A tremendous piece of writing — thank you!
The best point is the irreversibility of payments as it pertains to small “cash” amounts. Decentralization and the accountability of the ledger allows for transacting parties to assess their own risk thus removing that burden from the transaction system — namely Visa and MasterCard. This results in a direct correlation to the fee disparity between Visa (10–30 cents) and BitCoin at scale ( << 1/10th of a cent). Nodes provide the burden of accountability but not mediation . in bitcoin mediation is left to 3rd parties and this opens up small value transactions to occur “free and easy” from the burdens of dispute.
A simple example would be Hilarist, an online comedy store, selling 4 penny joke-saving services. Customers not satisfied with the service are unable to complain to a central monetary party if they feel slighted as BitCoin transaction processors are distributed (decentralized and operating by strict protocol) — thus they can either choose to forfeit to pennies to bad decisionmaking or open up their own litigation and take on that added burden of time and money themselves. I hadn’t thought of thinking about BitCoin this way and read right over that detail in the white paper! The brilliance here is in line with your unique thinking in your network security career— IT security viewed thru the lens of economic risk vs cost of additional security considerations. Again you prove why you are Satoshi and not just a coder forking other people’s inventions.
The only part I disagree is categorization of gold as an incomplete form of money — or as a token representing value of other goods. Gold is a proof of work — as evidenced by your correct historical categorization of gold mining producing occasional “mother lode” periods when gokd suddenly cheapens itself and causes near-term instability in markets standardized upon it. Gold isnt a token but an asset with its own supply demand complexities. It just so happens to be relatively stable proof of work vs other commodities — so long as alchemy remains a failure! Gold will always compete as money much as wampum or grain or any other commodity can. Bitcoin’s hidden gem is its potential use as data store and data transaction device. In this respect processing becomes the proof of work which makes BitCoin the worlds commoditized form of computation.
There is no fear of governments shutting down BitCoin any more than governments shutting down the production of oil gasoline or alcohol. BitCoin will persist legally it illegally depending on jurisdiction and local custom. Adopt or ban it as you like but as a commodity representing computation it will always be legal somewhere so long as humans have access to a unified network of computation.
Certainly governments can temporarily greatly hamper ButCoin — but such an undertaking will eventually lose just like a War on Drugs or Alcohol Prohibition are costly boondoggles best avoided by smart governments wishing to establish mutually beneficial growth economies. Governments would do best to embrace BitCoin as it grows just the same as embracing electricity or petroleum in the past has led to modern societies lacking the many problems of societies who do not embrace such advancements.
Gold is a proof if work commodity and so is BitCoin. To stop either entirely one must immolate oneself. Why would any sane government ban electricity? Why would any sane government ban BitCoin? Just because computation network coins make for ideal money?
BitCoin is not a token — it is an asset. A Zimbabwe dollar or Turkish Lira backed by BitCoin would be tokens — BitCoin is a commodity. BitCoin is quantized fungible bounded computation.
https://link.medium.com/3mtZ6sjki6
Thank you for inventing it! Amazing.
