Intro to Bitcoin

March 16, 2014 / Been listening to and reading some discussions of Bitcoin, so this is where I’ll keep track of the good ones.

The story of Bitcoin has a lot going for it: mysterious disappearing creator, libertarian ethos, elegant system design, treasure hunt, social unrest, hackers, technobabble, a recent crisis, and my favourite: a sense that despite all the punditry and hype the meaning of it all hangs just out of reach.^† So I’m making a list of some resources on Bitcoin, organized from the more accessible to the more technical, as a way of keeping track and in case it’s interesting to you as well.

Origins and mechanics

From the more factual and didactic:

1. “The Bitcoin phenomenon,” Late Night Live (audio: 28 minutes). Phillip Adams talks to economist Yanis Varoufakis and technologist Andreas Antonopoulos. Introduces some basic concepts such as the blockchain and compares Bitcoin to the gold standard. [2014-03-13]
2. “Heart of a Gambler,” The Talk Show (audio: 2 hours, 24 minutes). John Gruber talks to tech journalist Glenn Fleishman and they get into a rather long discussion; the main topic begins around 26:26. Fleishman provides an overview of Bitcoin mechanics and the back-and-forth with Gruber helps to flesh out concepts such as how transactions update the blockchain, what mining is, and how minting conflicts are resolved. [2014-03-07]
3. “How the Bitcoin protocol actually works,” by Michael Nielsen, is a description of Bitcoin’s structure that introduces components sequentially. Read this to understand what the elements of Bitcoin are as well as the problems they are intended to solve. Introduces proof-of-work systems and Bitcoin wallets. Discoveries: mining is the same thing as validating transactions; what Bitcoin transaction messages look like. [2013-12-06]
4. Paul Bohm’s answer to the Quora question “Is the crypto currency Bitcoin a good idea?” discusses Bitcoin’s proof-of-work function as a solution to the Byzantine Generals’ Problem and assesses that it’s an efficient way to achieve consensus in a distributed system. Bohm concludes that if the value of decentralisation rises, so will the value of Bitcoin. [2011-06-07]
5. “Bitcoin: A peer-to-peer electronic cash system” (PDF), by Satoshi Nakamoto. The original Bitcoin paper which is surprisingly short. [2008]

Risks and possibilities

To the more opinionated and speculative:

1. “Bitcoin is as good as gold, and that’s bad,” by Wesleyan economics professor Richard Grossman. Grossman says that if the US had used a finite monetary standard like Bitcoin in 2009 the financial crisis would have been worse than the Great Depression. [2014-03-03]
2. “The Bitcoin boom” by Maria Bustillos looks at some of the motivations behind the creation of Bitcoin and takes a middle-of-the-road approach to the currency’s current status and future prospects. [2013-04-02]
3. “Registries need to price in Bitcoin,” by Mark Jeftovic, of Canadian company easyDNS. Jeftovic argues that domains should be priced using a non-national currency like Bitcoin instead of US dollars. (I’m an easyDNS customer, for what it’s worth.) [2013-05-27]
4. “How Bitcoin can turn the cloud inside out,” by Jon Evans who speculates that blockchains—though not necessarily Bitcoin—could change the architecture of the Internet for the better by decentralizing identification and resource distribution systems. [2014-03-22]
5. “The Bitcoin bubble and the future of currency” by Felix Salmon who views the currency’s design as fatally mistrustful: incentivising malware, tending towards deflation, and lacking safety mechanisms. Yet Salmon thinks we can use Bitcoin to diagnose problems with current financial institutions and explore more accountable alternatives. [2013-11-27]
6. In the Critical Path episode “Fruit Fly Analysis” (audio: ~11:30–12:55) Horace Dediu mentions Bitcoin’s blockchain as a potential technological core around which the “jobs to be done” of banking could change, thereby disrupting the banking industry. [2014-12-18]

See also

Searching for the father of Bitcoin. An alternative genealogy. [2014-03-10]

† Working hypothesis: popularity of Bitcoin could create a system capable of challenging government control, and corporate domination, of the Internet.