Thursday, April 18, 2013

A few more thoughts about Bitcoin and numeric values

Sorry to keep harping on this one topic, but I was reading the "Myths" page on the Bitcoin wiki and something struck me as kind of funny and strange.

Bitcoin has been compared to the gold standard, because the coins "exist" (so to speak) in limited supply. Indeed, believers in Bitcoin and believers in precious metal currencies seem to be the same people in a lot of cases.

But here's the interesting part: some of the arguments for Bitcoin openly undermine and negate the arguments for using gold and silver as currency. Check this out.

Wednesday, April 17, 2013

Further discussion about Bitcoin

My previous post about Bitcoin invited discussion, but much of that discussion took place on Facebook and Google+. A lot of good insights and links were offered, but brief messages on social media are hard to search and learn from in the future. So I'm writing a second post to acknowledge these responses, clear up some of the misconceptions I had in the first, and offer useful links for anyone who wants more information in the future.

Saturday, April 13, 2013

Open discussion on Bitcoin

I've been hearing a lot of stories lately about Bitcoin, and while I don't fully get it, I'm currently on the side of people who think it's ultimately going to wind up being a very technically innovative Ponzi scheme. I'm not making this post to argue about that. Realizing there are a lot of cheerleaders for Bitcoin out there, this post will be heavily moderated. Sales pitches for Bitcoin will not be approved, nor will posts calling me names, although pro-Bitcoin posters are welcome as long as they can contribute to explaining the either the technological details or the details of economic distribution. A lot of the purpose of writing this post is to foster some technical discussion and assemble my thoughts about how it works.

Bitcoin is an "alternative currency," which is something political Libertarians are always saying we need. It is meant to be decentralized, not controlled by any one government or individual. At the present time, one Bitcoin is worth around $100, down from a high last week of around $200. I am personally not particularly interested in getting involved with Bitcoin, either by trading my dollars for bitcoins and spending the bitcoins, or by speculating on buying low/selling high, or by mining for them. However, with my computer science degrees I'm mildly interested in working out exactly how the system works. I found a FAQ page, and I found the original technical paper by Satoshi Nakamoto, but I still don't have a full handle on it yet. Eventually I'm probably going to have to download the open source code and look at it, but I'm still trying to decide if that's worth my while.