A very decent explanation for those not wanting to read the technical paper:
“There’s no easy way to explain Bitcoin, but let me wave my hands and try: When you go to the ATM at a store and get money to buy a six-pack, you put in your bank card. The transaction processor verifies it somewhere in the ether, takes a fee, and spits out cash. It’s all powered by software. OK, deep breath. Acquiring Bitcoin is like using an ATM, except instead of government-backed money you get proof that a computer somewhere solved an automated puzzle faster than other computers, and instead of using an ATM card you’re using an auto-generated token that only you have, and instead of connecting to a bank you’re connecting to a decentralized network of computers that collectively maintain and update copies of a massive historical database of transactions—and that also collectively validate transactions, using, well, math, and spit out new Bitcoins from time to time, to reward the puzzle solvers. Slow exhale. Almost there. And instead of buying a six-pack from someone behind a counter, you’re transferring some amount of Bitcoin to another anonymous token. Over time, all the transactions that people make get lumped into blocks and validated, and they get a special code that takes into account all the codes in the blocks that came before, and thus you have it: a blockchain. According to Bitcoin.org, the Bitcoin blockchain is about 145 gigabytes, though it will be bigger by the time you read this.”
Source: Bitcoin Is Ridiculous. Blockchain Is Dangerous: Paul Ford – Bloomberg
The author goes on to write:
“The current wave of coins will eventually ebb, because it’s a big, inefficient, unholy mess. It’s more ideology than financial instrument, and ideology is rarely a sustainable store of value. Plus, transactions are slow (everyone says they’re fixing that), and you shouldn’t have to use an aluminum smelter’s worth of power to make new currency.”
The article spot lights some very scary ramifications of blockchain technology, such as encoding a permanent record of allegations (not convictions) that would tarnish individuals for life as it could not be deleted.
Read the whole article to get an un-hyped perspective on bitcoin and blockchain technology.
Why the Bitcoin bubble may explode when it pops:
One reason for regulating blockchain-based cryptocurrencies, also known as digital tokens, is the growing concern that the virtual money they represent could be used for nefarious activities, such as money laundering. Cryptocurrencies could also be a threat to the current financial system because they have at times encouraged unbridled speculation and unsecured borrowing by consumers looking for a piece of the crypot action.
Source: Governments eye their own blockchain cryptocurrencies | Computerworld
Government or central bank issued, blockchained-based cryptocurrencies could be far more useful for legal transactions than the underground currencies like Bitcoin. Bitcoin is great for secret or questionable transactions that do not want to be tracked, of course, but most transactions are not in the camp.
(Note “blockchain” is an important bit of technology that has numerous applications other than cryptocurrencies.)
Autonomous self-driving cars are continuously surveying their surroundings using an array of sensors and recording this to memory.
In the event of an accident of malfunction, this data can be retrieved for analysis.
However, this data could also be retrieved as surveillance data – even when the vehicle itself has not been in an crash.
Consider, a bike versus human driven car crash at an intersection. Two other vehicles at the intersection are autonomous vehicles and they have recorded the entire scenario, in detail, including subject and object positions and travel speeds.
All of this data is available to the police. Police agencies that today operate their own license plate readers and intersection surveillance cameras might choose to contract with autonomous vehicle companies for use as public data collection systems. When your autonomous vehicle is connected to your EV charging station, it might communicate over WiFi to upload collected data to a master database.
This is not particularly difficult or far fetched and police may already have the legal authority to pursue this collection.
Source: Why cops won’t need a warrant to pull the data off your autonomous car | Ars Technica
Study finds that 2 in 3 jobs in Las Vegas may be automated by 2035. That’s just the headline.
The real story is that 50% or more of jobs in most metro areas at a risk of automation by 2035. Areas in yellow, orange and red indicate where more than 50% of local jobs are at risk of being automated by 2035.
Source: Future job automation to hit hardest in low wage metropolitan areas like Las Vegas, Orlando and Riverside-San Bernardino | ISEA
Studies like these should be viewed as “possible scenarios” and not as absolute predictions for the future.
Automation has been happening for a hundred years. New, low cost technology enables automation to be applied in places where it was previously cost prohibitive or the tasks were too difficult to automate. This change is happening quickly.
Again, as frequently noted on this blog, automation is happening. The rapid increase in minimum wage and benefit requirements is accelerating the trend towards automation, improved work place efficiency and variable cost cutting – and a loss of many types of jobs (not all job losses will be low skilled either).
“Other nations have responded with smart, well-funded innovation policies like better R&D tax incentives, more government funding for research, more funding for technology commercialization initiatives.”
Source: The U.S. Drops Out of the Top 10 in Innovation Ranking – Bloomberg
Basically, the bastions of free market capitalism want taxpayer funded subsidies like everyone else.
Over the past year or two, as block size limits have been reached, Bitcoin has evolved to become better-suited to being an asset than being a means of exchange. Given the overall success that the Bitcoin community has achieved, it’s hard to quibble with the decisions that have been made along the way. (And we’re certainly happy to see any novel, ambitious project do so well.)
This has led to Bitcoin becoming less useful for payments, however. Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount.) Furthermore, fees have risen a great deal. For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires.
Source: Ending Bitcoin support
There are downsides to blockchain technologies and processes (blockchain algorithms power Bitcoin and other cryptocurrencies):
Each purported use case — from payments to legal documents, from escrow to voting systems — amounts to a set of contortions to add a distributed, encrypted, anonymous ledger where none was needed. What if there isn’t actually any use for a distributed ledger at all? What if, 10 years after it was invented, the reason nobody has adopted a distributed ledger at scale is because nobody wants it?
Source: Ten years in, nobody has come up with a use for blockchain
I suspect there are good uses for blockchain, however, the point is well taken. In the 1980s, I worked at a company that built a spreadsheet product that was so simplified that people who did not know algebra could use it. This seemed like a great break through. What was the problem? People who did not know basic algebra concepts did not have problems in life requiring a spreadsheet!
In other words, the technology was great but completely missed the target audience.
The linked article identifies many disconnects between proposed blockchain use cases – and the real world. A very interesting read.