

Things I Think I Think on Bitcoin - sinak
http://daslee.me/10-things-i-think-i-think-on-bitcoin

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ISL
> 6\. I think that the FBI’s recent takedown of Silk Road, a black market
> whose primary currency was Bitcoin, was an inflection point. That the price
> of Bitcoin bounced back so quickly means that it’s being used for more than
> just illicit activity.

That's one interpretation, but there are lots of other reasons that may have
occurred. Speculators can do lots of curious things, as can those who might
benefit from perpetuating the idea that Bitcoin is stable.

~~~
baddox
> Speculators can do lots of curious things, as can those who might benefit
> from perpetuating the idea that Bitcoin is stable.

"Speculators" are the ones determining exchange rates. There is no other "true
value of Bitcoin in USD" that "speculators" are trying to conceal.

~~~
dllthomas
Those buying bitcoins to exchange them for goods and services have some
expectation about the amount of goods and services they will obtain, and the
"true value of Bitcoin in USD" is the value that reflects this (aggregated)
amount. Those buying bitcoin to hold in the hopes that it goes up eventually
don't care what goods and services they can get for bitcoins today, just how
the price will be moving tomorrow. The two types of behavior are not
unrelated, but distinction is meaningful.

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cottonseed
> unclear business model or applications

Bitcoin is not a business. But no applications?! How could you think this?
Fast and cheap money transfer without geographic restrictions? Immigrant
workers repatriating earnings? Low-cost online payment processing? I use money
every day and wish I had the same option online. Visa has ~$4B in earnings.
Western Union, ~$1B. Micro payments? (See reddit tip bot).

edit: Fixed earnings numbers. Current numbers are Shares*EPS for V, WU
according to Google Finance.

~~~
maxerickson
Your earnings numbers are way off. Visa does about $10 billion in revenues,
Western Union does $5-6 billion.

~~~
cottonseed
You're right. Math error. Fixed. Using Shares*EPS from Google Finance, I get
$4B and $1B, respectively.

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kaoD
> 3\. I think if you study Bitcoin, you realize that the currency is an
> application of the protocol. Bitcoin is actually a chain of digital
> signatures. Each “bitcoin” is just a ledger of all transactions of that
> “coin.” In other words, applications that have nothing to do with currency
> or payments (e.g., like Bitmessage) can exist.

I disagree.

Despite the name resemblance, Bitmessage is not really comparable with
Bitcoin. I think about Bitmessage more like Freenet for messages. It's just a
p2p temporary distributed datastore.

In fact BM has no blockchain and there's no concept of mining (which would not
make economic sense since you wouldn't get rewarded for it). Relaying messages
to get yours relayed is much cheaper, and messages get deleted after 2 days,
so there's no huge blockchain to maintain.

The real Bitcoin breakthrough was the blockchain and POW as an agreement
protocol, and I don't think that's applicable outside of currencies because
mining is very costly and the entire security relies on it.

~~~
jbackus
Actually there is a proof of work concept. You have to compute a partial hash
collision that is proportional to the size of the message you want to send.
The reason Bitcoin clients hold the full blockchain is to acheive distribution
and so that wallet balances can be computed by walking over the entire chain
and summing. Bitmessage only needs the distributed aspect so its partial
streams are good enough and less expensive for a user to get started.

~~~
kaoD
I'm aware of BM's POW but it's in no way related to Bitcoin's use of it.

Bitmessage's POW is not a way to reach consensus about a chain of events. POW
as a means to limit email spam messages was already proposed with Hashcash in
1997. BM just added a P2P distributed message database to provide
decentralization.

The POW was no breakthrough from Bitcoin either: IMO Bitcoin's core concept
(and the real genius) is the distributed agreement protocol, which is nowhere
found in Bitmessage.

That's what I meant with "POW as an agreement protocol", not just "POW", and
why I think Bitmessage does not really benefit from Bitcoin's protocol.

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drewblaisdell
> I think if I were in my early 20’s, looking for a startup idea and willing
> to do what the other person isn’t (e.g., move to a different part of the
> world), I’d spend all my time trying to understand this topic.

I don't understand this final item. Is this because the author thinks the US
is or will be hostile toward bitcoin, or because he thinks that it can thrive
more quickly in other parts of the world (like M-Pesa)?

~~~
javert
Can't speak for the author, but the US is hostile to all business.

~~~
reginaldjcooper
It's very welcoming to the large ones that have lobbyists.

~~~
javert
That is not business, it's pull.

The US is hostile to business as such.

