“Fear is a natural reaction to moving closer to the truth.”
Pema Chödrön

How Bitcoin Works

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Following the passionate podcast comes an excellent technical yet accesible description of how Bitcoin works came to me also via Pietro.

It, together with the podcast, outlines the underlying potentials of Bitcoin as a technology (rather then as a currency) … and I have questions:

  1. Would it be correct to describe Bitoin as a publicly created, owned, verified and secured record of … anything!?
  2. Isn’t the block-chain an inevitable challenge in term of data-storage (it will continue to grow and grow, especially as more complex applications are bundled into transactions?)
  3. Is it correct that the source of any inherit valuation in Bitcoin results from the assumption that mining needs to be rewarded?
  4. If there were other incentives to mining would it be possible to use Bitcoin as a public ledger without any inherent valuation and their ensuing “currency” symptoms? Could Bitcoin become BitPublicLedger without any “coin” association?
  5. If so, could, theoretically, another valuation/currency system (other than rewards for mining) be attached to Bitcoin to benefit from its other capabilies (secure, verified, public, etc.)? In other words, could BitPublicLedger be used to digitize and secure other kinds of currency?
  6. Can a current Bitcoin transaction have zero value associated with it – that is using the system to submit information to the public ledger without valuation exchange?

Update:

  1. If “reward” incentive is removed from the mining operation couldn’t it be made more efficient and more green? couldn’t mining become collaborative instead of competitive? for example, if I were part of a community (physical or virtual) where bitcoin provided service – I would happily have a client software running on my computer in service of a miner – contributing my resources to the exitence of the bitcoin commons in my community.
  2. Could Bitcoin technology become a kind of social digital commons? Can a sustainable business be built around that concept?
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