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Bitcoin

We're here to explore the ramifications of cryptocurrency on tech, society and money.

#bitcoin @kytsune @rizzn @stevenkaufman1 @rjmcgirr @jon_hq btc bitcoin cryptocurrency

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#bitcoinBitcoinWe're here to explore the ramifications of cryptocurrency on tech, society and money.

#bitcoinBitcoinWe're here to explore the ramifications of cryptocurrency on tech, society and money.

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Open question: People’s thoughts on the current climate of Bitcoin and gaming economies? MMOs and casual games often use microtransactions and their own internal currencies to pull in money from World of Warcraft selling virtual pets to Farmville and cows.

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The big benefit I throw to developers is the fact that if they make a currency on a centralized server, they will have to spend resources to protect those servers. Issuing points on a p2p shared ledger protects all players and keeps the game fair.

Mark 'Rizzn' Hopkins

I've always thought that Zynga, Facebook, or any of the prominent gaming companies that have their own "token" should consider using a form of crypto currency to manage that process. There are numerous benefits to going that direction.

Mark 'Rizzn' Hopkins The infrastructure tends to "manage itself," so to speak, being the biggest benefit. Exchanges, value, security get offloaded to a community happy to take up the slack.

WoW gold and Everquest and IGE is how the idea for this all originated from anyway

Steven Kaufman0

What do you think about the Cryptocurrency Auroracoin? that is Given to Every Person in Iceland

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Good idea, especially given all the banking issues. The problem wihen you splinter off is that you don't get volume/stability until a lot of people start using it.

James Duchenne16

Hypothetical: Banks join the bitcoin economy, they purchase Bitcoins then peg it to their own virtual currency which they lend out, practicing fractional reserve banking. What issues do you see in that scenario?

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Mark 'Rizzn' Hopkins

If they peg the price to anything, then I can see an amazing opportunity for arbitrage between what they say the value is and what the market says.

James Duchenne Agreed. However, they will be lending out money that they've created out of thin air again (sounds familiar) assuming FRB is 10%. The two things I think that make it different, no central banks to bail them out and all transactions on public ledger!

Mark 'Rizzn' Hopkins You're right - assuming they do all lending and banking on the public blockchain, which may or may not be guaranteed. You can do a lot of wizardry if you go off blockchain that could ultimately be very unhealthy.

Pegging it doesn't make a whole lot of sense. Banks are a necessary part of the current Bitcoin eco-system. Coinbase only functions because they have a good relationship with a bank. Banks can benefit from Bitcoin. Reduces wire-cost for them

If you have fears of fractional reserve banking, Bitcoin exchanges could already hypothetically do that, since a lot of their customers hold their BTC on the exchanges.

If Bitcoins become mainstream I am sure Banks and other Financial Institutions will enter. They may be early adapters too for cashless settlements with low/no transaction costs

Mark 'Rizzn' Hopkins Absolutely. It's not a question of if, but when, in my mind.

For someone with a small amount to invest, is Bitcoin still the best place to put it today, or is there another currency which looks likely to grow at the rate Bitcoin did last year?

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Mark 'Rizzn' Hopkins

I'm not a financial analyst or advisor, but in my opinion, you have to balance risk v. stability. As volatile as Bitcoin is, it's far more safe to invest there than any other alt-crypto, IMO, just based on maturity alone.

Mark 'Rizzn' Hopkins You can certainly *possibly* make crazy returns on smaller cryptos, but you are also far more likely to lose everything with one of those, v. Bitcoin.

You're looking for an 8000% YTD investment return? Good luck, those don't come around very often!

Shawn Esplin When you put it that way it sounds ridiculous. ;) I'm not looking for a guaranteed 8000% return, just a chance to catch that kind of amazing growth early on if it's happening anywhere else.

Mark 'Rizzn' Hopkins3

For the experts: When someone asks you the best place to go acquire bitcoin, what do you tell them?

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Mark 'Rizzn' Hopkins

And as a bonus question: If you used to say "I'll sell them to you," what's your response now in light of the new FINCEN guidelines.

Coinbase.com in the United States. Answer varies radically based on where you live. It also varies on how many you want to purchase. LocalBitcoins is also a fairly easy option.

Coinbase
The easiest way to buy, use, and accept bitcoin

Could our "digital exhaust" become a currency? The more active you are on say social media more "money" you get to spend ? Advertisers or users of "personal data" pay

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Anything like that that has no real-world economic cost to it can be gamed. Even Consensus which is partially based on reputation has a cost to it, because it requires time and effort to build up a trusted reputation.

Mark 'Rizzn' Hopkins

There has been interesting science fiction written about this, but I haven't seen a workable example of something like this that could work to the degree that the Bitcoin protocol has.

Mark 'Rizzn' Hopkins5

MT Gox is facing some (more) technical and business issues today, yet it continues to be a highly visible part of the Bitcoin community. Will MT Gox continue to be the world's most recognized BTC exchange, or are they ultimately doomed at this point?

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Egh. MtGox used to be decent. At this point, I don't recommend anyone to use them. Unless they somehow come back AND every other exchange falters, they're doomed.

Jon Holmquist Not to say they didn't have a good run. I'm sure they're sitting on a ton of BTC, they'll all be able to move on and do fantastic things.

Mark 'Rizzn' Hopkins I was reading somewhere last week that one of the founders has turned his attention to a new startup, which has contributed to the decline. I haven't recommended them to newbies for quite a while.

I'd love to hear what the crowd thinks Bitcoin is... in only one word.

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"Wire" is how I'd describe it.

revolution

...Bitcoin. ;)

Jon Holmquist Probably the best answer. I keep telling people, Bitcoin is Bitcoin. You don't call the internet a network of data tubes.

Mark 'Rizzn' Hopkins

"disruption."

Fascinating

Radical_Value (one word)

Mark 'Rizzn' Hopkins Spoken like a developer. :)

future

Sanguine.

"Funny"

Have the technology big names like Google, facebook, Amazon, Microsoft, IBM, Oracle et al made any plays in the Bitcoin sector yet?

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I hear rumors. They're definitely watching though.

Mark 'Rizzn' Hopkins

Google has made some backchannel to early adopter memos that it's coming for Google Wallet. I think Facebook would be foolish to not consider their own alt-coin, personally.

They will jump in when they see momentum, thread to their model, and a way to change the game to their advantage

Gresham's Law: Bad money drives good money out of circulation. How does it apply to Bitcoins?

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Applies only if you use Bitcoin solely as money ;) The issue with applying economic theories to Bitcoin is that it is not only money or only a payment system or only a protocol.

Mark 'Rizzn' Hopkins Nailed it. Truth is that we haven't seen anything quite like Bitcoin, ever. A lot of old theories, axioms and laws aren't directly applicable.

Counterfeit Bitcoins...have they made their appearance yet?

Mark 'Rizzn' Hopkins It's called double-spending. It's one of the things Bitcoin was engineered to defeat.

Jon Holmquist One of the great things about Bitcoin is that it's impossible to counterfeit them (with proper precautions). If you know where every Bitcoin in existence is (viewable on the public blockchain) then how can someone introduce a fake one?

kytsune One of the problems the Bitcoin protocol was designed to solve was counterfeiting. To perform a double-spend takes a prohibitive amount of resources and engineering and would take the counterfeiter down with it when confidence in Bitcoin falls.

Mark 'Rizzn' Hopkins

It's a great question. I don't have a perfect answer here, but I don't think Gresham's Law is directly applicable to Bitcoin, because Bitcoin as a technology functions differently than most money we're use to does...

Mark 'Rizzn' Hopkins .. it's a payment processing vehicle, and also a possible store of value. I think you can look at the world of Bitcoin mining, and apply aspects of Gresham's law to legitimate mining v. illegitimate (i.e., stolen electricity vs. legally obtained).

Mark 'Rizzn' Hopkins ... but for the protocol itself, I'm not sure you can directly apply Gresham's Law. Ask me again in a couple of weeks at the next Bitcoin Crowdchat , and I'll have a better answer for you.

@jon_hq "impossible" has too much finality to it. Perhaps "difficult" may be more apt

Mark 'Rizzn' Hopkins Compromise: difficult enough to be cost prohibitive. :)

Jon Holmquist I'm fairly confident in my answer. Even double spending only allows you to respend coins you own, not create new ones from thin air.

One thing that I'm radical on is that "connected" and "instrumented" data changes the game (same for currency) and algorithms will emerge bc the "cash is on the barrel"; it goes where value is; good money works

One point we discussed last night with folks who were in Silicon Valley from Northwestern Kellogg Business School was the notion of "behavioral economics" in all this -- new ways drive both behavior and economic change; this is the fun crazy part

Deepak Seth Yes, that is intriguing and interesting

@rizzn sure , would be great if you could check and share