Satoshi Nakamoto

You Can Now Book a Hotel Room with Bitcoin at Over 200,000 Properties

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Cheapair.com has been leading the way as far as providing consumers with the ability to book travel services with Bitcoin. I first highlighted the company back in November of last year when they announced airfare purchases for BTC. Well it turns out they had such success with that rollout that they are going to offer … Read more

Time to Say Goodbye to 2013 with “A History of Bitcoin” Timeline

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There is no doubt that the most important story of 2013 from an economic and monetary perspective was Bitcoin. Whether you love it, or thinks it’s “evil” like statist lemming leader Paul Krugman, this was the year in which decentralized, crypto-currency first entered human consciousness, a concept which is unlikely to go away any time … Read more

“A Shit Load of Money” – $147 Million Moves in One Bitcoin Transaction

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Early last night, a massive Bitcoin transaction went down. A transaction worth an incredible $147 million with several sending addresses involved. As I have mentioned in a previous article, you can attach messages to Bitcoin transactions and tagged to this one was simply: “Shitload of Money!” The world of Bitcoin is abuzz with speculation as … Read more

Five Years Ago Today Bitcoin was Born – Read Satoshi’s Original White Paper

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As all of my readers know, I am a huge supporter of Bitcoin for many reasons. What you may not know, is that five years ago today a still unknown individual(s) known by the pseudonym Satoshi Nakamoto released a white paper titled: Bitcoin: A Peer-to-Peer Electronic Cash System. The paper announced the Bitcoin concept to the world, and described how the network would deal with the wide variety of problems that might be encountered within the context of such an ambitious project.

Here is a screen shot of the original email:

Screen Shot 2013-10-31 at 3.33.45 PM

I just read through the entirety of the white paper and it is quite fascinating to observe the creator(s) thought process. Below are some of the excerpts I found most intriguing:

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments…While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.

What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.

If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of the block and all blocks after it and then catch up with and surpass the work of the honest nodes. We will show later that the probability of a slower attacker catching up diminishes exponentially as subsequent blocks are added.

On Incentives…

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Jeep Dealer in Kansas Now Accepts Bitcoin

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Norman Vialle is leading the way as far as merchants beginning to accept Bitcoin for big ticket items.  The owner of Overland Park Jeep Dodge Ram Chrysler in Kansas City has become the first car dealer in the United States to accept Bitcoin.  Despite the recent price volatility, stories of more mainstream adoption continue to come in at a rapid clip.  From a New York property developer’s decision to accept them as rent payment, to popular online dating site OK Cupid announcing acceptance.  Now we can add car dealerships to the list.  From the Wall Street Journal:

Norman Vialle, a 53-year-old car dealer in Kansas, invested in his share of winners and losers during the Internet bubble of the 1990s. Now he is clinging to a stash of Bitcoin, even though the fledgling virtual currency has lost about 70% of its value in the past week.

“It’s volatile because it’s new, but it’s still a lot higher than it was a month ago,” Mr. Vialle says.

In addition to investing in the currency, Mr. Vialle recently began accepting bitcoins for payment at Overland Park Jeep Dodge Ram Chrysler. One of his customers is planning to pay for a $40,000 Jeep with the currency next month.

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So Where Can You Spend Your Bitcoins?

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When I get excited about something it’s really hard to get me to shut up.  So over the past several days I have spouted excitedly about Bitcoin to anyone and everyone I have come across.  The most common question I have gotten is: “it sounds cool, but where can I spend them?”  Most of us know … Read more

Bitcoin Goes Parabolic: My Updated Thoughts

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Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative.

– Nassim Taleb on Reddit yesterday

So Bitcoin has finally dipped its electronic toe into the fringes of mainstream consciousness. The results have been, to put it mildly, explosive, divisive and highly emotional.  I can see why.

While I had been aware of it prior, I never truly became curious about Bitcoin until I read an excellent six page article about it in the New Yorker on October 10, 2011.  I had no clue how the technology worked, but it intrigued me to such a degree that I sent it to my email list of close contacts.  What really struck me was the rationale for creating Bitcoin by its creator, the anonymous “Satoshi Nakamoto.”  This cryptographer was well aware of the cancerous nature of the world’s monetary system and the key role of Central Banking in that system.  This wasn’t just some technology geek playing games with virtual currency, this was a well thought out monetary revolution.

He had thought this entire thing out like a chess grandmaster.  He knew he had to be anonymous and that Bitcoin had to be decentralized, because he knew the Central Bank overlords would fight to the death to protect their money monopoly.  He created a currency that central planners could not naked short to infinity and manipulate with derivatives as they do with the precious metals markets.  It was this foresight that has led to its tremendous success today.

It wasn’t until I started accepting Bitcoin donations in September of last year (donate here) that I truly started gaining a small understanding of the technology and who the major players in the “Bitcoin Economy” are.  It was at 10 back then, it is 73 as I write this today.

BTC

A chart like the one above is nothing short of parabolic, and parabolic charts beget parabolic emotions.  From my end, I have received some complaints from “gold bugs” who seems annoyed that I am highlighting Bitcoin seemingly in preference to precious metals.  To them I have a few things to say.

First, I spent four years writing about gold and silver non-stop.  Sorry, it just gets repetitive and boring.  Never once have I wavered in my conviction on the need to buy and hold these metals; however, the world is dynamic and when new things enter the picture I will formulate new thoughts.  Some of the complaints against Bitcoin are valid, others are not.  The one I hear the most, which is completely untrue, is that Bitcoin is another “fiat currency.”  I’m often shocked that people make this error, as the definition of fiat is: 1. A formal authorization or proposition; a decree and 2. An arbitrary order.  Synonyms include: decree, diktat, directive, edict, rescript, ruling.  Bitcoin is 100% voluntary.  No one is declaring it the “money of the land,” forcing you to pay taxes in it, or invading the Middle East to protect the pricing of oil in it.  So let’s move on.

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