
Bitcoin is Worse is Better - gwern
http://www.gwern.net/Bitcoin%20is%20Worse%20is%20Better?2
======
josephagoss
Not really sure that Bitcoin involves "no major intellectual breakthroughs".

Perhaps no breakthroughs for independent parts (Satoshi did not create a new
cryptographic function, for example) but the placement of known parts into a
working system is in itself an intellectual breakthrough.

I don't understand how the author can say that Bitcoin is in no way an
intellectual breakthrough. Perhaps I misunderstood the article.

Maybe the author misses the creative and novel system that Satoshi built just
because the bricks are not all brand new. Even Bill Gates called Bitcoin a
techno tour de force.

~~~
ferdo
Agreed. The blockchain itself is an intellectual breakthrough, at least in
application.

~~~
drcode
Exactly: Saying that the blockchain was not an intellectual breakthrough is
like saying the lightbulb wasn't an intellectual breakthrough because it
relied on the invention of electrical wires.

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cs702
I agree with much of this essay, but it only hints at a key point: the most
brilliant elements of Bitcoin's design are not in the realm of technical
achievement, but in the realm of _social engineering_.

Bitcoin is not just a "technology" but a _social platform with built-in
incentives_ for attracting miners and transaction processors, and therefore
end-users; growing demand from end-users attracts even more miners and
transaction processors -- a self-reinforcing feedback loop.

All other prior crypto-currency efforts failed because, not because they were
technically "inferior" (in the narrow sense of that word), but because they
lacked the incentives necessary to attract a sufficient number of adopters.

~~~
gojomo
I agree Bitcoin's approachability and incentive structure were crucial. The
interesting question now: is Bitcoin _sui generis_ (like say TCP/IP, and
further cemented in place by network effects) or the harbinger of many similar
systems (like say Napster/Gnutella)?

A lot of people were deterred from trying things in this sphere because of a
(flawed) conventional wisdom that there was no room for success — that various
academic attacks would be fatal, and social/institutional barriers too strong.
But now that Bitcoin shows that an ugly "Minimum Viable Cryptocurrency" with
the right balances/incentives can take off, we're already seeing lots of new
interest and experiments.

I strongly expect some of these will discover new workable tradeoffs, in some
cases even better than Bitcoin's brilliant+lucky mix, that will then either
coexist with Bitcoin in overlapping domains, or feed into the evolution of
'Bitcoin Prime'. Lots more fun ahead.

~~~
maxerickson
If the legal issues are not a big deal, one big competitor will be a low fee,
price stable, zero coin like system underwritten by a commercial entity.

Commercial backing will be more interesting to many consumers than the network
of miners.

~~~
gojomo
Definitely, or a consortium of backers.

I could also see USGov offering a FedCoin (guaranteed redemption for USD) or
TBillCoin (instantly tradable, divisible, interest-bearing USGov debt as
currency).

They might even be able to cook up something that's more anonymous than
Bitcoin (ZeroCoin-like) most of the time, but deanonymizable sfter some
'CoinCourt' due process legal proceedings. (Think ClipperChip/key-escrow, but
for cryptocurrency.)

~~~
chii
> USGov offering a FedCoin

i highly doubt this will ever occur - the Fed Reserve (or more correctly, the
current cohort of "elite" bankers who control the Fed Resesrve) will either
fight bitcoin if it threatens the dominance of the US dollar as the world
currency, or the public will drag it kicking and screaming to adopt it
(without much success i'd presume).

Control of currency is of utmost importance to those who are in power - and i
mean really in power, not those who are voted into power like the POTUS.

~~~
betterunix
First of all, the US dollar is not "the world currency." You need not go
further than Vancouver to find places where USD is not widely used as
currency. While USD is a very strong currency, it is by no means the only
currency in widespread use.

It is equally false to try to separate money from law. Currencies have their
value _because_ of the law -- because of tax laws, and debt laws, and tort
laws, and all the other laws that result in people being legally obliged to
make certain payments. Control of currency is important to governments in the
same way that control of speed is important to someone driving a car. The
control is inherent and the issue is really about not completely screwing
things up.

~~~
smokeyj
> Currencies have their value because of the law

 _Fiat_ currencies have value because their issuing institution has a local
monopoly on violence. Your phrasing is much more palatable.

> Control of currency is important to governments in the same way that control
> of speed is important to someone driving a car.

Citizens are cars to be carefully driven by central bankers? How delightful!

> The control is inherent and the issue is really about not completely
> screwing things up.

The average age of fiat currency is about 27 years old. I don't understand
where your warm tingling sensation is coming from.

~~~
anologwintermut
Fiat currencies have their value because people agreed on that they have
value. Bitcoin is more of a fiat currency than it is anything else. I.e. it
has no value but for the consensus of people saying it has value and is not
directly redeemable for anything that does value. Unlike, cows,
iron,copper,gold, or promissory notes for them, which are the usual non fiat
currencies.

The fact that it doesn't depend on violence ought to tell you to stop blindly
parroting every single libertarian catch phrase you hear. They are not all
true.

~~~
smokeyj
Fiat currency typically means money declared by a government to be legal
tender. You can argue the value of bitcoin is arbitrary, but that doesn't make
it a fiat currency. Way to slam dunk a straw man.

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bachback
I find it fascinating that this invention is still not understood and when
then only through layers of tech. BTC allows transactions in a network without
a central party. that is it. the real question is why we haven't seen any real
major new use case, but for instance the new micropayment protocol points in
that direction. I believe there is a sort of tail end of this development
which will come much later. BTC is a kind of hackers utopia, because the whole
economy could be reshaped with code.

~~~
oscargrouch
> that is it. the real question is why we haven't seen any real major new use
> case

Because its ahead of its time..

When we got the first cars, what kind of road did we have back than? Roads for
horses and bandwagons..

Its the same with this centralized internet design.. and the ones that profit
the most with this design, wont do any move to change things in that

Did you see any Google product that its p2p? or Apple? or MS? why? an army of
smart people and none of them could create new products thats are not
proxyfied over their clouds, or make us dependent of them somehow?

Its the same Office Package model, just that its one from the age of
internet.. specially the ones that are "free"

~~~
bachback
Interesting. At the same time it took Ford to build cars. But perhaps we will
have new types of collectives instead of corporations. I think there could be
new types of systems of laws. So Bitcoin in the end could become something
like a protocol for software agents to act in the real world. Mike Hearn has
spelled some parts of this out. It's a bit of a shame that Satoshi didn't
write more, because these ideas were close to the original cloud of ideas.

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gmaster1440
There's been an increase in gwern articles on Hacker News recently, I like it.
Just curious why now?

~~~
gwern
Oh, that's easy: because I'm submitting them. More interesting is _why_ I'm
submitting them: I've long waffled on whether I should routinely submit my
stuff to HN because while one or two submissions did well, most of my
submissions sank without a trace. The obvious thing to do in this situation is
to test it out systematically, so for the past few days (and until such time
as I get bored with it or run out), I've been submitting 3 links a day: 1 link
to a good gwern.net article, and 2 links to non-gwern.net articles which I
liked a lot.

~~~
telephonetemp
Do you also submit your links at the same time of the day each day (when the
same part of the globe is awake, the rate of new stories is similar, etc.) or
do you vary the time? There have been several examinations of HN story
performance vs. timing (e.g., [http://nathanael.hevenet.com/the-best-time-to-
post-on-hacker...](http://nathanael.hevenet.com/the-best-time-to-post-on-
hacker-news-a-comprehensive-answer/)).

~~~
gwern
I submit them early in the morning as one of the first tasks. So the timing
isn't perfectly synchronized (I don't think it'll make a huge difference), but
they're all fairly comparable. Amusingly, this turns out to be pretty similar
to that post's recommended time.

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nly
I don't think I've ever seen such a comprehensive summary of opinion on
Bitcoin from so many different names inside what could easily be from the
digital cash chapter of a yet-unborn history textbook.

Zooko (known, to me anyway, for Zooko's triangle), Stefan Brands and Wei Dai
are all names I recognise from casual research on e-cash, and it's great to
see such a rich set of citations.

------
bachback
Couple of missing data points:

* the number of connected internet clients. compare the years 2008 and 2000. In the year 2000 the idea of Bitcoin would have been pie in the sky (although it would be an interesting thought experiment of alternative history of Bitcoin appearing during the INET bubble)

* eGold peaked in 2008

* bandwith. identification methods. opensource collaboration. we speak of the internet and the web but they are not constant through time.

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teashorts
Is there an actually usable RSS feed of the essays on the site? Importing
[http://www.gwern.net/atom.xml](http://www.gwern.net/atom.xml) into i.e. The
Old Reader gives me a feed of all changes to the site - not really what I
want.

~~~
gwern
Such an RSS feed can only be written in retrospect, after time has passed and
I know whether I'm done with an essay or not, so it doesn't exist.
[http://www.gwern.net/Changelog](http://www.gwern.net/Changelog) is probably
what you want.

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dbg31415
Hate the title.

~~~
gwern
Complain to rpg. He invented & named the concept, I'm just using it.

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cmccabe
Whenever I see the "worse is better" meme, I know I'm in store for a criticism
of some engineering decisions or other by someone who doesn't understand the
decision criteria. (And often, someone who was pushing an alternate solution
that failed because of this lack of understanding.) Engineering is more than
just implementing theoretical work. It's about making tradeoffs in the real
world.

