
Bitcoin – The Internet of Money - DanielRibeiro
http://startupboy.com/2013/11/07/bitcoin-the-internet-of-money/
======
sillysaurus2
This is very interesting:

 _Bitcoin has a scripting language which enables more than a “send money from
X to Y” transaction. A Bitcoin transaction can require M of N parties to
approve a transaction. Imagine Wills that automatically unlock when most of
the heirs agree that their parent has passed, no lawyer required. Or business
accounts that require two of any three trusted signatures to approve an
expenditure. Or wire escrows that go through when any arbiter agrees that the
supplier sent the goods to the buyer. Or wallets that are socially secured by
your friends and family. Or an allowance account accessible by the child and
either of two parents. Or a crowdfunding of a Kickstarter project that pays
out on milestones, based on the majority of the backers approving the next
payment. The escrow in each case can be locked so that the arbiters can’t take
the money themselves – only approve or deny the transaction.

The scripting language can also unlock transactions based on other parameters.
Unlocking them over time can enable automatic mortgage, trust, and allowance
payouts. Unlocking them on guessable numbers creates a lottery auditable by
third parties. One can even design smart property – for example, a car’s
electronic key so that when and only when a payment is made by the car buyer
to the seller, the seller’s car key stops working and the buyer’s car key (or
mobile phone) starts the car. Imagine your self-driving car negotiating
traffic, paying fractional bitcoin to neighboring cars in exchange for
priority._

I've been following Bitcoin since the beginning and had no idea it supported
"transaction approved only when M of N participants agree."

How do you feel about those scenarios? Also, does anyone know of other little-
known Bitcoin functionality?

~~~
gojomo
The scripting language vision has been there from the beginning, but parts of
it have been 'off' (in the reference client) because of incomplete
implementation, or concern that the implications and potential bugs aren't
sufficiently understood.

I wonder if a future Bitcoin offshoot might even use a more general standard
language for in-ledger transactions. Javascript? LLVM?

~~~
ssadler
They couldn't, because Javascript etc are turing complete, so you can't
predict if they're going to end (halting problem). With bitcoin you know that
the script will end and that the running time will correlate loosely with the
size of the script, so you can't really use it to mess up network nodes.
Butcoin scripts have no loops or goto.

~~~
gst
Actually you could. Just limit the max. number of instructions that are
allowed to be executed in order for a script to be valid.

~~~
nullc
Indeed, you can, but then you have a very exact requirement on exactly how the
interpreter is implemented which can never be optimized, and any disagreement
between implementations can cause a world ending consensus failure.

By not having looping or recursion script naturally gets an operation limit by
virtue of having a size limit, and this is _relatively_ easy to get right
between implementations. (Though, so far several of the alt implementations
have gotten it wrong).

------
zxcvvcxz
I feel so behind / left-out of the Bitcoin phenomenon. I thought it was a fad
a few years ago, but it seems as though it's here to stay and there are
probably good opportunities for those who understand how it all works. I was
wrong.

I want to start from the beginning and learn everything. What are the best
resources for this?

~~~
nilkn
I learned most of what I know directly from the original paper:
[http://bitcoin.org/bitcoin.pdf](http://bitcoin.org/bitcoin.pdf)

It's not too bad to read. Only the first six sections are really necessary to
understand how it works.

~~~
oscilloscope
Browsing Satoshi's mailing list and Bitcointalk posts is a good next step.

[http://www.mail-
archive.com/search?l=cryptography@metzdowd.c...](http://www.mail-
archive.com/search?l=cryptography@metzdowd.com&q=from:%22Satoshi+Nakamoto%22)

[https://bitcointalk.org/index.php?action=profile;u=3;sa=show...](https://bitcointalk.org/index.php?action=profile;u=3;sa=showPosts)

------
nayefc
> "They overlook that the world functioned on fixed money supplies until 40
> years ago (the gold standard)".

Classic example of why techies need to avoid talking economics.

~~~
freefrancisco
Naval was an economics major in college besides being a techie, so he is
certainly qualified to talk economics. You might not be aware that Keynes is
not the last word on macroeconomics, read something by Ludwig Von Mises to
round up your education.

~~~
nayefc
The issues that existed "until 40 years ago" were pretty obvious. I read a lot
by Ludwig Von Mises. And I am not Keynesian.

------
lingben
Much more likely, existing financial services and platforms will co-opt the
useful parts of bitcoin. The result will be a more robust solution on their
part and a casting of bitcoin into the pile of interesting historical
phenomena.

~~~
gojomo
Just like pre-internet online-services and publishers co-opted the best ideas
from it, relegating the internet itself into the pile of historical
curiosities.

~~~
legutierr
Don't be so cocky. In most of the US, where one or two ISPs rule over the
local market, the concept of a decentralized internet is at best a memory (if
it ever came to fruition there at all), and across the US the loss of network
neutrality is potentially only as far away as the next presidential election.

~~~
gojomo
Make your fears into a testable wager over a specific timeframe, and I'll
almost certainly bet against them.

Internetworking technology didn't need the help of DC to crush the walled
gardens of the past, and won't need anyone in particular in the White House or
FCC to continue its ascendancy.

------
nayefc
> "The country [USA] that is the home to the Internet of Money could one day
> end up as the guardian of the new Reserve Currency and the Global Money
> Supply."

We all know how that went / is going when that country is controlling world
politics.

------
crystaln
Anyone care to analyze the vulnerabilities of having scripting embedded in a
digital currency and bitcoin in particular? There must at least be some sort
of scams that this enables.

~~~
oleganza
In early version there was a bug with OP_RETURN operation allowing anyone to
spend anyone's coins without effort. This was fixed quickly.

------
marincounty
At least with Tulips your can save the dried pedals. Speculation in this won't
hurt the rich boys, but the salaried boys will be very limp. Oh, finance will
take the theories, and code--all for free. Too bad that Japanese guy didn't
patent the code, and the idea?

~~~
SwellJoe
Why would someone choose a bank-owned Bitcoin alternative over the distributed
Bitcoin? Would people rather pay more fees (my bank charges $40 for an
international wire transfer...I did the same with Bitcoin for about two
pennies, and that was a voluntarily paid feed)? Do people like having their
finances judged by faceless corporations, and if you don't keep enough of your
money in the bank, they fine you?

What are the advantages that make your idea of "finance will take the
theories, and code" seem plausible, to you? And, what would a patent have done
to improve on the situation for anyone?

~~~
blibble
ability to rollback fraudulent transactions?

the knowledge you'll get most of your deposits back if the bank goes bust?
(government mandated insurance schemes like FDIC/FSCS are really expensive for
banks... this makes up a big part of your bank fees)

the bank's capability to match up long term loans with short term deposits?

people really want a 25 year mortgage, but also want instant access to their
savings, the banks (mostly) match up these two incompatible goals: this is a
useful function

~~~
fat0wl
yeah thats kinda my beef with this stuff too. the transaction fees you pay
have a purpose its not just like banks declared they can steal from you.
Bitcoin doesn't offer these services, therefore no transaction fees.

and the transaction-scripting possibilities described in a lot of these
comments are interesting but why couldn't banks implement the same thing?
mainly because they are trying to protect you & intercept fraud etc.

My ideal version of Bitcoin is more like this -- you put money in the bank &
then it becomes crypto currency. You can pass it around as much as you want &
then at the end of the day if you ever want cash you submit coins to the bank
& get cash. It's so simple & negates a ton of Bitcoin's problems. But it's not
as romantic & get rich quick-y so the community will hate it. I think the
allure of the black market, "f__k the systemmm", and pyramid scheme is 90% of
why bitcoin is defended so intensely.

I think it's complicated legally though and that's why financiers want nothing
to do with it. After all, if banks told you you could go 0% transaction fee if
you incur some risk of losing your account altogether (if your wallet gets
deleted or an admission that they might steal it or that you'll have to sell
back your money at a new market price, plus the fact that you're entering an
imbalanced market where early adopters have greater hordes of wealth for the
same buy-in price) I think most customers would flat out reject it anyway.

It's also a very strange approach that a lot of the arguments take where they
claim that because of the distributed nature it's safer than dealing with
corporations. The Bitcoin network has its own points of failure (exchanges,
hello?) that users have gotten burned for trusting. They are establishing new
Gods, not eliminating the concept entirely. A public record does not mean that
the system has no possible points of fault. A big part of banking is
controlling these possible fault points to protect customers. As with lots of
corporate/gov services, they are trying to design it so that it is
strong/reliable/simple-to-use/stable.

Oh, and duh!! Lots of Bitcoin services (exchanges, transaction processors)
CHARGE FEES! It's only when it's floating around the ecosystem ether that it
is fee-less. If it gets to the level of everyday use, I'd wager there will be
as many protectionary fees as with USD except maybe in certain situations:
sending money to a friend, or a no-refunds type of transaction where
ordinarily you'd pay cash (which incidentally is more off-the-grid than BTC
would be at that point).

~~~
VMG
Happy to see you breaking your promise and return to Bitcoin :-)

The problem with your suggested system is that it introduces a mandatory third
party into all transactions, even where only two parties are desired. Bitcoin
makes that third party optional.

You're correct that there are fees, but these are much more flexible and
usually much lower than current fees (see international wire transfers).

~~~
fat0wl
ugh i know i just couldnt resist seeing how y'all would respond to the idea of
the Bitcoin bank. Well, granted they may _want_ to be a 3rd party to all
transactions but if the consumers really want a cryptocurrency they could set
up a system where it's all pseudonymous once the money gets in.

Basically what I'm describing is Bitcoin but instead the exchanges are banks
and without mining. The whole system would be pretty much the same beyond
that.

I basically think that mining was a trick used to help adoption, but it's a
big part of the destabilization of the currency. Forget banks if you don't
like the idea (I suggested them because deposits could be FDIC-insured). What
if the ecosystem started from scratch and Gox just inputted money 1-to-1?
$1000 = 1 BTC, and then if you need to print more BTC, just put more money in
the bank & raise the cap.

~~~
VMG
> I basically think that mining was a trick used to help adoption

Think again - mining is closely tied to a "proof of work", a guarantee that
the coins are not created out of thin air. That property is lacking from the
system you are suggesting. How do you prove that your "DollarPegCoin" is
actually backed by anything?

I agree that this has caused an inelastic supply and wild price fluctuations,
and these will continue, but it serves an additional purpose besides being an
adoption incentive.

