This invention is much more transformative than a mere payment network for the Internet age.
This is the last of a five-part series. Read here the first, second, third, and fourth parts.
Using Bitcoin today as a common currency is nonoptimal because transaction costs are too high. Price remains erratic, liquidity is insufficient, and, in many cases, throughput, confirmation times, and fees result in significant obstacles.
Technology will address usability by allowing for greater capacity and improved user experience. But, volatility can only recede with increased adoption, which requires Bitcoin to be desired, to be demanded as cash balances, and to be held. …
Or, can Bitcoin exist solely as a store of value?
This is the fourth of a five-part series. Read here the first, second, and third parts.
The conflicting views of Bitcoin as primarily a SoV or a payment mechanism have existed since the beginning. Although one is entirely free to use Bitcoin just for payments and nothing else, someone still needs to provide the demand to hold it. As already argued above, if no one is willing to hold, then its value cannot be sustained. For this same reason, any cryptocurrency designed with the sole purpose of functioning as a MoE — without regard for its programmed scarcity — is…
So it can be more demanded and eventually become a natural medium of exchange.
This is the third of a five-part series. Read here the first and second parts.
For Bitcoin to be perceived as a good SoV, the marketplace must understand and trust the soundness and resiliency of its value proposition as laid by the protocol’s core properties and rules. The immutability of its monetary policy (i.e., the hard cap of 21 million or 2.1 quadrillion satoshis) is a distinctive example of a protocol rule, along with its paramount (and paranoid) security and decentralization, all of which reinforce each other.
Solid protocol development means safeguarding these core properties through strict rule adherence. Developers…
Technology and time will allow it to be used as such.
This is the second of a five-part series. Read here the first part.
The first part of this series covered the economics of money and its evolutionary stages. It also demonstrated how the willingness to hold cash balances is what gives money value. However, this is not meant to be a case against Bitcoin’s use in commerce nor a defense for it to be solely a SoV never to be used in exchange. Of course, and absolutely not.
But, I do think that trying to use Bitcoins (or any other cryptocurrency) today in everyday commerce makes little sense due to…
The title of this article is not clickbait. Well, kind of. Perhaps a more precise title is “Why using Bitcoin as a medium of exchange now is senseless, but if we manage to make it a good SoV, then it will naturally be used as a medium of exchange in the future.”
This is the first part of a five-part series.
At present, it is misguided to focus on the act of “spending Bitcoin.” Instead, we must strive to encourage people to “earn Bitcoin” and “be paid in Bitcoin.” These are just the opposite sides of the same coin, and it may seem I am playing with semantics. However, I contend that the economic and technical consequences of stressing one viewpoint (to spend) over the other (to earn) are profound and irreconcilable.
The scalability controversy surrounding Bitcoin has given rise to many subordinate and parallel discussions, which is precisely how the topic…
Co-authored with Matthew Mezinskis
One of the hallmarks of a nascent industry is a lack of widespread consensus regarding concepts, definitions, terms, and nomenclatures. Perhaps in no other field is this more evident than in the current state of blockchain.
Regulators worldwide are wrapping their heads around the new technology, the inner-workings of distributed consensus protocols, all attempting to arrive at a definition for this new asset class. Lawyers, too, seek to understand and classify objects which have no pre-existing classification. …
This is such a fantastic talk by Dr. David Clark, one of the inventors of the internet (IP, internet protocol) at Oxford University in 2006.
So many great parallels with #Bitcoin development today. You can find some quotes and takeaways from the talk below:
Regarding the internet being theoretically impossible “several people at the time had mathematical proof that [packet switching] could not work”.
Regarding internet addresses being deliberately too small “If you build a fast ugly system everybody who uses it will criticize how ugly it is. …
In light of the recent initiatives to implement changes to Bitcoin’s protocol, the present signatories — representing the main exchanges, companies, service providers, and hundreds of thousands of users in the region, hereby collectively denominated as the “Brazilian and Argentinian communities” — wish to voice their deepest concerns over the upcoming November hardfork as mandated by the so-called New York Agreement (“NYA”), also known as SegWit2x (“S2X”).
As enthusiasts, entrepreneurs, developers, businessmen, it is our belief we all share the same goal of making Bitcoin succeed and fulfill its huge potential as a disruptive technology, allowing for greater financial freedom…
A New York Times’ reporter travelled back in time to interview Satoshi Nakamoto in 2010, the year which marked his invention’s first anniversary:
NYT: So, Mr. Nakamoto, I’ve just arrived from 2017 and, boy, you have no idea all the fuss going on, and it’s all your fault! Your invention is rocking! Everyone’s talking about it! From Silicon Valley to Wall Street, it’s the hottest technology right now. How do you feel about having created something so revolutionary?
SN: Flattered and surprised. I knew I was designing something disruptive and innovative, but never imagined bitcoin would have this level of…
