>"...it is unlikely that [Bitcoin] will remain free of government intervention, if only because the governance of the bitcoin code and network is opaque and vulnerable."<p>And the traditional banking system is not opaque and vulnerable? Let us recall that -- despite its vaunted regulatory system -- the banking system nearly destroyed the global economy back in 2007, exactly because it was (and is) opaque and vulnerable.<p>Sometimes, I wonder if people stop and think about what they're writing.
<i>> What, in the end, is this new currency? It is a list of authorized transactions, beginning with the creation of the unit by a miner, and ending with the current owner.</i><p>Eloquent summary from a skeptic :)
The description of proof of work is a little bit confused: the author says "The problem is difficult to solve, but the solution is easy to verify, as it is difficult to factorize a very large number but easy to verify that a proposed factorization is correct". If we read "as" as meaning "because" rather than "akin to the way that", this is wrong: this problem is based on hashes, not factorization.
> At a minimum, one must wait ten minutes for the proposed transaction to be included in the block chain, and for large amounts it is customary to wait for six blocks, or one hour. These times are much slower than those to complete electronic retail transactions in most other currencies (e.g., a few seconds to charge a credit card either online or at a physical retail location)<p>the person who wrote this is a <i>senior economist</i>?<p>First of all, you don't must wait ten minutes or one hour, you wait iff you want confirmations from other peers saying that the transaction is actually included in the blockchain, more time you wait more confirmations you get. But in the practice you only do this when you can't trust the other party, and many times the other party is using an well-known online wallet that let you use a green address (<a href="https://en.bitcoin.it/wiki/Green_address" rel="nofollow">https://en.bitcoin.it/wiki/Green_address</a>). So, you can have almost instant transactions with Bitcoin.<p>Actually credit cards don't takes just "a few seconds to charge", that's what the final user thinks, but the reality is that it may take weeks to process and transfer the money to the seller bank account. And also the level of fraud with CC's is astounding; that's why we have to pay a lot of fees (I mean, CC's intrinsically needs insurance).
Here is a interesting series of articles about CC:
<a href="http://boss.blogs.nytimes.com/2013/03/25/what-you-need-to-know-about-credit-card-processing/" rel="nofollow">http://boss.blogs.nytimes.com/2013/03/25/what-you-need-to-kn...</a><p>By the way, with real cash the time for a transaction is equal to the time of one party giving one or more bills to the other party + the other party verifying if those bills aren't fake + (not always but usually) give the change. :)
> <i>Bitcoin is a fiduciary currency</i><p>> <i>Fiduciary currencies—in contrast with commodity-based currencies (such as gold coins or bank notes redeemable in gold)—have no intrinsic value, and derive their value in exchange either from government fiat or from the belief that they may be accepted by someone else. They are inherently fragile; government orders can be ignored or doubted, and a currency that has value only because of the belief that it will have value may have no value at all (for instance, if I believe that no one will accept it, I will not accept it either).</i><p>--------------------------------<p>This article displays a lack of understanding of bitcoin, gold, and other market-driven assets. Quantifying bitcoin in terms of computing power and electricity is a clueless perspective. Conversely, the author doesn't attempt to quantify gold by the same standards of its minimum measurable cost to produce and mere industrial scope. Gold, in his mind, I suspect, is long established and therefore above the same logic.<p>Bitcoin and gold are each greater than the sum of their cost to produce, obviously. Demand drives this. Stability drives this. Intrinsic value is contained in bitcoin and gold for varying reasons. If the author doesn't appreciate (or understand) the intrinsic worth and applications of a peer-to-peer, cryptographically-secure, fungible transactional system that's becoming increasingly hard to defeat by any central authority and increasingly used in the real world -- then so be it. Many people won't value that. Hell, some people don't value the internet. Not valuing something doesn't mean it's not valued. To me, gold is a pretty element and good for electronics. I don't seek it out for fashion. Yet, I can fully appreciate why others do and why it's a stable way to store value.<p>Bitcoin has intrinsic value. It is <i>not</i> a "fiduciary currency." The "currency" of it is far removed from any guarantee of value and far separate from its functionality.
If anyone is looking to learn more about Bitcoin, I wrote a short eBook about it.<p><a href="http://www.bitcoinbeginner.com" rel="nofollow">http://www.bitcoinbeginner.com</a><p>If you'd like a copy, gratis, just send me an email - john@bitcoinbeginner.com
This is one of the better "non-technical" explanations I've seen. I especially like his summary of the costs of Bitcoin: unique wallet identifiers impede anonymity, and blockchain verification delays transactions by ten minutes.<p>Has anyone thought of making a service to eliminate the ten minute delay? You would operate as a sort of Bitcoin credit agency, temporarily lending funds to credible buyers. You could market this on the merchant side (receive money instantly) or the purchaser side (send money instantly). Take a transaction fee to cover the risk.
Few things in technology polarize my feelings like Bitcoin. I get it, I respect what some people think it stands for, but I can't take it seriously. Between the rampant speculation, wild fluctuations and the cult-like attitude of its community, I have a hard time seeing it as anything legitimate.<p>Not to mention that it's success assures that there is a weird shadowy cabal of people who end up insanely rich because they created it. Doesn't seem like currency should work that way...
> "But once created, the bitcoin has no value other than in exchange, contrary to a gold coin."<p>How is this true. Gold has no use to the average person. The only real use for gold is in semi-conductors. Other than that gold derives its worth from the fact that is very scarce, like bitcoins.