The Committee on Economic and Monetary Affairs of the European Parliament spent an hour and a half discussing bitcoin and virtual currencies on Monday, although more questions were asked than answered.
#cryptocurrency #Bitcoin #blockchain
Let’s start by saying recent trends are not in favour of bitcoin. To cap things off, the media has been all over Mike Hearn’s exit, branding it quite a rage quit, but have left a lingering disruptive question – “Is bitcoin a failure?”
Claiming that bitcoin is a failure can be considered a tad one sided. However, as Mike Hearn put it,
“Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.”
I administer the Bitcoin P2P discussion group at LinkedIn, a social media network for professionals. A frequent question posed by newcomers and even seasoned venture investors is: “How can I understand Bitcoin in its simplest terms?”
Engineers and coders offer answers that are anything but simple. Most focus on mining and the blockchain. In this primer, I will take an approach that is both familiar and accurate…
First, forget about everything you have heard about ‘mining’ Bitcoin. That’s just a temporary mechanism to smooth out the initial distribution and make it fair, while also playing a critical role in validating the transactions between individuals. Starting with this mechanism is a bad way to understand Bitcoin, because its role in establishing value, influencing trust or stabilizing value is greatly overrated.
Continue reading “Bitcoin Primer: Don’t Start with Miners” »
Recently, I was named Most Viewed Writer on Bitcoin and cryptocurrency at Quora.com (writing under the pen name, “Ellery”). I don’t typically mirror posts at Lifeboat, but a question posed today is 
relevant to my role on the New Money Systems board at Lifeboat. Here, then, is my reply to: “How can governments ban Bitcoin?”
Governments can enact legislation that applies to any behavior or activity. That’s what governments do—at least the legislative arm of a government. Such edicts distinguish activities that are legal from those that are banned or regulated.
You asked: “How can governments ban Bitcoin?” But you didn’t really mean to ask in this way. After all, legislators ban whatever they wish by meeting in a congress or committee and promoting a bill into law. In the case of a monarchy or dictatorship, the leader simply issues an edict.
So perhaps, the real question is “Can a government ban on Bitcoin be effective?”
Suggests a mechanism to be adopted for any
cryptocurrency that would alter the fee layer to
help fund a new public good.
From ABIS concept
In 2013, following a period of reflection and visioning, I imagined the possibility of completely altering the financial system as we know it. This vision, known as ABIS, will now see its first-ever implementation.
The implementation is now being issued in BCN’s GUI Wallet with the release of v. 1.0.8, where the transaction has been re-envisioned to allow the user new ways to explore the possibilities of transactions and realize greater giving potential, initially through two use cases involving unique forms of donations:
Continue reading “A Greater Giving Potential: Introducing Micro-Donations in Bytecoin” »
Money is the primary mechanism for storing and exchanging value, especially in our daily purchases, and it’s heading rapidly into a faster, smarter and more mobile future. Nevertheless, the constant in the midst of change will remain levels of human trust in the proliferating forms of money. That’s because we have an ancient and abiding partnership with money and no relationship is ever sustainable without trust.
It’s a time of accelerated innovation in this field due to the rapid global expansion of digital banking, especially online and mobile financial services. However, while payments and transfer of money shift inexorably towards mobile devices as the consumer technology of choice, digital currencies expand in scope and number and online shopping begins to enter a golden age, cash is still the most successful and popular form of money ever. Its trust level, as public money backed up by a promise to pay from the government which minted and manufactured it, remains extremely high. This is evidenced by the way the Greeks turned to cash during their fiscal and monetary crisis which rocked the whole European Union, as well as by cash’s current 8.9% per annum average global growth rate. Cash is undoubtedly one of the most successful social technologies in history.
In short, the future of money will be mobile, faster in execution and settlement, and yet as heavily dependent on trust as ever. In my view, for that very reason, there’s unlikely to be a cashless world in this century. Nor is such a scenario desirable, unless you’re a fan of a Big Brother society largely dominated and dictated by multinationals more powerful than many national governments. A cashless world would subvert the economic freedom of citizens to choose the form of money and payment they want and, if that weren’t bad enough, it would lead inevitably to even further marginalisation of the world’s poor. Besides, cash is already universally trusted, instant in execution and mobile in nature (that is, just as portable as a smart phone).
That said, digital banking is here to stay and provides massive levels of convenience and efficiency. Financial institutions the world over are fiercely focused on developing omnichannel (“every channel”) strategies to provide seamless customer experiences across all their banking channels.
This short post is not about Bitcoin. It’s about a new method of organizing and arbitrating communications that is at the heart of Bitcoin
We hear a lot about the blockchain. We also hear a lot of misconceptions about its purpose and benefits. Some have said that it represents a threat to banks or to governments. Nonsense! It is time to form a simple, non-political, and non-economic explanation…
What is a Blockchain?
The blockchain is a distributed approach to bookkeeping. It offers an empowering, efficient and trusted way for disparate parties to reach consensus. It is “empowering”, because conclusions built on a blockchain can be constructed in a way that is inherently fair, transparent, and resistant to manipulation.
When my daughter was just starting primary school, she would look inside a book for the pictures before reading the text. She was old enough to read without pictures, but she wanted to get a quick synopsis before diving in. “Look, Dad! a bunny is carrying a giant clock into a rabbit hole.”
This is my first article without pictures. At least none of Bitcoin, because the copper coin metaphors are tired and inaccurate. At the user level, owning bitcoin is simply your stake in a widely distributed ledger. Ownership exists only as strings of secret code and public code. There is no physical coin.
Since the only pictures in this post show a white rabbit with a big clock, let me give you the quick synopsis: The answer is “No”. Bitcoin will not end government, nor its ability to tax, spend—or even enforce compliance.
But there is an irony: Most lawmakers and regulators have not yet figured this out. They perceive a great threat to their national interests. That’s why Andreas M. Antonopoulos runs around the world. He briefs prime ministers, cabinets and legislators with the noble purpose of demystifying and de-boogieing Bitcoin.
Continue reading “Will Bitcoin End the Reign of Government?” »
There’s an interesting insight on the possible reasons why the idea of decentralisation of money has gained friction over the past couple of years. What ignites its relevance to an age of drastic and fragile transition to digital forms? Apart from the technicalities and advantages of the use of asymmetric cryptography to substitute the way we transact articles of trade, digital currencies are a highly economic advancement. The mere traits of strengthened security a cryptographic hash entails have transcended just an innovation of technology, but rather become social and tangible assets (however volatile).
Analysts argue that cryptocurrencies are a purely technological progression, and that the Bitcoin ecosystem is filled with geeks who don’t understand the intricacies and idiosyncrasies of economics. That conclusion, of course, is a bit of an assumption, but the general populace can sometimes find the way cryptocurrencies are designed to be convoluted. For instance, Bitcoin evangelists have strived to make sure that the public knows how easy it is to deal, trade, and transact with digital currencies, exhausting alternative coins and minting new ones to target a specific niche of need and inspire interest. From that perspective alone, there is economics at work already with the cryptocurrency fashioning itself to satisfy an established demand.
For most of us, figuring out the value of something that we want, comes from research. If you want a new set of wine glasses, you check the price online. Perhaps you consult a catalog. If the set of 8 stemware goblets that you like are a current model from a major company, there are probably many places to buy them. If there are multiple Ebay sellers and many recently completed sales, then you can establish the value with precision.
I’ve written a lot of Bitcoin articles on this Lifeboat Blog and elsewhere, so, let’s dig a bit deeper this time. Let’s talk about from where value really comes.
Supply and Demand
In the end, an item’s value is a direct result of supply and demand. It’s no different with a currency. And let’s be clear: Despite a raging debate, Bitcoin is a currency and not just a payment instrument. How can I be certain? Try this mental exercise—
