It is curious, though, that it bears a micro-cost, even at a thousandth of a penny. I've often heard it said that BitCoin is unique as a currency in that the total quantity is inherently fixed; but in fact, it's destined to ever-so-slowly dwindle over time, whether due to public ledger uses, or the loss/destruction of private keys.
One-off transactions won't register as a blip, it's possible that some future use case might run at such a staggering scale (stock market micro-transactions?) that it leads to a financial tragedy of the commons and deflation runs rampant.
Not being doom-and-gloom, just an interesting thing to think about. Just as we now marvel at the naiveté of thinking that 4 billion IP addresses or 64K of RAM would be more than enough, I wonder if someday we'll look back the same way on the minimum transaction of 0.0000001 BTC.
Not really an exploitation, even Bitcoin's original whitepaper describes its blockchain as a "peer-to-peer distributed
The protocol already allows the creation of publicly verifiable contracts with creation/destruction mechanics that allow BitCoin to translate into a new currency. That puts the price of BitCoin as a ceiling for the new currency. The challenge is making it popular enough that the price of BitCoin is a floor as well.
In order for a transaction to enter the block chain, it needs to be relayed by bitcoin nodes and picked up by a miner who is willing to add it to a block.
Bitcoin nodes have criteria that need to be satisfied before they relay the transaction. For example, version 0.8.2 of the reference client will not relay transactions with outputs smaller than 0.00005430 BTC. There are also rules for calculating a minimum transaction fee, and a 15000 bytes/minute cap to the amount of free transactions relayed.
If your transaction isn't relayed, you can still circumvent this by connecting directly to a miner. But the miners have their own rules for prioritizing transactions and limiting block size.
What we need is a log-linear graph of a few things. The BitCoin production rate is ramping down exponentially, and everybody who gets interested in BitCoin makes BitCoin more interesting, so there is probably an exponential increase in both the value of BitCoin and the number of miners of BitCoin. Finally, the cost of the ASICs needed to mine BitCoin effectively are diminishing by Moore's law at an exponential rate.
Probably when you add these effects on a log-linear plot together, they add up to a straight line going slightly upwards; it's still worthwhile to join the network. But if you just think about it for a second, all of these could change. Moore's law can break down, interest can level off, miners' ambitions could skyrocket.
It is quite plausible that the line would shift downward and new people would stop coming in, and eventually the smaller groups would stop running their own BitCoin miners. The larger miners might even buy them up. When that happens one can certainly imagine that an oligopoly of more than 50% of the computational resources of the network emerges, which turns BitCoin into a centrally regulated currency.
I agree that if you're a consumer, Moore's law has less to do with BitCoin, but the whole point of the comment was stop looking from a consumer's perspective. From the point of view of a miner -- i.e. of the computational clusters which compete to make the ledger work -- Moore's law has plenty to do with BitCoin. The fact that the production rate is constant means that there's essentially a fixed-size "pie" in any given time-frame. The fact that electronics are becoming cheaper and better means that your investment of $X today can be matched by an investment of k $X tomorrow for some k < 1. The person who does that will eat up part of the pie, leaving less for you.
And why should you look at it from the point of view of the miners? Because the economic pressures on the miners determine whether the system eventually stabilizes into an oligopoly. If it does, then it can degenerate into a central-authority currency.
You just have to create the address in the same way in which Bicoin generates an address for a public key:
Using this hash is not any "less secure" than the plain SHA256 hash, because the RIPEMD160+SHA256 combination is used by the Bitcoin network itself. So if this one is broken, the Bitcoin network itself is broken, and your timestamps would be no longer trustable anyway.
But yes. I'm glad this is getting a lot more press. The discussion on the apparent value or its function as a currency are secondary. With any new technology, you are not just looking at its current functionality, but also the the functionality it can do that the old technology cannot.
As an aside: I can easily see this as a great compromise for DRM technologies. Both IP owner, licensee, and end-user give up a little power and control and vest that in a decentralized "public ledger".
I expect we'll see more discussions around over the next year or so as more people wake up to this possibility.
I've been on the sidelines watching a group of people try to hash out trust networks. Those really have not taken off. And I think they have not because the tokens used for trading trust don't have purchasing power for material goods the way Bitcoins does. I'm guessing that, while we may be tempted to just use the blockchain without the monetary use, the monetary use also makes each transaction like this matter a lot more. It might be possible that the very inefficiency is what allows the public ledger system to work at all.
In any case, I see much farther down the road where ... the big issue is not whether a nation-state actor's ability to issue currency is undermined by bitcoin, or even its ability to regulate it, but more that many other functions of government could eventually be expressed with Bitcoin or its technological successor.
Patents are interesting. What about real estate? Closing and transferring real estate takes a lot of paperwork, with mortgages enforced by powers of eviction and repossession.
I talked with a lawyer buddy of mine's about this subject a while ago. He tells me, the court system will be the last to convert over electronically. Legal papers have a gravitas associated with authority and control that is difficult to convert into electronic form.
Ultimately (and maybe not in this generation), wide-spread use of the public ledger will undermine deep-seated social conventions, emotional attachments, and notions we have about 'authority' and 'institutions.' Or maybe it'll be like the Millennials. All the folk who grew up in a time before wide-spread public ledgers die off; notions of central authorities becoming a quaint chapter in human history.
There already exists a service to prove the existence of a document before a certain date (much like the one in the blog post): http://www.proofofexistence.com/ Their implementation details are lacking but it should still be clear enough to get an overview. (Edit: I seem to have missed this link in the blogpost)
Besides hosting checksums, other types of data have been found in the blockchain, such as some Wikileaks content (http://www.thebitcointrader.com/2013/04/25mb-of-wikileaks-ca...) and even links to child porn (http://www.btcpedia.com/ped0-links-in-bitcoin-blockchain/).
To my knowledge there isn't any major government left that recognizes 'first to invent' anymore, only 'first to file'. So you probably haven't saved yourself anything.
While for Bitcoin, you can have a great degree of confidence that the blockchain up until now is legitimate. I suppose theoretically a >50% could take place, but even then, everything before that event could still be preserved and checked against.
Unfortunately, it didn't receive much interest from the HN community:
Go file a provisional patent! the patent regulations have changed since March 2013 from first-to-invent to first-to-file!:D
Assume that the notary public needs a 70watt light bulb to function (ignoring food costs, paper, etc). 8 hour day, so about a half kwh. That electricity with a new asic miner would get you about a half bitcoin, which would let you send 1000 messages of up to 1kb each, given the transaction fees.
I'm ignoring some things, but at the moment it seems to be quite the net-win.
Also: even if you fully trust your notary, it's no guarantee some random people in Japan, Australia or South America will trust him too. Anyone anywhere can verify blockchain, though.
We haven't hit the scaling limits of computation and are unlikely to for some time. But the scaling limit of a human is fixed at sixty minutes per hour.
However, you may be interested in these simple secure voting methods invented by cryptographers. (Google cache, site's down.) http://webcache.googleusercontent.com/search?q=cache:http://...