bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)

[Bill Stewart]

At 05:43 PM 11/25/2013, David Vorick wrote:
>Bitcoin has a lot of problems.
>Andy, the problem isn't the denomination, the problem is that 
>Satioshi has 5% of all the currency, and the Winklevoss twins have 
>another 0.5%. If bitcoin becomes worth 100 trillion dollars, they've 
>got a solid 500 billion for being nobody and doing nothing. That's a 
>problem to me.

Satoshi gave us the technology and got people to start using it.  If 
he gets fabulously wealthy by owning 5% of it, I'm not jealous (well, 
ok, a bit jealous, but I'm not going to contend that he shouldn't 
have it just because of jealously.)
The Winklevossen are just speculators; I don't particularly like 
using a currency whose value is mostly from speculation, but 
experimentation is a critical part of rolling out something like a 
new type of currency, so whatever.  At least they pumped some cash 
into the system early on.
And that guy in Norway who was an early experimenter, then kind of 
forgot about his bitcoins until he suddenly noticed they were worth 
$800K?  Cool, good for him!
It wouldn't be surprising if the first people to do GPU-based mining 
also got a large pile of bitcoins compared to the CPU-based miners.

>I'm working on one right now. It's not built but the idea is to use 
>proof-of-contribution instead of proof-of-work, where contribution 
>is disk storage contributed to a distributed network.

I think "proof of useful contribution" is a much better thing than 
"proof of wasted electricity"; good luck getting it off the ground.
I'd recommend reading all of Zooko's Tahoe-LAFS work for getting some 
ideas about privacy and reliability issues, both of which are harder 
than they look.
The other catch is that storage costs do keep decreasing, and storage 
in a cloud is always a lot slower than local storage, so you'll have 
to think hard about business models.

One of the cool things Bitcoin did was created a way to have the 
proof-of-work turn into currency without needing a banker in the 
middle; that means that users and miners don't have to worry (much) 
about the creator absconding with the value or being shut down, and 
there's built-in protection against hyperinflation, unlike some of 
the dotcom silly currencies like Beenz and Flooz that appeared and 
vanished along with the dogfood-on-line dotcoms.  It's been 
interesting to watch Bitcoin's value surviving after the loss of the 
Silk Road site (which got around the "Nothing To Buy With It" hurdle 
that helped kill the original Chaumian Digicash.)