Bitcoin Forum

Cross posting this from reddit, sorry if its already been posted somewhere but I couldn't find it here in the press section. Interview with Richard Brown, an IBM executive architect for banking and financial markets.

http://www.youtube.com/watch?v=VDO7TDMlxsY

I liked the point he makes at the beginning, about how the technology behind bitcoin will eventually be used for asset registrations.  Although it is not a new idea (we've been discussing it on this forum several times), we don't hear this often enough, imho.

I own company shares on the american and European stock market, and I surely would like these markets to be decentralized as bitcoin is.

I also liked what he said later about the separation of identity and asset ownership, and the possible economic innovations that it may bring.

Also this:

« The technological cat is out of the bag.  Even if the currencies themselves shutdown overnight, the core technology of distributed consensus, the core idea that actually the bitcoin and cryptocurrency model is credit transfer rather than direct debit, there is a key insight to key technologies that can be applied to how we build other systems or how we solve the clients problems. »

The tech behind Bitcoin has deep implications and this guy understands it.

Yes, a very insightful interview. He understands bitcoin 100% and understands how transformational it is.

Saw this one a while ago on finextra, but this time it's been published by http://www.ibm.com/banking <- very significant

The ultimate corporate drones are arriving in numbers ... I guess our work here is just about done.

Edit: he's actually a really good speaker and has got to the bottom of every concept investigated. This interview will be viewed as a milestone in mainstream adoption I think.

ha, I enjoyed this line: "On the blockchain nobody knows you're a fridge"

Richard Brown here.  Thanks for the comments.  fyi -  I started a thread on this when the Finextra video first went live. There were some very interesting comments there - and I attempted to elaborate/justify some of my claims in more depth.

https://bitcointalk.org/index.php?topic=316405.0

Hello Richard.

Excellent interview, its always refreshing to hear from people who know what they're talking about, and are able to see the long term potential of this technology. I would be interested to hear your thoughts on mastercoin - they are currently working on some of the potential uses that you mention.

Hi there,

Thanks for the feedback.

It's great to see the projects that are underway to make the colored coin concept a reality (e.g. mastercoin, the work being done by the bitcoinx folk and so on).

I particularly like the approach taken, I think, by killerstorm to create a theoretical underpinning for the concept (e.g. here: https://github.com/bitcoinx/colored-coin-tools/wiki/colored_coins_intro). I think the "color kernel" idea is a simple, yet important abstraction that has helped moved the debate on.

In my mental model, the colored coin concept is based on somebody asserting that "this transaction output is of color X, representing asset Y" and bitcoin transactions that transfer it are considered to be transferring ownership of the asset.  So additional meaning has been placed over parts of the existing bitcoin network but the core principles are unchanged.  I find mastercoin interesting because it takes a very different approach and so has forced me to clarify the concepts in my own mind.

The mastercoin approach doesn't share the same theoretical model as colored coins, at least not in my view.  Assuming I understand it correctly, they've pretty much decoupled their system from the underlying bitcoins that appear in their bitcoin transactions, whereas they are tightly linked in the colored coin model: mastercoin is, in effect, using several of the key services provided by the bitcoin system (consensus, 'timestamping', persistent storage, etc) but building an alternative asset scheme on top; the bitcoins that appear in mastercoin's bitcoin transactions are almost incidental. 

In this way, you can think of the classical colored coin concept as being the third layer in a stack consisting of "bitcoin network services" + "bitcoin currency" + "colored coin specialisation" -- whereas mastercoin could be thought of as "bitcoin network services" + "mastercoin asset/currency".

My model might not be perfectly accurate but I think it may explain some of the confusion.  I think it also explains why many people (myself included) find the current mastercoin implementation inelegant. The reality is that, today, Bitcoin doesn't actually offer a "persistent storage" service and so mastercoin has had to come up with a clever bending of the semantics of bitcoin transactions to encode their own transaction information inside 'fake' bitcoin addresses in their transactions. It works but "feels" wrong.  So I see the 80 byte storage option in bitcoin 0.9 as very interesting because it effectively gives mastercoin, and others, a far more elegant way to store what they need in the bitcoin blockchain.   I haven't seen the details but I imagine mastercoin bitcoin transactions on 0.9 will simply be a micropayment to the exodus address, a fee to the miner and the rest sent back as change, with the 80 byte field containing the necessary hash(es) of the mastercoin information.  As such, you could then model/interpret a mastercoin bitcoin transaction from the bitcoin perspective simply as the simultaneous consumption of underlying bitcoin network services and payment for them.

I don't have a view on which model I prefer - I find them both extremely interesting.

Richard

i agree, this was really good, thanks richard

with so much focus lately on bitcoin as an investment vehicle and making profits, its great to hear someone discuss the wider application of the technology

my favourite quote: