Bitcoin

Like any cryptosystem, Bitcoin has a fixed shelf life. As algorithms and attacks evolve, the cryptographic hash function that forms its core will eventually become obsolete will need to be replaced. We know this.<p>The question is, can we build the ability to switch cryptographic building blocks into Bitcoin? I have no idea, but resiliency and adaptability are fundamental to the survival of any peer to peer system.

Bitcoin isn't going anywhere anytime soon, IMHO. Works great for intended purpose. Just like a bike works great as a bike (not as a motorcycle or a rocket ship).<p>Want to conduct an anonymous consumer-sized transaction and/or send money internationally and/or minimize transaction fees? Bitcoin:<p>1) Make your deal terms, priced in Bitcoins. Include whatever time limits are required, such as payment must be received by x deadline or else commitment expires and/or is subject to repricing.<p>2) Login to Bitcoin exchange. Purchase Bitcoins at whatever market price is. Send Bitcoins.<p>3) Done.<p>Sure, you have other risks that you have hedged, minimized and/or accepted (or failed to recognize or address, and therefore accepted without knowing it). See here <a href="https://en.bitcoin.it/wiki/Contracts" rel="nofollow">https://en.bitcoin.it/wiki/Contracts</a> for some of the interesting contracts possible with Bitcoin.<p>Plenty of opportunity for Bitcoin-related designers, developers, investors, etc. to create the services and interfaces required for end-Bitcoin users to feel confortable and be able to EASILY and SECURELY conduct transactions and bank their Bitcoins SECURELY (easy, disaster recover, not stolen or hacked, etc.). Landrush is on. Early dayz are now... still.<p>Besides Bitcoin-related work, there is the whole, larger, universe of ancillary services. The analogy is Facebook to Facebook Apps or iPhone to iPhone Apps. Micropayments, automated bidding, pricing, incentivizing, etc. Lots of neat possibilities.

&#62; I think it is, but there are significant ramifications that will result from the decoupling of currencies from governments.<p>The decoupling of currencies from governments sounds like a radical shift, but it's actually only fairly recent in history that we use fiat money. That, of course, allows us to do a lot of things that we've gotten used to in the last century particularly, such as taking advantage of monetary policy to address short-term economic concerns.<p>If alternative currencies catch on, that's something that governments will have less power to do - or at least, less power to do directly and predictably. Certainly, governments are going to push back on that, and probably try to discredit or disable alternative currencies.<p>At the end of the day, though, while money can be determined by fiat, value is determined subjectively, so if alternative currencies catch on (which I think they well), it will necessitate a shift in the way that people think about money. (Not unlike the way that the Internet has shifted the way people think about tradable goods and IP law - just take a look at SOPA.)

Fred's post has an hidden agenda.<p>There's no clear message in the article -- except expressing a strong believe for Bitcoin or related tech. So, I guess he's trying to get some heavy co-investors on board by creating some hype on Bitcoin again. Any other ideas?<p>Besides: I love the Bitcoin idea and I'm sure it's not over yet (I still have Bitcoins).<p>Edit: Don't get me wrong, I am not into bashing Fred -- I just want to get the real message behind his post and to raise HN readers's awareness for influence by media (media manipulation). Before happily discussing a new topic by a VC celeb we should ask why is HE now posting about Bitcoin. Look: Fred and his blog have a strong reach and influence, so it should be legitimate to question his actions. More on this topic: <a href="http://en.wikipedia.org/wiki/Media_manipulation" rel="nofollow">http://en.wikipedia.org/wiki/Media_manipulation</a><p>Edit2: just read another reply in this thread (which is downvoted as well) about that he just want to give the Bitcoin price another bump.

This is naive in the extreme.<p>We all live in nation-states and are required to abide by their laws as a result. Though it's theoretically possible to separate currency from governments, if that's not what the governments want, it will never be legally permissible. As it is, Bitcoin operates in a legal gray area. That's not going to improve.<p>Most of the VCs I talked to about FaceCash refused to invest because they were afraid of the regulatory implications. But throw in some bad economics (verified as such by Paul Krugman, see <a href="http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfetters/" rel="nofollow">http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfett...</a>), a catchy buzzword or two, and some political philosophy, and you've got yourself an investor?<p>Venture capital is even more broken than I thought.

What happens if someone releases bitcoin2? right now bitcoin exists as a unique entity, but with competition what happens to it's value? bitcoin to me seems like how beenie babies were to moms in the 90s. Super fun and interesting for a while, but a couple years later and everyones trading pokemon cards.<p>Plus I don't think I'm ever going to be able to get over how lopsided bitcoin favors early adopters.

I think a large factor in adoption of BitCoin is the uncertainty of it's security. You have to be close to a hacker to truly understand how BitCoin works. General public has little to no chances at being able to gage how safe bit coins are to hold, and with no government to back up the investment, they will understandably be very hesitant to participate. Especially since it already got hacked.

If nothing else, this story ought to trigger a small bump in te price of a bit coin. The price seems to be directly collated to the amount of press it gets.

"...decoupling of currencies from governments..."<p>Yeah, because it worked so well when we let the banks just do whatever they wanted during the past 15 years.

Fred: Redo that plot substituting gold, a currency going back to biblical times, for dollars. Do you think there is still a chance bitcoin will follow the Gartner hype cycle?

I think it is a lot easier for the people to remove a ruling party, than for that ruling party to remove a software application that the people want.<p>What made email catch on? Did it put the post office out of business? Maybe the future is an online currency with &#60;$5000 transactions used by smartphone users and somehow baked into the web like email, a server app. Apple, Google (or really the banks) should be onto this.

This is a good article, linked in the comments:<p><a href="http://themonetaryfuture.blogspot.com/2011/11/air-guitars-and-bitcoin-regulation.html" rel="nofollow">http://themonetaryfuture.blogspot.com/2011/11/air-guitars-an...</a><p>Apparently there is a contingent among Bitcoiners and academics that wants it regulated for various reasons, and is working to achieve that.

Some restaurants are already using bitcoin as a payment method, but it's still very hard to use it in real world situations. I still think that when we'll have a lot of NFC phones around, that's when Bitcoin payments will really start to become a common thing in the real world.

<i>the emergence of currencies that are not controlled by nation states in my lifetime</i><p>What we expect is the emergence, not of currencies, but of <i>a</i> currency. Money is a natural monopoly, and a single currency is the free-market equilibrium. It's the current system of multiple separate floating currencies—each with its own name, exchange rate, and central bank/counterfeiter—that is the anomaly.

this entire debate would greatly benefit from tabooing the word "money" and talking more concretely about wealth.