The good and bad of blockchain
By Rose Jacobs – There’s a drawback: blockchains have the potential to increase collusion, according to Chicago Booth’s Lin William Cong and Zhiguo He.
The researchers’ modeling, part of their research into how blockchains might affect competition, suggests that the way blockchains work as a decentralized ledger involves distributing more information, which could make it easier for competitors to quietly and often tacitly collude to keep prices high, ultimately to the detriment of consumers. But Cong and He propose a few potential remedies.
Blockchain is less well-known than Bitcoin but may have more staying power. Its main functionality is providing “decentralized consensus,” say Cong and He. In most societies and economies, parties in a contract rely on a government, court, or other third-party arbitrator to essentially oversee and enforce rules in private contracts—to provide consensus, as the researchers put it. Blockchain provides that function in a more decentralized manner by generating, storing, and distributing the record of rules and regulations.
Blockchain idealists would have all transactions stored on one chain—the one that already exists, thanks to Bitcoin. This would create a massive, democratic, stable, and unified public record. But most companies don’t buy into this vision.
Critics say this is because they want to control the chains, keeping out new competitors by using private or “permissioned” blockchains. more>
Posted in Banking, Broadband, Business, Economy, History, Net, Technology
Tagged BitCoin, Blockchain, Broadband, Business, cartel, Internet, Technology
Digiconomist – Ever since its inception Bitcoin’s trust-minimizing consensus has been enabled by its proof-of-work algorithm. The machines performing the “work” are consuming huge amounts of energy while doing so. The Bitcoin Energy Consumption Index was created to provide insight into this amount, and raise awareness on the unsustainability of the proof-of-work algorithm.
Note that the Index contains the aggregate of Bitcoin and Bitcoin Cash (other forks of the Bitcoin network are not included). A separate index was created for Ethereum, which can be found here.
To put the energy consumed by the Bitcoin network into perspective we can compare it to another payment system like VISA for example. According to VISA, the company consumed a total amount of 674,922 Gigajoules of energy (from various sources) globally for all its operations. This means that VISA has an energy need equal to that of around 17,000 U.S. households. We also know VISA processed 111.2 billion transactions in 2017.
With the help of these numbers, it is possible to compare both networks and show that Bitcoin is extremely more energy intensive per transaction than VISA. more>
CONGRESS WATCH Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies, Committee on Homeland Security & Governmental Affairs/US Senate 12 questions about Bitcoin you were too embarrassed to ask, Timothy B. Lee, Washington Post Chairman Carper statement on … Continue reading
By Nathan Lewis – The Bitcoin project is an odd combination of very advanced, Ph.D-level computer science, regarding encryption and record-keeping, and very primitive, sub-kindergarten-level monetary understanding.par
What do we want from a currency? What are the characteristics of an ideal currency, and how do we manifest those in a practical, real-life system? more> http://tinyurl.com/bq5l5bx
By Farhad Manjoo – Bitcoin, of course. Bitcoin is a ‘e2’80’9cdigital currency’e2’80’9d invented in 2009 by a cryptographic expert who went by the pseudonym Satoshi Nakamoto, but whose true identity remains unknown. It exists only in computers, minted at a regular rate by a network of machines around the world, and its value isn’e2’80’99t regulated by any government. The currency, like its creator, clings to the shadows. Bitcoins are like cash in that they aren’e2’80’99t tied to your identity, and transactions made with Bitcoins are irreversible and untraceable. But they’e2’80’99re like credit cards in that they aren’e2’80’99t physical.par
After taking its $21.51 processing fee, the firm transferred my $1,000 to Bitfloor, one of the many online Bitcoin exchanges where people trade Bitcoins for cash. I immediately put in a purchase order, and within seconds the deal was done. I was the proud owner of 7.23883 Bitcoins, which I’e2’80’99d purchased for about $138 each. If I sold my coins now, my original $1,000 investment would be worth $1,700’e2’80rdblquote not a bad return in less than a week’e2’80’99s time. more> http://tinyurl.com/d8t7gexpar
By Paul Ford – One of the oddest bits of news to emerge from the economic collapse of Cyprus is a corresponding rise in the value of Bitcoin, the Internet’e2’80’99s favorite, media-friendly, anarchist crypto-currency.par
Bitcoin was created in 2009 by a pseudonymous hacker who calls him or herself Satoshi Nakamoto (and who might be several people). It’e2’80’99s a form of virtual cash used to buy goods and services online. Even by Web standards, it’e2’80’99s a strange and supergeeky phenomenon. This is what happens when software and networks meet the concept of currency, when you take peer-to-peer networks and advanced cryptography and ask, ‘e2’80’9cHow can I make a new economy?’e2’80’9dpar
There are 10,952,975 Bitcoins in circulation. (With a digital currency you can be specific.) more> http://tinyurl.com/cv9zn4m