Bitcoin 2.0 explained

http://voices.yahoo.com/bitcoin-20-explained-colored-coins-vs-mastercoin-vs-12475857.html

by hansy • 13 years ago

137 65 13 years ago

voices.yahoo.com

leishulang• 13 years ago

So bitcoin is the new quant?

maaku2• 13 years ago

Uh, yes? You've been living under a rock?

Thiz• 13 years ago

I like the idea behind protoshares and DACs.

Wall Street is next to be disrupted.

notprathap4• 13 years ago

very biased. why are we talking about victory for humanity when digital currencies is very much a first world phenomenon?

nostromo• 13 years ago

I actually think Bitcoin could help poorer people more than it can the rich.

For example, if you've ever been a poor college student, you know that banking fees can be very onerous. (Buy a $2 coffee with too little in your account; boom $40 overdraft.)

But you're forced to use a bank because it's really hard to get by in the world without one. (It's hard to receive money and impossible to spend it online or send it to a friend without the risk of carrying around cash.) Bitcoin could solve those problems for the poor.

eplumlee• 13 years ago

Not to quibble, but 'poor college student' is a statistical oxymoron. I do agree though that cryptocurrencies offer great promise for 3rd-world economies and is a democratizing influence.

maxerickson• 13 years ago

If someone has less than $100 in their bank account and they aren't making small purchases in cash, I'm not sure there is any mechanism that is going to help them. They need to do some combination of increasing their income and doing without coffee.

(It is super easy to budget with cash...)

Edit: Just to clarify, in the parenthetical, I mean 'budget' in the sense of 'stick to spending what you have', not 'plan out what to purchase'.

CamperBob2• 13 years ago

I actually think Bitcoin could help poorer people more than it can the rich.

It already is capable of doing that. If cryptocurrencies do nothing but put Western Union out of the foreign remittance business, they will save billions of dollars for people to whom that kind of money still means something.

hnha• 13 years ago

Ok, I bite: Explain how the poor college student with too little bitcoin in his account to buy a coffee can buy a coffee.

lmm2• 13 years ago

Bitcoin carries all the risk of cash and more; a bitcoin mugger would be able to get your life's savings rather than just what you have in your wallet.

Regulations against predatory lending will be much harder to enforce with bitcoin, which will hurt the poor.

Many people compare bitcoin to gold. Look at who trades/pays/saves in gold today. It's not the poor.

4684499• 13 years ago

Yeah, so, a poor college student can't have a bank account but he can have a computer ($200) and internet connection ($10/m) to get started with these coins.

Well, how does a poor college student get his first coin? or a satoshi? Oh right, a computer, a wallet, maybe a bank account and an exchange platform account. No? Go find someone sells coins offline? lol, with what? Cash? Oh, that poor student... He just transfered 10 grands into bitcoins yesterday, today, it worths 12 grands, tomorrow worths 8. No worry, a poor student doesn't care.

Any coin that needs an internet connection means a huge ignorance of 2/3 of world population and infrastructures (which are controlled by the goverments). I don't want to live in that kind of world/system.

The premined coins have already made the bitcoin world unfair, how can any one keep saying bitcoin is the future and doing good things for the poor? I guess because those coins made wealth redistribution much easier than ever.

notprathap4• 13 years ago

I am not suggesting current monetary system works. I am only saying Bitcoin is not the solution. Digital currencies? Yes. Bitcoin - nope. There is a clear unfair advantage for early adopters - very much like how the English came into the America and laid out property laws and took swarms of land. How is this any different?

gfodor3• 13 years ago

decentralization is not a benefit in a vacuum, it comes at a cost.

to be taken seriously bitcoiners need to have a thesis as to why the benefits of decentralization in each of these applications outweigh the cost.

kerkeslager• 13 years ago

I don't think this is really how things are going to work. In an ideal world, people would come up with a strong thesis that features of Bitcoin outweighs the cost, and only then would people take Bitcoin seriously. But the reality is that nobody really understands Bitcoin's role in the world economy well enough to evaluate such a thesis. There are tons of theses about how Bitcoin might be used. The only way to evaluate these theses is to implement them and see if they work.

So basically, we can't wait to see if the benefits outweigh the costs to start taking Bitcoin seriously. Bitcoin has to be taken seriously before we can weigh the benefits against the costs. There's just no way to evaluate whether decentralization is more beneficial than costly except to take the risk and try it.

In that sense, Bitcoin isn't really that different from any other new financial idea. Either you invest in a thesis or you don't, and if you invest, then either you make money or you lose money. You can make educated guesses on which theses are correct, but ultimately you can only prove or disprove a new financial idea by taking it seriously enough to try it.

People are already taking Bitcoiners seriously to the tune of billions of dollars, so I think we'll see results from this experiment. Whether the results of the experiment will be positive or negative, I don't know.

gfodor3• 13 years ago

My point wasn't about bitcoin but about people posting their thoughts on bitcoin. If someone is going to try to get people rallied behind decentralized X, a good place to start is to offer practical reasons why that would be a better scenario than the status quo. Tell me why in the future I would want to take my retirement account out of my bank and deposit it into the decentralized ether. If I screw up that process, I lose my retirement account. Introduce a third party to help me with the process and you're on the road back to centralization. The same types of arguments can be made for other "this is serious business" use case for bitcoin.

Can the blockchain replace Twitter? Yeah maybe. But to compare overturning Twitter to overturning the NYSE shows a lack of proportionality and understanding of why things are the way they are in finance.

3pt141593• 13 years ago

We don't need to define the benefits of privacy and decentralization at all. We need to only offer them. Those who value decentralization and privacy will use what we offer. Those who dislike the outcome of a uncontrollable, decentralized world will have to exert a great amount of force and control to stop us.

Retric• 13 years ago

Bitcoin does not offer any form of privacy as a direct result of being decentralized. In many ways bitcoins are a huge step back from a privacy perspective simply because private people can follow all transactions.

kordless2• 13 years ago

It's not privacy, it's trust. There's a subtle difference.

aqme28• 13 years ago

While it doesn't tackle the benefits of decentralization, I really like the arguments in this article: http://theumlaut.com/2014/01/08/bitcoin-internet-of-money/

Basically, the benefit of the internet was that it was the first "open" telecommunications protocol (as opposed to telephone for example), which allows for permissionless innovation. Applications (i.e. Facebook) can be built on the internet without approval of any central party.

Bitcoin is an open protocol for "ownership." We're not even beginning to scratch the surface of what applications can be built upon it.

(chopped up for brevity:) "Internet applications, such as email and the World Wide Web, are defined in protocols implemented on devices at the edges of the network, like servers and home computers, not in the guts of the network: routers, switches, hubs, and exchange points. The lower layers of the Internet can be completely oblivious to the specific applications that are in use; they just focus on getting packets of data to the right place. ... If Sir Tim [Berners-Lee] had to explain to a telecom executive what hypertext was in 1990 before he could create the web, it may never have happened. If we had to rely on telecom companies to provide video calling, it would probably be more expensive and inferior to the video calling services we have today. ... The permissionless innovation and devolution of power fostered by the Internet may be obvious, or nearly so, in retrospect, but not in advance. From Krugman’s perspective, perhaps, the Internet was just another medium for communication, of which we already had plenty. Why should it have been such a big deal?"

conorclearshot• 13 years ago

Could those guts of the internet be set up to mine bitcoins or shave mbtc off of transactions?

gbog• 13 years ago

Decentralization in itself do not have a cost. When this architecture is applied to some concrete case it may have cost it even be wrong.

For example one can argue that if Europe had been kept under a central authority since Charlemagne, Europeans would have suffered much less wars, and maybe would have had less need to bring war and colonization worldwide.

But for a currency, distribution of goods, communication, etc decentralization is probably better, i.e. have more value than its implementation cost.

GigabyteCoin• 13 years ago

I must say that was a fairly well written article. The author really seemed to know his stuff. I never could fully wrap my head around protoshares from other writeups I had read, but this all made perfect sense. Even to my groggy morning mind.

diminoten• 13 years ago

The "Bitcoin 2.0" phrase is a reference to the "web 2.0" phrase, not to a new protocol version of Bitcoin.

May have been obvious to some, I dunno, but it's worth noting that Bitcoin can do all of these things today, with zero changes to implementation or design.

meowface• 13 years ago

They should have titled it "Cryptocurrency 2.0" instead, I think.

pjbrunet4• 13 years ago

Or "Building on the Bitcoin Blockchain" ;-)

I agree, they tricked me too!

pjbrunet4• 13 years ago

Last I heard, Mastercoin is just a specification. It's too early to pretend it's going to work. I heard an interview w/ the author and it sounds like lots of talk and big dreams w/ no real technology to back it up. When asked how long it will take to release a working prototype, I think he said two weeks if he gets enough donations to quit his job. OK suuuure. You can find the interview on YouTube. It's almost comical.

As far as "Colored Coins" looks like the same scenario--just an idea for a protocol? Their video is vague, doesn't really explain anything. Bitcoins backed by car titles? Let me guess, a decentralized vault full of luxury cars nobody can drive? LOL. http://coloredcoins.org/about/our-team/

gojomo• 13 years ago

Mastercoin appears to have a working market, transaction explorer, and reportable capitalization (at coinmarketcap.com), so it seems your information out of date. (Mastercoin might be doomed for any number of reasons, but it seems to be past the point where it can be casually dismissed with hand-wavey 'sounds like all talk'/'comical' impressions.)

pjbrunet4• 13 years ago

But none of that is new. A market for what? You mean an altcoin exchange? There's already websites where you can buy your own white-label exchange.

Mastercoin was supposed to be an application platform/protocol layer on top of the Bitcoin blockchain. Just one of the applications was supposed to be online gambling. Sounds like a red flag to me.

Anyone can create their own vanity altcoin--that part is not surprising to me. To build an application layer on top of the Bitcoin blockchain, in your spare time? Yes, sounds comical to me unless you're some Bill Gates superstar.

tsurantino• 13 years ago

The author alluded to some non-currency related applications of Bitcoin, i.e., a decentralized eBay.

Given the way Bitcoin and variants have been used so far, it's always been so exchange of some monetary value (i.e., shares, assets, funds, currencies, etc.). I'm having a really hard time picturing how Bitcoin can be applied in a non-monetary context.

Could someone explain?

aestra• 13 years ago

Someone came up with the idea of using the bitcoin network as a notary service.

http://www.pcworld.com/article/2039705/could-the-bitcoin-net...

nroose• 13 years ago

I just love this: Education/Experience Some College at Virginia Commonwealth University, 4 Years Experience as a Full-Time Freelance Writer, 4-Star Author at TextBroker, 10,000+ Articles and Blog Posts on the Internet

doctoboggan2• 13 years ago

I am working on a browser that uses colored coins for domain name resolution and BitTorrent Sync for content distribution, you can find it here: https://github.com/jminardi/syncnet

fsiefken• 13 years ago

smart idea, i have two questions: * why not use namecoin for dns resulution instead of colored coins? * i thought bittorrent sync wasn't open source

A decade ago there was talk of decentralized web sites through p2p technologies. IBM was working on such a web server. There is of course FreeNet, but it needs a gateway to access pages from the internet.

doctoboggan2• 13 years ago

why not use namecoin for dns resulution instead of colored coins?

Colored Coins seems more interesting to me, no other reason than that. It wouldn't be hard to swap in namecoin though.

i thought bittorrent sync wasn't open source

You are correct, it isn't However they present a very basic API that I believe some open source clone could replicate. As soon as that happens I plan on dropping it in as a replacement. But for now BitTorrent Sync works well enough.

lez• 13 years ago

there is a project called ethereum that is about to be announced. New codebase.

http://ethereum.org/ethereum.html

darkbot2• 13 years ago

I'm selling 50 Colored Coins for $2,500 each. They're backed up by the gold I have securely stashed in my potato cellar.

valarauca1• 13 years ago

If your interested this is roughly how much I'd charge for the Brooklyn Bridge, maybe if you throw in some of those potatoes.

darkbot2• 13 years ago

Naww.. I need a little bit of cash in my pocket right now.

But I have this 1 Colored Coin backed by the Eiffel Tower in Paris, Europe. Throw in that sack of potatoes and it's a done deal!

orkoden• 13 years ago

So this is basically trying to fix the problem that bit coin just does not scale very well. Instead of using Colored Coins, I could just as well use dogecoin.

btw, are there nice shibe that could help me get started with some doge? DUCHVurpx2s7s3VnXWFtcvodRatoEL2ccv

Bitcoin 2.0 explained

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