Sunday, March 26, 2017

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Bitcoin Minute

The Bitcoin Minute is produced by the World Bitcoin Network, a news channel dedicated entirely to Bitcoin.

World Bitcoin Network

For those who follow the motto of Groucho Marx and refuse to join clubs that want you as a member, a new form of ultra-exclusivity might suit you just fine.
Despite what users claim, Bitcoin is the new back alley club of finance with one hellava confusing address.
And this group of new exclusives wear nerd glasses and pocket protectors.
With their mining pools, hash rates, USB ASICs, and digital signatures these nerds have their computers yoked up and digging for geek gold.
And while it feels like monopoly money to many, a number of bitcoin nerds have already become filthy rich. As this confusing currency is making a play to unseat gold or even the dollar.
But don't get caught by surprise. Nerd domination is nothing new.
Even if we forget the recent history of nerd billionaires highlighted by Steve Jobs and Bill Gates, we don't have to dig too deep to find how nerds have commanded their fair share of history.
In fact two of the most powerful families of all time were double ledger number crunching geeks.
Much like bitcoiners today, the Rothschild and the Medici used secret codes and decentralized networks to amass some of the greatest fortunes in history.
Indeed, the Medici were so rich, they personally funded a good chunk of the Renaissance.
While the Rothschilds brought down Napoleon and dictated the outcomes of major wars.
But while the Medici and Rothschild were comfortable with their greed, today's nerds are playing a different game.
Modern geeks claim they are working with full transparency and using tools available to anyone.
Tell them they are running an exclusive club and they'll scream Bitcoin is open source, anyone can mine, and the server is run by the masses.
They ignore the fact the most of the world is not as tech savvy as they are and bitcoin is still years away from being as user friendly and accessible as they claim.
Worse, they conveniently forget the billions of people in underdeveloped countries who don't have reliable internet or even electricity.
They'll say bitcoin can function without phones or even computers, but that's like a bit like a jet-setter telling others that donkeys work just fine.
Given such poor access, its believed that 80% or more of the world's population still hasn't even heard of bitcoin.
Its a troubling situation given that this nerd mafia has already mined half of all future stocks.
Ask these hoarding geeks what the rest of the world will use and they'll tear into you, claiming that the bitcoin protocol allows for infinite divisibility.
There will always be enough.
While true, this argument paints over the fact that a tenth of a Satoshi might work great in commerce but it holds one billionth of the value of each of their Bitcoins.
Sure, a billion dollars and a penny are both liquid forms of currency but they do also define status & dictate powers.
So beware, of this nerd frenzy and don't just wait until understanding is clear. Because, sadly, that may never happen.
As the world catches up, the nerds are stocking up, creating an Ivory Tower of money.
And if all goes to plan, global nerd domination will repeat itself once again.
World power hand picked from the Usual Suspects...nerds.
Still its not yet too late.
If you want to join the party and you have trouble reading open-sourced code, perhaps we can recommend a new pair of glasses.
For some, these specs are making the future look very bright indeed.

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World Bitcoin Network

With the Forbes online article this week interviewing Rob McEwen, once again we are given a glimpse at Bitcoin's potential to unseat gold.
The billionaire head of McEwen Mining and previous owner of Goldcorp conceded that "it's a mistake to write off bitcoin as a bubble or fad."
And industry insider Naval Ravikant of AngelList goes further saying that "All the things that gold does, Bitcoin does better."
Leading some to the conclusion that bitcoin is "gold on steroids."
Indeed, Gold, the ancient currency was once prized for how easy it is to recognize and transport and how difficult it is to counterfeit. But in this global economy, the weight of gold is now its greatest burden.
Gold is a nightmare to transport and impossible to send over the internet.
While bitcoin has the very sci-fi aspect of brain storage, Bitcoins unlike any other money, can be stored just in your mind.
Clearly helpful if you're crossing government borders.
Further, modern counterfeiters have challenged the most pristine aspect of gold, with many recent forgeries being crafted with Tungsten, an element with nearly the same density as gold.
In a recent case in New York, hundreds of thousand of dollars were lost to complex tungsten-based gold forgeries.
Indeed, as Bitcoin appears entirely exempt from counterfeiting, its wider use could save billions in policing and loses from forgery.
Bitcoin and Gold are often compared in terms of scarcity. Creating true deflationary currencies.
But while new gold can always be pulled from the ground, Bitcoin has a hard limit of 21 million.
And once reached no more will ever be produced.
While its possible to subdivide each bitcoin into millions of units called Satoshi's to maintain its fluidity, even Satoshi's have a fixed and hard limit.
With all this, it appears that gold might be running into the same pitfalls that newspapers and music companies felt when hit by digital online alternatives.
It appears that with crypto-technology, for the first time in history, gold has finally met its match.
When it comes to inflation, transport, trust, counterfeiting, and usability, Bitcoin stacks up pretty good against the precious metal.
So... as gold prices tank in recent months, one can only wonder if Bitcoin's surge & Cyprus's troubles have anything to do with the fall.
And others have suggested that as Bitcoin's price multiplies ever higher...
bringing the masses into the fold, whether we are seeing the beginning of the world's first digital gold rush.

This piece was re-shot based on the original version "Bitcoin vs. Gold", 1 week ago. We re-shot and edited to fix some errata and include some updates.

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World Bitcoin Network

This Papa John's pizza might look like an ordinary delivery, but it seems likely to go down in history as the most expensive food of all time. And the date it was purchased, May 22nd 2010 could well mark the first shot fired in a major revolution in the history of economics.
This is because this pizza was bought for Bitcoins, and it is likely the first ever transaction ever made with the fledgling currency, which came to life in 2009.
Further when programmer Laszlo Hanyecz ordered the pizza in Jacksonville Florida three years ago, he purchased it with 10,000 Bitcoins. At today's exchange rate of approximately 120 dollars to one bitcoin that amounts to a current day price for the pizza of 1 million 2 hundred thousand dollars.
For historians, Laszlo's initial exchange can still be seen today on the bitcoin forum. He wrote:
"I'll pay 10,000 Bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later."
It seems impossible to imagine these days, as prices for Bitcoins have multiplied in value over 50 thousand times. This was recently highlighted by the bitcoin purchase of a Porsche in Austin Texas. The price here, just 300 Bitcoins.
Clearly, this leads us to a greater question. How far will the Bitcoins value soar. An answer that no one knows. Yet some pundits suggest that Bitcoins could swarm into the $60 trillion dollar international space for transactional currency.
Indeed if bitcoin even grabs a 1% share of this market, its value can be calculated to climb to a phenomenal 100 thousand dollars per coin. At that point, the pizza would be worth exactly 1 billion dollars. Too much? Its not clear. Laszlo ate well that night, and launched the once abstract coin into the world for the first time as a currency.

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World Bitcoin Network

With a tiny addition at the bottom of an obscure page on their website this week, eBay sent a swirl of excitement through the bitcoin community. By adding a section for virtual currencies, it seemed clear that eBay is making moves to embrace bitcoin. Immediately the bitcoin community went wild with activity, with many applauding eBay's move. But then, as quietly as the line was added it was removed.
Had eBay changed its mind? Was it a hack?
Its likely we will never know. But digging further reveals something even more elaborate. Around the same time, another page on eBay called DEALS released a well produced introductory bitcoin video. However, the 2 minute animation, is peculiar in its own right, almost like a two minute blurb of indecision, and it makes no comment whether eBay intends to go forward with bitcoins.
Still, eBay is no newcomer to the bitcoin world. This past May, CEO, John Donahoe made numerous comments hinting that Ebay might even begin to accept bitcoin as a form of payment, a move that many bitcoiners view as a potential windfall. Yet just by selling bitcoins on its site, eBay becomes a massive free-market exchange, and as such, an easy entry point for many into the bitcoin world. With the legal framework in place to avoid the pitfalls of startups like TradeHill and Mt. Gox, Ebay's entry into bitcoin would likely be smooth.
But, for eBay, the adoption of bitcoins presents one glaring problem. Ebay owns paypal. And bitcoin's acceptance could likely signal paypal's demise. So, if Ebay were to move forward with bitcoin, the auction giant would be sacrificing billions of dollars of paypal profits, a move they are likely not going to make any time soon.
And though, you can still buy and sell bitcoins on the site today, at enormous markups with some obvious risks, its not clear that eBay is doing anything more than just flirting with the enemy.

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World Bitcoin Network

In an overly sensationalistic piece yesterday, the New York Times reveled more about the level of NSAs commitment to prying into the lives of Americans.
This time, though the Times news agency, long suspect on technical matters, fell for NSA's own leaked bragadoccio.
In an internal document leaked by Snowden, the NSA claims to have cracked a number of forms of cryptography.
But this is where anyone familiar with cryptography takes issue. Cryptographers, a very small population indeed, took to the airwaves to note the ridiculous errors of the Times piece.
One wrote:
"Nobody, not even the NSA can arbitrarily crack anything.
Even if the NSA set every computer on the planet to work on brute-forcing an encrypted message, it would take millions of years."
He goes further.
"Instead, the NSA breaks in through less magical means, like demanding that data be handed over, stealing a key from a user, even having agents who physically pilfer data"
This is confirmed in a much more nuanced piece by Wired.
Wired states that the NSA cannot crack the algorithms that protect data, instead the Government organization relies on mobster-type tactics.
They pressure vendors, steal passwords and bully.
In fact both Wired and the Guardian covered the story without the confusion and fear mongering of the New York Times, with neither one suggesting that any modern cryptographic algorithms have been cracked.
For Bitcoin users this news will come as a relief.
Indeed, Bitcoin uses one of the most famous bits of cryptography, SHA. And SHA stands for Secure Hash Algorithm.
It is not only still secure today, it seems likely to be secure for a few million more years.
Still, ignoring the New York Times poor journalism, these new NSA revelations do matter.
We now know that Big Brother is doing doing much more than just watching.
As a result, we'll offer two words of advice for your bitcoins.
Cold Storage.

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