
Why You Should Care About Bitcoin - nvk
https://medium.com/what-i-learned-today/1a812f8fa7cd
======
diogocal
Good quote:

“Hackers are the animals that can detect a storm coming or an earthquake. They
just know, even though they don’t know why, and there are two big things
hackers are excited about now and can’t articulate why – Bitcoin and 3D
printing” \- Paul Graham

~~~
programd
And drones.

------
nvk
This article really reflects the reasons why we are building Coinkite
(coinkite.com) on our own dime.

------
contingencies
Yes, care. However, this article is a strong but partial articulation of the
overwhelming issues with present-era financial systems, the roots of which go
far beyond merely Bitcoin. I addressed more of these in my talk at _Observe,
Hack, Make 2013_ (OHM2013) two months ago on _Finance & The Future Beyond
Bitcoin_.

This article addresses Bitcoin as a protocol, a commodity, and an ecosystem.
These perspectives might be understood in terms of their mapping to William
Stanley's classical theory on the functions of money[1], namely: _a medium of
exchange, a common measure of value (or unit of account), a standard of value
(or standard of deferred payment), and a store of value_ ; also summarized in
1919 by Jevons: _Money 's a matter of functions four: a Medium, a Measure, a
Standard, a Store_.

The first perspective ( _Bitcoin as a protocol_ ) and second perspective (
_Bitcoin as a commodity_ ) could be mapped to the first function ( _medium of
exchange_ ) and second/third functions ( _unit of account /standard of
payment_). Bitcoin may not be ideal as a store of value for a variety of
reasons (relative difficulty of exchange for conventional currency, small
relative market size leading to overall volatility and fundamental price
manipulability), which is probably why this perspective is missing. Other
currencies or assets types exist that can or have _already_ been designed
specifically to maximize their value from this, and each of the classical
perspective: a classic case is the "basket of commodities" approach proposed
for use as a more stable _standard of measure_ (also providing more stable
_store of value_ features if it can be commodified as an investment).

So we can see there are more options here than just Bitcoin and its
distributed single-asset blockchain siblings (a fact which the Bitcoin
community often seems to overlook), and theories and tools that do answer some
of the obvious challenges. But there are also other issues, issues which drive
to the heart of our societies, that desperately need to be better understood
by innovators and participants in our economies.

Since there are recent books[3] eloquently evidence the fact, take it for now
that money conventionally is all about control, and typically occurs only in
warmaking/expansionist societies that systemify inequality and tend to have
lost any sense of cohesive social concern. This control is of the state -
widely defined as a "monopoly of force" \- for organizing the logistical
support required to field larger armies and for taxation of the overall
population. It's rather worrisome to realise, particularly if you have been
lucky enough to experience some of the few but still extant cultures in which
money is not yet dominant in the social order and how greatly its absence
seems to enhance people's mutual trust, assistance and cohesion. Changing the
nature of money, then, actually fundamentally threatens the notion of state.
The truths of world financial surveillance and control presently include the
fact that all international transfers, even within

Over the last three years at Payward, I've also been lucky enough to meet
Bitcoin enthusiasts and business people, high frequency trading (HFT) experts
from some of the world's largest investment banks, international political/law
specialists, monetary theorists and community currency associations. All are
fascinated by the era and bring different perspectives, yet perhaps none of us
fully understand the breadth of concerns at play. We can, however, elucidate
what Bitcoin and brethren represent: the first major crack in long held,
effectively state-linked and inter-state coordinated, near-global, back-
scratching monopoly of usury and control, a crack in which is already
impossible to close through regulatory action. A crack which potentially
offers the beginnings of far-reaching, positive changes in our challenged
world.

We see the future as one of opt-in choice and interoperability (since - if
pigs might jump some distance on occasion - forcing a state-run, centralized
monetary system on people may actually one day be challenged successfully as a
breach of human rights), and thus looking beyond any immediate and concrete
benefit for our own company, Payward have graciously been supporting me in
proposing various standards as IETF Internet Standards Drafts through an open
membership entity, the IFEX Project[4]. Namely X-ISO4217-A3[5] (open
identification of currency-like commodities to bypass ISO registration
issues), IIBAN[6] (open identification of financial endpoints), IMIC[7] (open
identification of financial markets).

We are also (slowly!) brainstorming on a transaction-level protocol, IFEX[8],
both asset/currency/commodity neutral and settlement system neutral, to tie
together disparate systems while addressing concrete issues of settlement path
limitations, latency, normalized transaction status and adequate hooks out to
potentially produce full-featured risk/trust/compliance systems. This protocol
aims to equally describe commodities such as energy (in a full scale grid, or
an embedded system) or physical assets within a modern or emerging
'distributed manufacturing' (3D-printing-style) supply chain. In short we aim
to provide a coherent, logical, transparent platform upon which emerging
settlement paths can compete with conventional settlement paths on a fair
basis. A free market for financial services, if you will, but one which
removes the distinction between goods and money. Simple in conception, rather
more difficult to execute than it sounds, and fantastically threatening to
some established interests. Right now we really need other groups getting in
to participate.

TL/DR: This article is really about some issues with the current financial
system. Bitcoin is only one proposed system, and it is not suitable for all
occasions. Broader financial reform is going on, and we will see more than one
solution. This change is a challenge not only to nations themselves (who will
ultimately have to accept it by broadening their own fiscal systems to include
alternative asset classes), but more immediately to the rather sickly back-
scratching coordination that goes on between them and functions to prevent
innovation, surveil and control even across borders. Decades of haughty 'free
market' and 'human rights' rhetoric are reaching their logical conclusion:
technologies and legal structures that function to remove the old, clunky
system of control and usury through local fiscal monopoly. To let the
imagination flow: we potentially stand on the threshold of global society's
yet greatest rennaissance.

[1] Jevons, William Stanley. (1875) _Money and the Mechanism of Exchange_ [2]
Milnes, Alfred (1919). _The economic foundations of reconstruction_. Macdonald
and Evans. p. 55. [3] Graeber, David _Debt: The First 5000 Years_ (2011) [4]
[http://ifex-project.org/](http://ifex-project.org/) [5] [http://www.ifex-
project.org/our-proposals/x-iso4217-a3](http://www.ifex-project.org/our-
proposals/x-iso4217-a3) [6] [http://www.ifex-project.org/our-
proposals/iiban](http://www.ifex-project.org/our-proposals/iiban) [7]
[http://www.ifex-project.org/our-proposals/imic](http://www.ifex-
project.org/our-proposals/imic) [8] [http://www.ifex-project.org/our-
proposals/ifex](http://www.ifex-project.org/our-proposals/ifex)

