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B I T C O I N I S M

thoughts on bitcoin and the future digital economy
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  • Justus Ranvier
mining

What is mining, why do we need it, and how much is enough? Jun 26, 2015

According to most sources on the topic, the security of the Bitcoin network is provided by the amount of hashing performed, a.k.a proof of work. The amount of proof of work the network performs has steadily grown over the lifetime of Bitcoin, and we have no reason to assume that this growth will end in the near future.   The growth in the hash rate must end eventually, however. Once this happens, will Bitcoin continue to be secure? How much proof of work does Bitcoin actually require? In order to answer these questions, this article explores the problem which proof...

By Justus Ranvier Vote5 0
scaling_bitcoin

Scaling Bitcoin to Its First Billion Users and Beyond Mar 9, 2015

Is it possible for a single decentralized blockchain to scale to a billion daily users?

By Justus Ranvier Vote5 0
price_discovery

Economic Fallacies and the Block Size Limit, part 2: Price Discovery Feb 9, 2015

The Bitcoin protocol currently has a block size limit that allows only 1 MB of transactions every 10 minutes. This arbitrary limit means that Bitcoin can handle no more than 7 transactions per second, which is nowhere near the scale it will need in the near future (and especially not the scale it will need in the long term to remain the dominant cryptocurrency). The block size limit should be removed, but first, the Bitcoin peer-to-peer (P2P) network needs price discovery built directly into it. This is a prerequisite to safely removing the block size limit and allowing Bitcoin to...

By Justus Ranvier Vote9 6
scarcity

Economic Fallacies and the Block Size Limit, part 1: Scarcity Jan 21, 2015

The average size of a block is approaching the 1 MB protocol limit for the first time in Bitcoin's history, and not everybody agrees regarding what to do about it. Many objections to raising or removing the block size limit are based on misunderstandings about the nature of economic scarcity and the operation of markets in general.

By Justus Ranvier Vote30 11
darksword

With Apologies to Margaret Weis and Tracy Hickman Aug 5, 2014

There will be born to the cypherpunks a currency that is unbacked yet will retain value, that will crash again and bubble again. And when it hypermonetizes, it will hold in its blockchain the destruction of the world ...or its salvation.

By Justus Ranvier Vote4 2
atm

How and Why to Build an Unbanked Bitcoin ATM Jul 29, 2014

Bad news in the Bitcoin ATM space from New Zealand: Unfortunately, despite complying with all the legal requirements we have been unable to secure banking facilities. Without these the Bitcoin ATM business cannot operate long term. The negativity from the banking sector to Bitcoin also threatens the ATM owner's other businesses. For me it is prudent to shut the ATM down. If you have any interest in purchasing a second-hand bitcoin ATM with compliance documents. Please get in touch. This follows a trend where eager startups set out to "do things right" and follow all the rules, only to discover...

By Justus Ranvier Vote24 3
enhanced_due_diligence

re: Enhanced Due Diligence Jul 8, 2014

Frankly, Coinbase is turning into a worst kind of fascist dictatorship. Not only are their services unreliable (many people reported their bitcoin purchases being reversed, or their out withdrawals not going through). Now they have new AML/KYC policies in place which are the opposite of everything bitcoin stands for. And their enforcers have already started profiling their customers using KYC pretext, and refusing services to anyone they don't like.

By Justus Ranvier Vote14 3
black_market

Only the Black Market Matters Jun 30, 2014

The informal economy will grow from 1/3 to 2/3 of the global workforce over the next six years. Bitcoin's focus should be there.

By Justus Ranvier Vote21 4
open_transactions

Cash and Credit in a Cryptocurrency Economy, part 2 – Open-Transactions Jun 26, 2014

Open-Transactions is the cypherpunks' vision of a cryptography-based contract system, embodied. Even when cryptography has made base money far more useful than in the past, cryptocurrency alone can not meet the requirements of an economy. Open-Transactions fills in many of these gaps by providing a secure cryptographic foundation for representing smart contracts.

By Justus Ranvier Vote5 1
legacy_finance

Cash and Credit in a Cryptocurrency Economy, part 1 – The Legacy Financial System Jun 20, 2014

The success of Bitcoin has created the possibility for an new free market, cross-border, online economy with Bitcoin serving the role of base money (cash). There's certainly room for optimism on this point, however it's not going to do it alone. Cash by itself is not enough to meet all the needs of an economy, so building that future economy will require additional supporting technologies. Open-Transactions is one of those supporting technologies, and the this article will explain how and why it fits into the new economy we are building.

By Justus Ranvier Vote7 0
sedition

Bitcoin Is Sedition Jun 11, 2014

The Reaction Ever since the venture capital scene started talking about Bitcoin back in 2013, one of the most frequently cited comments from them is that Bitcoin is interesting for the technology, not the currency. In fact, this  mantra has become so common that it almost sounds... scripted. https://www.youtube.com/watch?v=Hh_Kx7UKndI The Problem What's going on here? Apparently millions of Bitcoin users around the globe never got the word that Bitcoin isn't interesting as a currency.   If Bitcoin wasn't interesting as a currency, then why would the banking system need to go to such lengths to slow down the capital flight...

By Justus Ranvier Vote36 9
dirty_deal

Dirty Deals in Smoke-Filled Rooms Apr 23, 2014

A Modest Proposal Mike Hearn recently proposed a change to the Bitcoin protocol on the bitcoin-development mailing lists. For those who are not subscribed, this is what he suggests: Lately someone launched Finney attacks as a service (BitUndo). As a reminder for newcomers, Finney attacks are where a miner secretly works on a block containing a double spend. When they eventually find a block, they run to the merchant and pay, then broadcast the block. In a simpler variant of this attack you make purchases as normal with a modified wallet that always submits a double spend to the service,...

By Justus Ranvier Vote0 0
intervention

Decentralized Applications: It’s Time for an Intervention Mar 19, 2014

Disruptive. Web scale. 2.0. Viral. Big data. Crowdsourced. Cloud.Everyone has their favorite tech buzzwords they love to hate, but few people stop to think about the lifecycle of a buzzword. Usually these terms start out with a specific meaning. Then the ones that become popular cast off this meaning and emerge like a butterfly from its cocoon into a new usage where the word has become its own brand. Buzzwords then flourish for a while until they mature into a cliché. Once a cliché has achieved peak annoyance, marketing campaigns begin to abandon the buzzword and it dies a quiet...

By Justus Ranvier Vote4 1
sharks

There’s Blood in the Water, and the Sharks are Circling Feb 25, 2014

The next of Mt Gox's failure is barely 12 hours old, and already regulators and their allies have pounced on the opportunity to feast on the corpse. "I think a regulatory solution would do more to increase ordinary consumer confidence in Bitcoin and its institutions than one that is purely market driven or industry led. I am well aware of all the challenges that regulatory solutions have, but if Bitcoin is to become a mass market product, then it will require a measures to lift confidence from those who will not understand a technology solution that their BTC is safe. I advocated...

By Justus Ranvier Vote2 0
sold_out

Did You Get a Good Price When You Sold Out? Dec 30, 2013

This week we've learned of yet another outrage perpetuated by the NSA. Given the history and probable course of the Snowden leaks, I am confident the previous sentence will continue to be true for quite a while into the future. Every time the outrage begins to die down a bit, we learn there's even more going on. Each revelation is worse than the prior.Yet at the same time all eyes are on the NSA, we're ignoring something very important. The NSA is a relatively small organization. They could not and did not do what they have done without help from...

By Justus Ranvier Vote3 0
lex_cryptographia

Lex Cryptographia Dec 9, 2013

Introduction The Past In the eleventh and twelfth centuries, increases in agricultural production and urbanization led to a new rise of a new professional merchant class who traded within and among towns and kingdoms. Customary law by this time had grown localized, so the merchants needed a universal body of law in order for trade to function on inter-regional levels. This began with a recognition of common customs that already existed, and from there merchants began experimenting with their own contract law, where contracts themselves were the source of law. Because contracts require voluntary entry, objectivity and impartial recognition and enforcement...

By Justus Ranvier Vote6 0
voting_pool

Voting Pools: How to Stop the Plague of Bitcoin Heists, Thefts, Hacks, Scams, and Losses Dec 6, 2013

In July of 2011, the owners of popular web wallet service and payment processor MyBitcoin.com absconded with all customer funds, almost 79 thousand bitcoins, and disappeared. In March of 2012, several sites hosted with Linode were hacked, including leveraged trading platform Bitcoinica, mining pool Bitcoin.cz, Bitcoin Faucet, and several other sites. A total of about 47 thousand bitcoins were lost. Two months later, Bitcoinica was hacked again and lost another 19 thousand bitcoins, causing it to shut down. Two months after that, someone stole 40 thousand bitcoins from Bitcoinica's Mt Gox account, 30% of their remaining assets. In September of...

By Justus Ranvier Vote0 0
boycott

Is It Time to Boycott All US Bitcoin Companies? Nov 13, 2013

As of today, the efforts of Bitcoin Foundation and others who have told us that Bitcoin should be altered to make it more acceptable to the regulatory apparatus has finely bore fruit. A group of investors announced Coin Validation, a service designed to remove all possibility of financial privacy for Bitcoin users. This service will work by asking Bitcoin businesses to voluntarily (at first) violate their customer's privacy by providing them with a list of every bitcoin address known to be associated with that customer. The list will be used to create a database of "clean" addresses, where clean means...

By Justus Ranvier Vote2 0
censorship_resistant

Censorship-Resistant Business Models Nov 13, 2013

Notwithstanding all the good news and progress that’s occurred in the last six months, in many ways 2013 has been a bad year for Bitcoin businesses. As Bitcoin has moved closer to mainstream awareness, the companies that are working to build the fledgling Bitcoin economy have struggled to add capacity in the face of overwhelming demand and at the same time an increasing amount of their time, attention, and financial resources have been sapped by the demands of regulatory compliance as well as overcoming hostility from existing players in the financial sector. Many services like Bitfloor, Tangible Cryptography, and Bitspend...

By Justus Ranvier Vote2 0
sword_of_damocles

Trust No US Companies With The Future Of Bitcoin Aug 15, 2013

I would strongly recommend against anyone trusting their private data to a company with physical ties to the United States. --Ladar Levison Secure email providers Lavabit and Silent Circle have taken the heroic steps of shutting down their businesses in order to preserve their integrity. Unfortunately the definition of heroism necessarily implies that their actions are heroic because they are unusual. Their actions surprised us because most companies, when faced between choosing between continued operation and honoring the trust their users have given them, toss integrity aside. Even though Levinson was speaking in the context of communication providers, his words...

By Justus Ranvier Vote3 0

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