted. The reason this is getting exposure is because businesses can make a profit, in a de-centralized Ponzi-scheme like structure - and with it being de-centralized giving it a huge amount of momentum and putting it to a holistic scale, where there can be lots/"unlimited" players perpetuating the system in different ways. An alternative is the government implementing this system - and then why not the government (society as a whole) make those gains/rewards that occur? And I'd more imagine an international government than individual nations. What I am trying to contrast it to is how it would look if everyone was already in this system, and then furthermore, if they were all brought into the system at once - having it mirror current resources and ownerships. This isn't easy to conceptualize either, as people's time is a resource - and what's the minimum value of a base unit of time? Yes, giving reward speeds up how quickly the system will exist or seemingly be adopted by people, though it doesn't mean it's actually implemented in a secure and stable way. Its competitor is essentially money, so people who want to keep the status quo of money in place will be a very strong friction against Bitcoin. When people buy Bitcoin with real money, if they are the last ones, what they get from each Bitcoin will be less than what the early adopters do - which I feel is a very large disincentive for Bitcoin ever being fully adopted by everyone. And if 90% of people are now using Bitcoin for transactions, how much is real money actually worth? Those "late" adopters will not have places to spend that money, fewer and fewer, and so they end up absorbing the downside or rather they end up paying for the upside that current investors / early adopters are gaining. Is this wrong logic? If not, how is this fair? Simply saying "don't be the last!" isn't really an adequate response either. The value of real money won't decrease any time soon, though as a system similar to Bitcoin has higher adoption rate there will become a tipping point where people just won't accept real dollars in exchange for Bitcoin because they won't have as many places to spend it, it won't be as easily "liquidated." The why is so you can create a system that doesn't punish or put "later adopters" at a disadvantage. If putting $1 in of current money into the system, and then the equivalent of $1 into the system 5 years from now gains you the same value, then that would be fair and balanced. There being a fixed amount of Bitcoin, that isn't structured to be immediately distributed to 100% of existing money, is a problem. It's currently structured to be a land grab, where land is a finite resource. Perhaps I am missing some foundational understanding of how Bitcoin works and that is skewing my understanding and answers.

api 13y ago

I'm not sure Bitcoin is money, at least not in the traditional sense. As I said on another thread: one of the reasons I think Bitcoin is probably a fundamental innovation is that nobody quite seems to know what it is, including me. Nearly all Bitcoin's critics criticize it for being a poor replacement for cash, or for gold, or for some other traditional monetary unit. Automobiles are poor carriages too, and engines are poor horses. I sympathize with some leftist critiques of deflationary currencies and libertarianism, but since I'm not sure Bitcoin is a currency I am not sure they are applicable. It is true that many bitcoiners have a libertarian/anarchist ideology, but I am not sure that matters much. A thing is what it is. Bitcoin is... whatever it is.

pjbrunet 13y ago

Seems it's only decentralized to a degree. Go to the Bitcoin Foundation website, they say they want to keep Bitcoin decentralized. So how much influence does this Bitcoin Foundation have over the future of Bitcoin? No idea. There's only one (unpaid) Bitcoin developer responsible for the whole thing? Sounds like a tremendous responsibility for one person, considering what's potentially at risk. How are changes rolled out, how are changes vetted and to what degree are new changes a threat to Bitcoin's supposed ideals?

RoboTeddy 13y ago
Whoever who convinces 50+% of the miners to adopt their version of the software wins. The core developers can commit code and make releases that do whatever they want, but if they e.g. tried to pay all transaction fees to themselves, miners wouldn't install the new version and someone would fork the project. How much control does any open source developer have over the projects they work on? Linus seems to have pretty tight control over Linux, but if he started messing up, he'd lose his position pretty fast. Likewise, the developers have a lot of control, as long as they are effective and behave well.
- pjbrunet 13y ago
  How many of the miners know how to evaluate updates? Most of these miners I read about, they bought some expensive hardware and just plugged it in. Is there some evaluation period before updates go live? Also, what if a seemingly innocuous change has unforeseen consequences? Nothing like Bitcoin has ever existed.
  - RoboTeddy 13y ago
    So far, changes seem to happen fairly slowly. Things are discussed ahead of time. Some kinds of changes are proposed ahead of time in the form of a BIP (Bitcoin Improvement Proposal) -- https://github.com/bitcoin/bips https://github.com/bitcoin/bips. Even tiny changes, that seem entirely reasonable to me, can generate controversy. Core developers ask each other to acknowledge each pull request. If the developers tried to push something through that many miners wouldn't like, I'm confident people would notice and it would cause a large outcry. > Seemingly innocuous changes can indeed have unforseen consequences. The core Bitcoin developers seem conservative, reasonable, skilled, and they test things quite heavily. That said, changes are risky, and they've caused problems in the past. Bitcoin is risky!

rokhayakebe 13y ago

It is amazing how one word "COIN" added to this word has shaped everyone's thinking. Would we treat it the same if the guys behind it named it "Bitcard" or "Bitpoint?" That one word is what set apparently most people to speak of it, and treat it as money. BC is nothing like Money. BC is a card trading game where the players make the cards, the difficulty to make cards increases , and the value of the cards is decided by the market. It's a fun geek game. Awesome. BC is everything money as we know it today is not. Money followed value creation (something made, something done). Bitcoin was created, valued at X, AND THEN looking for value to replace.

kordless 13y ago
Bitcoin has a funnel, just like any other business or technology platform. Branding is a form of marketing, and it's marketing's job to raise interest. This is the first tier of the funnel. Interest gives way to being able to understand how a given technology is important to us. This is the second tier. Next, those of us that fully understand how Bitcoin works begin to spread the word about how it's reliable and how it could possibly change the world. This is the third tier. As implied trust comes online for Bitcoin for the general population, it will move to wide-spread adoption. That's the fourth and final tier. We're still in the second tier, which means people are still asking "why should we care?" and vocalizing their fears about something they don't understand. With technology adoption rates increasing over the last year (due to the greater interconnects we have via the Internet) I'd suspect we'll see the start of the third tier in 3-6 months, tops. As fears give way to trust, we'll all settle into a routine with the technology by the end of the year.
- alttab 13y ago
  Optimistically. I'm awaiting more infrastructure before calling stage 3. We are still 2 years from that in my book. Still too much to learn.
brownbat 13y ago
> It is amazing how one word "COIN" added to this word has shaped everyone's thinking. Yeah, Bit-distributed-public-ledger doesn't have the same ring, but I feel like there are a million problems that can be solved with this technology that are barely being explored. Namecoin is one example, a distributed DNS system, but it feels like that's just scratching the surface of problems that require allocating sparse control over many decisionmakers.

baddox 13y ago

> And for further thought, could other types of businesses also be structured in this way? I'm not sure that this is exactly what you mean, but there are many existing and proposed "businesses" (I prefer the term "markets") built on Bitcoin: https://en.bitcoin.it/wiki/Transferable_virtual_property https://en.bitcoin.it/wiki/Transferable_virtual_property https://en.bitcoin.it/wiki/Trade#Financial https://en.bitcoin.it/wiki/Trade#Financial

jhonovich 13y ago

"I'm most bullish on bitcoin when I read articles such as this one .... it reveals how little anyone really understands money or economics." That is an incredibly arrogant statement, considering the article is from a Nobel prize winning economist and you did nothing to refute or undermine his actual points or references.

fat0wl 13y ago
lol this this thisssss! bitcoin culture in a nutshell. the major economists & finance analysts say stuff like "explain how this is not a speculative bubble", for example, because they outright see it as one & the bitcoiners dismiss them as hacks because they didn't use a bunch of crypto buzzwords
- jadeddrag 13y ago
  Which is more likely, that economists don't understand cryptography, or cryptologists don't understand economics?
  - dragonwriter 13y ago
    More likely than either being particularly more likely than the other is that neither economists nor cryptographers are particularly likely to understand the other field.
    - fat0wl 13y ago
      yea but my view here is that you don't need to understand cryptography to derive the value of a Bitcoin. It is akin to other currency systems that have come before it. the crypto aspects are new, sure, & provide a good infrastructure that may give it staying power but the cryptography shouldn't actually be where the value comes from. I think a sound economic analysis of the market can be done regardless of the transactional method. sure, it's clever but its a feature of a value store, not actual value
olalonde 13y ago

atmosx 13y ago

Although I don't consider economics to be a science by any means, what I'm seeing generally on HN is that programmers have a very good understanding of the possibilities and applications of bitcoin (the protocol) but don't understand much about economics. Not even the basics and I'm not talking about Friedman, Marx, Aristotle, Smith, Keynes, etc. I'm talking about basic micro/macro-economics.