bitcoin Posts

Cryptocurrencies as a transport layer; or, what’s wrong with Stellar

About two weeks ago Stripe published a blog post which articulated the promise of Bitcoin more succinctly than I’ve read anywhere else; in short, the post draws Bitcoin (or a derivative cryptocurrency) as the transport layer of a new digital economy. If you haven’t read that post yet, I encourage you to read it before reading this one—it does a good job of explaining concepts in a way that might even make sense to non-technical readers, and I will be building on those ideas in this post.

The Stripe post highlights an idea that I’ve harboured since the first time I heard about Bitcoin; basically, that its greatest value lies in its utility as a medium of exchange. Money moving around the world as freely as information does today. Transaction costs reduced to the point where it would be feasible for the New York Times to charge you ten cents for every article you want to read instead of shoving ads in your face. And consumers with the option of making international payments via their local credit union instead of the credit card and wire transfer oligopolies.

Bitcoin: An Introduction For Traditional Small Businesses

Last week, announced that they would begin accepting Bitcoin as payment. As the juggernaut behind the internet’s most popular blogging platform, they are probably the most high-profile company to accept Bitcoin so far—at a time when most of the world has never even heard of it. (The Economist wrote a largely dismissive article about Bitcoin last year, and The Good Wife had a somewhat misguided episode featuring Bitcoin—don’t ask me how I know that—but the population at large hasn’t really caught on.)

So what is Bitcoin? Bitcoin is a burgeoning new digital currency; a medium of exchange (money) without any governing body. It’s fascinating in many respects—besides being entirely decentralised it implements an ingenious mining system whereby new Bitcoins are added to the economy in exchange for computing power and inflation rates are pre-defined. Bitcoin began three years ago; the entire Bitcoin economy today is worth over $100 million USD and growing [1].