-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 On 04/01/2013 05:30 PM, Yosem Companys wrote:

Hi all,

I'm one of the coordinators of the Program on Liberation Technologies at Stanford University, where we study and design technologies that can be used to promote the public good, including democracy, human rights, freedom, and development, among others.

Good! Perhaps you will have something to say about a matter I've been turning over in my head lately! I'm interested in Bitcoin. Why? Because I think there's a lot of inefficiency and injustice in the way traditional financial systems (banks, currencies, and markets) are built: they're heavily centralised and monopolised and entangled with politics and other vested interests. But I'm far from certain that Bitcoin will be a panacea here. Precisely because it is decentralised and purely under the control of dispassionate algorithms, it is open to different kinds of abuse. The initial distribution is hardly "fair" (no matter how you define fair), although I don't think a better distribution mechanism could have been defined; but will it even out with time? Or will we find new centralisation, in the form of important market functions (eg, the kinds of roles that banks fill) being monopolised by the few who have the capital to run them? There's a centralisation risk in the mining power being monopolised; somebody who controls more than half of the computational power in the mining network, for instance, could just write their own rules (creating bitcoins out of nothing or stealing bitcoins from other people, for a start). There's also a danger of governments stepping in and regulating Bitcoin in ways that make it a slave to the incumbent financial system. But there's also the chance for truly independent economic institutions to form, fighting each other for trust and market share by actually competing, with reputation being the most important capital, meaning that anyone with a good idea can implement it and earn from it; and reduced transaction fees and censorship making it easier to do business from developing economies (look at how PayPal blacklists entire countries); and stuff like that. So what can nerds like me do to try and make sure the world gets the benefits of a decentralised currency, and that good outweighing the costs of it being used for tax evasion, trading in unethical things, or ending up ensnared by central control in one way or another?

Yosem

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