Blockchain tech in general

Tutorials / Explanations

Blockchain Demo
- Great, great explanation.
IBM - What is Blockchain?
2017.09.28 - IEEE Spectrum - Blockchains: How They Work and Why They’ll Change the World
- rec'd by John O'Nolan here
2017 - Berkely DeCal - Blockchain Fundamentals
2017.09.24 - HackerNoon - Learn Blockchains by Building One

Advocates

Balaji Srinivasan
- Twitter - @balajis

Bitcoin

Wikipedia

Online communities

Stack Exchange - Bitcoin
Reddit

Hal Finney

2014.03.25 - Forbes - Nakamoto's Neighbor: My Hunt For Bitcoin's Creator Led To A Paralyzed Crypto Genius
- This article makes it seem pretty clear that Hal Finney is Satoshi Nakamoto.
2017.10.20 - Twitter - Nelson Rosario - "Satoshi Nakamoto died with Hal Finney"

https://news.ycombinator.com/item?id=15134670
- rec'd by patio11 here

Tutorials

2013.12.06 - Michael Nielsen - How the Bitcoin protocol actually works

Arguments in favor of Bitcoin

Stack Exchange - Bitcoin - What are the problems with normal currency that may be solved by using Bitcoins?
2014.01.21 - NYT - Marc Andreessen - Why Bitcoin Matters
- Critics of Bitcoin point to limited usage by ordinary consumers and merchants, but that same criticism was leveled against PCs and the Internet at the same stage. Every day, more and more consumers and merchants are buying, using and selling Bitcoin, all around the world. The overall numbers are still small, but they are growing quickly. And ease of use for all participants is rapidly increasing as Bitcoin tools and technologies are improved. Remember, it used to be technically challenging to even get on the Internet. Now it’s not.
- Why would any merchant – online or in the real world – want to accept Bitcoin as payment, given the currently small number of consumers who want to pay with it? My partner Chris Dixon recently gave this example:
  “Let’s say you sell electronics online. Profit margins in those businesses are usually under 5 percent, which means conventional 2.5 percent payment fees consume half the margin. That’s money that could be reinvested in the business, passed back to consumers or taxed by the government. Of all of those choices, handing 2.5 percent to banks to move bits around the Internet is the worst possible choice. Another challenge merchants have with payments is accepting international payments. If you are wondering why your favorite product or service isn’t available in your country, the answer is often payments.”
- In addition, merchants are highly attracted to Bitcoin because it eliminates the risk of credit card fraud. This is the form of fraud that motivates so many criminals to put so much work into stealing personal customer information and credit card numbers.
  Since Bitcoin is a digital bearer instrument, the receiver of a payment does not get any information from the sender that can be used to steal money from the sender in the future, either by that merchant or by a criminal who steals that information from the merchant.
  Credit card fraud is such a big deal for merchants, credit card processors and banks that online fraud detection systems are hair-trigger wired to stop transactions that look even slightly suspicious, whether or not they are actually fraudulent. As a result, many online merchants are forced to turn away 5 to 10 percent of incoming orders that they could take without fear if the customers were paying with Bitcoin, where such fraud would not be possible. Since these are orders that were coming in already, they are inherently the highest margin orders a merchant can get, and so being able to take them will drastically increase many merchants’ profit margins.
- A third fascinating use case for Bitcoin is micropayments, or ultrasmall payments. Micropayments have never been feasible, despite 20 years of attempts, because it is not cost effective to run small payments (think $1 and below, down to pennies or fractions of a penny) through the existing credit/debit and banking systems. The fee structure of those systems makes that nonviable.
  All of a sudden, with Bitcoin, that’s trivially easy. Bitcoins have the nifty property of infinite divisibility: currently down to eight decimal places after the dot, but more in the future. So you can specify an arbitrarily small amount of money, like a thousandth of a penny, and send it to anyone in the world for free or near-free.
  
  Think about content monetization, for example. One reason media businesses such as newspapers struggle to charge for content is because they need to charge either all (pay the entire subscription fee for all the content) or nothing (which then results in all those terrible banner ads everywhere on the web). All of a sudden, with Bitcoin, there is an economically viable way to charge arbitrarily small amounts of money per article, or per section, or per hour, or per video play, or per archive access, or per news alert.
  - Another potential use of Bitcoin micropayments is to fight spam. Future email systems and social networks could refuse to accept incoming messages unless they were accompanied with tiny amounts of Bitcoin – tiny enough to not matter to the sender, but large enough to deter spammers, who today can send uncounted billions of spam messages for free with impunity.
- Finally, a fourth interesting use case is public payments. This idea first came to my attention in a news article a few months ago. A random spectator at a televised sports event held up a placard with a QR code and the text “Send me Bitcoin!” He received $25,000 in Bitcoin in the first 24 hours, all from people he had never met. This was the first time in history that you could see someone holding up a sign, in person or on TV or in a photo, and then send them money with two clicks on your smartphone: take the photo of the QR code on the sign, and click to send the money.
- Ben S. Bernanke, formerly Federal Reserve chairman, recently wrote that digital currencies like Bitcoin “may hold long-term promise, particularly if they promote a faster, more secure and more efficient payment system.” And in 1999, the legendary economist Milton Friedman said: “One thing that’s missing but will soon be developed is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A – the way I can take a $20 bill and hand it over to you, and you may get that without knowing who I am.”
  - Does PayPal meet the test Milton Friendman defined? In 1999 PayPal was just getting started. Even if you need the other person's email address to send money with PayPal, that doesn't necessarily tell you who the person is.
2017.09.22 - WSJ - The Blockchain Is the Internet of Money ← Interview with Balaji
- He has, in the past, invoked the notion of the “inverse Amish,” a society that “lives nearby, peacefully, in the future,” where “we can experiment with new technologies without causing undue disruption to others.”
- When I ask him to explain the “blockchain,” Mr. Srinivasan starts to roll with relish. “Short version? Bitcoin is a way to have programmable scarcity. The blockchain is the data structure that records the transfer of scarce objects.”
- I ask him to regard me as a dummy, and to give me the longer version.
  We can understand bitcoin and blockchain in four steps, he says. “One, cash. When A gives a dollar bill to B, he’s transferring a physical object. B has it, and A no longer does. There’s implicit scarcity in the physical world.”
  Step 2 supposes that we treat the serial numbers on those Federal Reserve bills as “a form of naive digital cash. Then A emails those numbers to B. Now B has a copy. But A still has a copy!” So if those serial numbers were treated as cash, A can “double-spend” the numbers by sending them to another party, C. This, Mr. Srinivasan says, is the fundamental issue with digital cash: “the double-spend problem. How do we introduce scarcity into the digital system?”
  The way we resolved this problem before bitcoin, Mr. Srinivasan explains in his third step, “was through the use of centralized institutions called banks. Whenever you use PayPal or a similar technology to send money from A to B digitally, the bank is trusted to debit A and credit B.” This, he says, is how “scarcity” is introduced into a digital system; but it is “inelegant, from a computer-science perspective, to have a central, trusted node in any networking topology”—a word my dictionary defines, in this context, as being the way in which constituent parts are interrelated or arranged.
  Mr. Srinivasan doesn’t care for this arrangement: “There are downsides to implicitly trusting banks, as the 2008 financial crisis showed.” So rather than require a bank to approve transactions, “Bitcoin figured out how to split this power across many different transaction approvers, called ‘miners.’ ” They “compete to approve transactions and integrate them into the so-called blockchain. Every time they integrate a new block of transactions into the blockchain, they receive a ‘block reward’ and are entitled to print digital currency.” The key point, he says, is that any computer could, in theory, approve transactions, and no single computer could block transactions.
  Mr. Srinivasan concedes it’s “a big claim” to say the blockchain is the most consequential technology since the internet. “The internet is programmable information. The blockchain is programmable scarcity.” He elaborates: “All of these previously disparate things—from physical mail to television to music to movies to telephony—basically got turned into packets of information and got remixed by the internet. Plus things that we normally didn’t even think of as information—your Fitbit , your steps, your Facebook settings—became programmable.” It’s fair to say, he continues, “that the internet and all things downstream—search engines, social networks, ride sharing, and so on—have basically been the technological story of the last 25 years.”
  The blockchain is the next phase, Mr. Srinivasan says with some zest. “With the blockchain, everything that was scarce now becomes programmable. That means cash, commodities, currencies, stocks, bonds—everything in finance is going to be transformed, and aspects of finance baked into everything else.” By way of example, Mr. Srinivasan suggests that there could be “a spot market for the cost of storing one megabyte on 1,000 remote computers.” He then offers a slogan for the new age: “If you deal with information, you need the internet. If you deal with money, you need to deal with blockchains.”
- Comments
  - This is brilliant, and brilliantly reveals the flaw in BitCoin:
    The blockchain [...] “is a religion that works. [If 10,000 people] close their eyes hard and say, ‘Let this thing have value,’ and they all value it, [... their] belief [... becomes] something you can now materialize into currency.”
    ~
    Mr. Varadarajan helpfully understands that "that the fix is in. . . . The state is against you", but he fails to understand that the state also is (or could be) with you.
    Like the Amish — which is a pacifist society dependent upon a militantly defended and sometimes violently policed state to defend its freedom-of-religion — his utopian techie paradise trades in a money ultimately based on faith in ...
    In what?
    In that militantly defended and sometimes violently policed state that defends its [Bitcoin's] freedom to use the computing and networking tools that permit it to monetize its (introverted) faith.
    Real money is backed by guns, not butter.
    Is your "real money" only gold?
    You'll need a gun to protect it.

Arguments against Bitcoin

Warren Buffet
- YouTube - Everything Warren Buffet has ever said about Bitcoin
- 2014.03.06 - Forbes - Bitcoin Battle: Warren Buffett vs. Marc Andreessen
patio11
- his HN comments containing the word 'bitcoin'
- 2014.08.05 - Kalzumeus - Harry Potter and the Cryptocurrency of Stars
  - I found this a little hard to follow. Pictures might've helped. Rereading may help.
  - Recently, a new cryptocurrency called Stellar was announced. This happens on a daily basis these days, and the vast majority of them amount to nothing. Stellar, on the other hand, is backed by Stripe (among a host of Silicon Valley bigwigs), designed to fix some issues with Bitcoin (a system/asset/community/engineering artifact/etc of which I am a notorious critic), and appears to be a protocol for value exchange which happens to include a novel asset to be used in a self-organizing distributed boiler room rather than the other way around.
    So I thought it was worth understanding how Stellar works, at the protocol level. It turned out to be easier to explain with a story than a code sample.
  - Hermione Granger: Some cryptocurrencies require you to wait while mysterious wizards called “miners” run hundreds of billions of magical maths spells, called a proof of work, to make sure no one is tampering with the block chain. One block appears roughly every ten minutes and a transaction needs to have been included in a block at least six deep to be settled. If we had settled this transaction with one of those cryptocurrencies, Mr. Ollivander couldn’t be sure we had paid him for about an hour, although that is just an approximation based on probabilistic reasoning and observed features of the protocol rather than anything deterministic.
    Harry Potter: That sounds dreadfully inconvenient.
    Hermione Granger: And it would be, but Stellarmus doesn’t use a proof of work system, it uses an iterative consensus algorithm, so confirmations are almost instant — closer to “a slow remote API request” than anything involving a blockchain. No mining happens and there is no duplicative work performed worldwide in the hopes of getting seigniorage.
  - Defense Professor: Right, and no currency network will ever, ever be more adopted than my network. Currency is the strongest network effects business.
    Harry Potter: Err, Professor, don’t the Muggles’ currencies count as a network, too? I mean, you can send them by computer, and they have individual buildings which are worth more than all cryptocurrencies put together. In addition to that being, um, disproof by counterexample, even if the networks effect argument were true, wouldn’t that have been an insurmountable barrier against the success of your own network, which you appear to think is succeeding?
  - Defense Professor: Pah, the Ministry of Magic. Quite possibly the only thing I trust less than a goblin. While we’re on the subject of trust, Granger, why don’t you explain to the boys here what “trusting the network” means?
    Hermione Granger: So in any distributed system you need some way to get everyone on the same page about what reality is right now. Consistency, availability, partition tolerance: pick any two. The Defense Professor’s cryptocurrency does this in a trustless fashion — no matter how many peers lie to you, as long as there is at least one peer who is truthful, you learn the true (consistent) state of reality.
    Defense Professor: The truth will set you free.
    Hermione Granger: Unless, of course, sufficient miners conspire against you, in which case they can retroactively overwrite reality at will. You have to trust them not to do that.
  - Harry Potter: I’m not feeling like anything is happening.
    Defense Professor: Give me an hour or so to wait for confirmations and then this is totally on.
  - Have I mentioned that I don’t like Bitcoin? I don’t like Bitcoin. I’ve been working on a one-stop-shop explanation of why I don’t like Bitcoin, but haven’t posted it yet. Check back here on the blog if it interests you.
    While I don’t like Bitcoin, I tried to be fair to the technical reality of it. To the best of my knowledge, no character in the above story ever tells a direct lie.
    Do I like Stellar? Too early to tell. I haven’t really dug into it as an engineering artifact. The embryonic ecosystem does not yet have any tangible economic value. (And the Bitcoin ecosystem? *whistles*) Suffice it to say that at the moment it looks like a very interesting proposal for something that may some day be a toy, and some people I trust believe the toy may eventually be more than a toy, but I have no particular reason to believe or disbelieve that that will be the case yet.
- 2017.01.17 - HN - Ask HN: Why is the community so negative towards blockchain technology?
  - Well since you asked.
    
    Blockchain is the world's worst database, created entirely to maintain the reputations of venture capital firms who injected hundreds of millions of dollars into a technology whose core defining insight was "You can improve on a Ponzi scam by making it self-organizing and distributed; that gets vastly more distribution, reduces the single point of failure, and makes it censorship-resistant."
    
    That's more robust than I usually phrase things on HN, but you did ask. In slightly more detail:
    
    Databases are wonderful things. We have a number which are actually employed in production, at a variety of institutions. They run the world. Meaningful applications run on top of Postgres, MySQL, Oracle, etc etc.
    
    No meaningful applications run on top of "blockchain", because it is a marketing term. You cannot install blockchain just like you cannot install database. (Database sounds much cooler without the definitive article, too.) If you pick a particular instantiation of a blockchain-style database, it is a horrible, horrible database.
    
    Can I pick on Bitcoin? Let me pick on Bitcoin. Bitcoin is claimed to be a global financial network and ready for production right now. Bitcoin cannot sustain 5 transactions per second, worldwide.
    
    You might be sensibly interested in Bitcoin governance if, for some reason, you wanted to use Bitcoin. Bitcoin is a software artifact; it matters to users who makes changes to it and by what process. (Bitcoin is a software artifact, not a protocol, even though the Bitcoin community will tell you differently. There is a single C++ codebase which matters. It is essentially impossible to interoperate with Bitcoin without bugs-and-all replicating that codebase.) Bitcoin governance is captured by approximately ~5 people. This is a robust claim and requires extraordinary evidence.
    Ordinary evidence would be pointing you, in a handwavy fashion, about the depth of acrimony with regards to raising the block size, which would let Bitcoin scale to the commanding heights of 10 or, nay, 100 transactions per second worldwide.
    
    Extraordinary evidence might be pointing you to the time where the entire Bitcoin network was de-facto shut down based on the consensus of N people in an IRC channel. c.f. https://news.ycombinator.com/item?id=9320989 This was back in 2013. Long story short: a software update went awry so they rolled back global state by a few hours by getting the right two people to agree to it on a Skype call.
    
    But let's get back to discussing that sole technical artifact. Bitcoin has a higher cost-to-value ratio than almost any technology conceivable; the cost to date is the market capitalization of Bitcoin. Because Bitcoin enters through a seigniorage mechanism, every Bitcoin existing was minted as compensation for "security the integrity of the blockchain" (by doing computationally expensive makework).
    
    This cost is high. Today, routine maintenance of the Bitcoin network will cost the network approximately $1.5 million. That's on the order of $3 per write on a maximum committed capacity basis. It will cost another $1.5 million tomorrow, exchange rate depending.
    (Bitcoin has successfully shifted much of the cost of operating its database to speculators rather than people who actually use Bitcoin for transaction processing. That game of musical chairs has gone on for a while.)
    
    Bitcoin has some properties which one does not associate with many databases. One is that write acknowledgments average 5 minutes. Another is that they can stop, non-deterministically, for more than an hour at a time, worldwide, for all users simultaneously. This behavior is by design.
    I can go on, and probably will some other day. This is a bit of a hobby for me.
2017.09.21 - Great Wall of Numbers - Eight Things Cryptocurrency Enthusiasts Probably Won’t Tell You
- HN discussion
- rec'd by patio11 here
2017.10.08 - Fiat money is very effective (Slides)
- Summary
  - TODO: Go through the slides and summarize the rest of them. The stuff below is from the 'summary' slides at the end.
  - Fiat currencies are not “backed by nothing”. They are backed by the labor and assets of all the humans who have obligations to pay in fiat, by the power of the state to coercively create such obligations via taxation, and by the ingenuity of banking systems at seducing people to voluntarily accept obligations to repay fiat
  - The case against fiat is an ethical case, much more than an effectiveness case.
2017.10.20 - Twitter - Nelson Rosario - Thread on problems with Bitcoin / blockchain
- rec'd by patio11 here ("I endorse about 80% of this thread.")
- This is probably worth reproducing here.

It 'doesn't pass the test of a currency'

Quora - What are the characteristics of a good currency and how does Bitcoin compare to that?

It can be made illegal

Ethereum

Articles / Videos

2017.07.20 - Ocalog.com - Ethereum from scratch - Part 1: Ping
- This looks pretty good. He uses Python.

Table of contents

Child pages

Related pages

Blockchain tech in general

Tutorials / Explanations

Advocates

Bitcoin

Wikipedia

Online communities

Hal Finney

Tutorials

Arguments in favor of Bitcoin

Arguments against Bitcoin

It 'doesn't pass the test of a currency'

It can be made illegal

Ethereum

Articles / Videos

ICOs

Browser not supported