Bitcoin Forum

To use Bitcoin, you traditionally download the client software [...]

 In order to get this wallet on your computer, you simply download it like any software.

twice?  ???

be as non-confusing as possible for non-techies! also don't use words like "client software".  :)

People should grow up.

Great Post! I love reading bitcoin articles from people who genuinely 'get it' :)

The press conferences of someone like Bernanke would become less and less important, because the currency he printed would be used in narrower and narrower circles. Instead of fighting the government, Bitcoin enables individuals to sidestep it - to ignore it to a large degree.

Taking down Bitcoin websites would be like cutting the heads of a Hydra - for each successful severance, publicity and the profit motive would compel more sites to spring up (case in point: how many file sharing sites exist, other than MegaUpload?).

Bitcoin is a highly volatile commodity with an extremely uncertain future. Grandmothers should not be putting retirement money into Bitcoin (nor in US dollars, for that matter).

Hi all,

Earlier this week I was a guest on a radio show (Declare Your Independence with Ernest Hancock). During the interview, the host asked/demanded that I draft up a comprehensive overview of Bitcoin for those who were totally oblivious, and this would be released in the Freedom's Phoenix magazine today (April 13) for their April issue.

So of course I did, and the piece is now finished and published today. This is a primer on Bitcoin for liberty-minded folk, covering the topic from the lens of a non-techie libertarian. Even covering topics briefly, the document ended up at 14 pages single-spaced.

I've now republished this on my blog, so feel free to read and comment and copy and distribute at your leisure.

http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-introduction.html (http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-introduction.html)

I'll also be back on the radio show next week, to further discuss with the host and his audience why Bitcoin is the best thing to happen to human liberty since the internet.

Yeah that one made me cringe a little. Feel free to take and modify some of these:
"like a struggling life form that will survive as long as there is air to breathe"
"like a forest that will always regenerate as long as there's a little sunlight"
"like a bonfire that will keep burning as long as there is kindling somewhere in the world"
"like hot custard that always grows a thick skin, no matter how it gets stirred."
"like an Olympic torch that keeps on burning, as long as there is someone to pass it on to."
 :)

Nah I love the metaphor and I have lost two family members to cancer. People should grow up.

Very nice piece of work evoorhees, the best description of Bitcoin for non-technical yet intelligent people I have read thus far.

+1
It always makes me feel better to know some other people realize what is happening, and maybe I'm not so crazy. :D

Great read, even for those who just want Bitcoin to be the currency of the Internet and not the world.

Thanks for the link to Seals. SealsWithClubs.com is wrong but does forward to SealsWithClubs.eu so it's not that wrong.

Put this wallet.dat file on a USB drive in your safe or mail it to your parents. Burn it to a CD and put it in a bank safety deposit box. Put it on a different computer. You can even email the file to yourself. Better yet, do two or three of the above. You only need to back up the wallet file once at the beginning (you don't need to do it every day or week, etc), and you should do it before you've received any money. Back it up, keep it safe, and the likelihood of you losing your Bitcoins will be lower than you dying in a car crash. If you don't back it up, the likelihood of you losing your coins is almost guaranteed.

Maybe it is smarter now and allocates 10K addresses for itself so that you don't need to be backing up all the time.

It does this, only with 100 keys. See wiki: key pool.

Yeah the wallet has 100 addresses ready in its queue - most casual users are not going to use more than this (especially for a crucial savings wallet - it'll probably only have a few addresses used), and I'm quite sure the deterministic wallets will become standard, so the potential problem of which you speak should go away on its own. I was trying to make the article somewhat future-proof (and had to keep it simple), so I didn't delve into nuances like this.

100 transactions ever isn't that unlikely. And probably by the time they are putting serious money in and then retrieving their backup they'll be past that. It is sends (new change address) and newly generated payment addresses (used or not, click that button 100 times and your backup won't work from that point).

Maybe devs could change the default to 1000 if bulk generation can/is done smoothly now. But that's still not foolproof.

Yeah, 1000 isn't that big of a deal, and really 10000 isn't either (as far as storage). This extra bit of data will make it so backups for 99.99% of people would be unneeded, which is awesome.

Bitcoin is thus the only currency and money system in the world which has no counter-party risk to hold and to transfer. This is absolutely revolutionary and you should read the preceding sentence again. Gold advocates will point out that physical gold bullion has no counter-party risk, but that is only true for storage in your own home. Store it in a vault or bank and you have counter-party risk. And sending gold? You have to trust all sorts of people if you wish to transfer your gold somewhere else or spend it across distance.

You can assume no government wants you to adopt this system in any capacity, and for that reason alone it's worth consideration by honest, moral, and industrious people.

How the hell am I suppose to enjoy reading this diatribe if I keep finding errors. This is the second one found about 3/4 of the page down.


(or is it: ...wants you adopting this system...?)

Damn, I enjoy this article so, so much.

~Bruno~

How the hell am I suppose to enjoy reading this diatribe if I keep finding errors. This is the second one found about 3/4 of the page down.


(or is it: ...wants you adopting this system...?)

Damn, I enjoy this article so, so much.

~Bruno~

What's incorrect about that?

I added the to, for it was missing.

Oh I get it now, sorry!

I think it's only fitting to post this piece on the 5th most visited libertarian website, right?   8)

http://www.dailypaul.com/226936/if-the-government-hates-it-dont-you-think-you-should-at-least-consider-learning-about-it

Furthermore, Erik is also a partner in a couple top-secret super-subversive Bitcoin-based projects...

LOL well thank you Bruno, I've made the change according to your recommended edit.

Just now getting around to reading it. This is one great article, albeit I did find an error.

Actually this particular paragraph might contain a slight overstatement: it's more accurate to write that bitcoin allows us for the first time in history to spread the counter-party risk on the entire community (of miners) instead of relying on a single counter-party (single point-of-failure).
As such, bitcoin can be said the first ever "community based" monetary system, one that cannot be easily hijacked by a small group of people.

The best article about Bitcoin I've read to date (and I've read them all).

I think it's only fitting to post this piece on the 5th most visited libertarian website, right?   8)

http://www.dailypaul.com/226936/if-the-government-hates-it-dont-you-think-you-should-at-least-consider-learning-about-it

I wrote the above comment before I read the article and the bitcoin.org website. I did this deliberately since I wanted to lay down the foundation of how money comes into existence and what money is.

There is no question in my mind that the bitcoin is indeed money and harnesses all the features of gold and silver while wedding them to the Internet in a peer to peer payment system. The creators of bitcoin have used an analogy of gold and gold mining to create their system and this is justifiable I believe.

The Land in this case is the pool of talent within the bitcoin community and the Labour is the application of the efforts of the original source code creators and the "miners" who bring the blocks of bitcoins into existence. It is then easy to see that bitcoins are genuine money.

Now, there are other features that I find interesting and intriguing. There is another analogy that can be used to understand this phenomenon. This is the formation of a corporation with a block of "authorised share capital" and a block of "issued and outstanding share capital" . The authorised capital would be the c.21 million bitcoins that can be created over time. The issued and outstanding capital consists of the bitcoins that have been issued to date. The business of the corporation itself is the payment system that bitcoin facilitates and represents.

When one sees it in this way then it is obvious that by becoming an early adopter (shareholder) of bitcoin there is a very real possiblity that one couild profit as the payment system is used more widely and the value of the "corporation" and therefore the price of the "shares" increase. The fact that the number of "shares" that can be issued is finite leads to an even greater likelihood of appreciation in the price of bitcoins.

The same caveats as investing in a "venture" company apply but since the system is already up and running and there are more and more joining every day (61,500 bitcoins traded on just one exchange today) the risks are less than one might imagine. Of course one must be circumspect but it might be worth a flutter.

The other feature I liked was the potential link with gold and silver. I use a Goldmoney account and since last year they have stopped offering inter-account transfers under pressure from the government. Eric Voorhees advertises a website offering gold and silver coins for bitcoins and it may well be that Goldmoney will do the same at some point. Then one could use gold and silver as stores of value and "earn" bitcoins on various websites offering payment in bitcoins for filling out surveys, reading adverts etc. The bitcoins could be used to trade for goods and services and to purchase gold and silver to spread the risk and create a store of value.

All in all I agree that when Dr. Paul is President and the market is opened up to competing currencies, removing the threat of government interference, the bitcoin system will come into its own. There is no doubt it has been created for such a time as this. I am not too surprised that it is opposed by the von Mises Institute. They can be quite doctrinaire. They also oppose Professor Fekete's ideas on Adam Smith's Real Bills Doctrine. However they are free market advocates also so that will put everything to the test.

BTW Bitcoin also mentions fractional reserve banking being used to increase the money supply. This is not something I would agree with since I believe it to be fraudulent but it may not last long since in the first place a bitcoin/gold/silver system would tend to be deflationary and this makes all borrowing less attractive. Secondly the existence of fractional reserves would have to be declared and people would be unlikely to provide savings to such an enterprise since other safer options would be available. It would take only a couple of bank collapses to put an end to that way of doing business.

I was trying to make the article somewhat future-proof (and had to keep it simple), so I didn't delve into nuances like this.

It's better to say nothing about wallet safety than to say things you know are factually incorrect and dangerous.

An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:
Reverse transactions that he sends while he's in control
Prevent some or all transactions from gaining any confirmations
Prevent some or all other miners from mining any valid blocks

You DO only need 1 ounce of gas for your airplane... There's just a caveat. The caveat is when you try to actually fucking take off.

"Sorry, my goal was to write a concise article on Bitcoin."

Edit: Factually correct statements - killing people since the birth of evorhees!

Don't be a fool. You know damn well that the keypool had 100 addresses, so the analogy would be more like "here is enough gas to get you there, but it might not be enough to get back". Or even "here is enough for a few round trips, but you will have to learn how to refuel eventually".

If you are so good at writing concise, understandable articles that are suitable for a reader to digest in one sitting - well then be my guest. Everyone will thank you for it.

I'm afraid that last sentence isn't factually correct.

So you agree that you can't do much better and therefore need to STFU?

Here's another one: "Nobody can prevent you from spending it."

The bitcoin wiki saves the day:

Here's another one: "Nobody can prevent you from spending it."

The bitcoin wiki saves the day:

there's no other way it profit from such an attack

This statement isn't factually correct. There may be many additional incentives.
For example, a bank could profit financially from destroying Bitcoin's image because people would return to the traditional financial system. At $84,349.58 (http://bitcoin.stackexchange.com/a/1094) for a one-day 51% attack*, I'd say it's chump change for financial institutions; add in a couple of double-spends, and you'll not only fuck Bitcoin permanently, but even profit!

* Cost amortized over a year of operation. (Caveat will be removed for conciseness.)

You can't add in a couple of double-spends, you can only pull of one double-spend before everyone on the network realises there is something very wrong, at which point everybody will stop accepting bitcoins until the attack is over. Once the attack is over, the network will resume functioning as normal. A one-day 51% attack doesn't fuck Bitcoin permanently, it only fucks Bitcoin for one day.

I, for one, would leave Bitcoins altogether if someone was trying to forceably control the Bitcoin network with > 51% of the hashing power.  And I know I'm not the only one...

I don't think the miners qualify as counter-party risk. In fact, if they all stopped, I could mine myself ;)

Of course, we could also say Bitcoin has counter-party risk in the internet infrastructure itself... I rely on the cables and electricity and servers. But I think that starts becoming a meaningless definition of "counter party risk".

It is the fact that no single entity or organization is vulnerable or can halt the payment or holding of Bitcoin. THAT is the breakthrough and I thus I think the statement "no counter party risk" is valid.

As such, bitcoin can be said the first ever "community based" monetary system, one that cannot be easily hijacked by a small poor group of people.

To be perfectly fair, I can see how Erik feels the need to make Bitcoin seem like the ultimate thing with absolutely no flaws, seeing how he has a vested interest in seeing it prosper so that he can profit from the increased exchange rate.

It is a crime against polite society to advocate superior alternatives, for by doing so, matters may be improved and people made better off!