In this post I articulate what a peer-to-peer transaction is, why Bitcoin transactions are not peer-to-peer, and why it is important to understand the differences clearly. I describe the benefits of peer-to-peer transactions and discuss that Corda is the closest architecture to take advantage of those benefits.Continue reading “Bitcoin’s payments are not peer-to-peer!”
Last December I was approached by a publisher, Mango, who asked me if I would write a book about blockchain technology. A little nervously, I agreed, and I’m excited to announce the result of six months of effort:
The Basics of Bitcoins and Blockchains is an essential guide for anyone who needs to learn about cryptocurrencies, ICOs, and business blockchains. Written in plain English, it provides a balanced and hype-free grounding in the essential concepts behind the revolutionary technology.
I wrote The Basics for an audience of business people, students, practitioners, and those who are simply interested in this technology. I tried to make it entertaining even for those who are already working in the cryptocurrency or blockchain industry. For example, did you know:
We’re gonna need another intermediary…
In 2013-15 it was trendy for online merchants to pretend to accept bitcoin as payment. It was a very cheap way to get positive media mentions and seem innovative. Overstock, Dell, Tiger direct… they were all at it after they realised it was all media upside. Even Virgin Galactic accepted bitcoin as payment for trips to space at some point (Note: I think paying for a trip to space with bitcoins is actually quite cool).
Important note: If you own more than $1,000 worth of cryptocurrency then you should definitely be using a hardware wallet instead of keeping coins on exchanges. I recommend a Trezor which you can buy for €89 directly from their website.
Every few days I hear the argument “If x% of the money in gold (or other asset class) moved into bitcoin, a single bitcoin should be worth $y”. This article explains why this argument is utter nonsense.
The (flawed) reasoning is as follows: the total value of gold in circulation is estimated at US$8 trillion. If some small fraction of the people holding gold (say, 5%) sold their gold for US Dollars (releasing $400 bn), and the USD proceeds were used to buy bitcoins, the total value of bitcoins (commonly referred to as “market capitalisation”) would increase by that amount of dollars ($400bn), and because we know the total number of bitcoins in circulation, we can derive a price per bitcoin.
This post aims to explain the various common forms of money that exist today, and the words we use to describe them.
I enjoyed listening to Episode 151 of the podcast “Epicenter” (previously “Epicenter Bitcoin”) featuring Ian Grigg, inventor of Ricardian Contracts and blogger at Financial Cryptography. Here are my notes – part transcription, with some edits. This one is a goldmine and covers many topics: bonds, contracts, cash, Chaumian e-cash, DigiCash, financial cryptography, Ricardian contracts, digital signatures, smart contracts, dispute resolution, Ethereum, triple entry book-keeping, oh my!
Misunderstandings and paraphrasing errors are entirely mine.
This gets fairly technical; if this is hard to follow, it may be helpful to read my introduction to smart contracts first. Hmm, if it’s still hard to follow, also read about blockchains and bitcoin and Ethereum, and digital tokens.
This post tries to describe two very different uses for blockchain technology: Digital Token Ledgers that record ownership changes of digital tokens, and Activity Registers that record timestamped proofs of existence of data or agreements about data. Bitcoin is used for both.
I have heard this comment many times:
“Blockchain” is a solution looking for a problem.
That is incorrect – here’s the problem statement, originally articulated in 2008:
The problem statement, to paraphrase, is
“How do people pay each other electronically without being at the behest of Financial Institutions?”
The proposed solution is:
The full audio episode is here and I recommend subscribing to the podcast if you are in to FinTech. A transcript of the relevant section is below, edited for clarity:
This short article attempts to explain what people mean when they are talking about blockchains being a “single source of truth”. In classic Chinese Whispers style, the narrative has become confused about what is meant by “truth”.
This is currently relevant to discussions in the insurance industry where blockchain enthusiasts may be eager to promote blockchains as a solution to the problem of verifying if something has happened or not.
Here, I permanently recorded on Bitcoin’s blockchain a non-truth about the world.