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Author Topic: WHAT ARE THE LIMITS OF BTC ? - PART ONE  (Read 922 times)
Michele1940
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June 25, 2011, 06:58:43 AM
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I apologise if my English sometimes cannot be up to the level it should be to discuss things of this kind but I am sure I will manage to get to the point (somehow).

First of all , I would like to address you guys to my previous posts NEW WORLD ECONOMY - PART ONE & Bitcoin Paradigm.

Now, what is the main purpose of BTC ? Satoshi Nakamoto,  presenting the project, writes as follows:


Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.


So BTC is a solution to a specific problem i.e. " .....a solution to the double-spending problem ....."

If you read my posts with ONLY this goal in mind, surely we will never understand each others. Ok, my wrong choice to post into this blog, probably. I might agree on that, or at least on what it appears to be.

In my post Bitcoin Paradigm, I stated that BTC is merely a tool that might be useful to implement the " Paradigm shift".

Obviously the Paradigm Shift to which I refer to in that post is much wider that a solution to double-spending problems that occurs in transactions. What I am suggesting is that the economy as it is today (taken in its widest meaning ) is obsolete and that we are all understanding this by noticing those that I have described as "anomalies " in the current system.
This is probably the main reason why so many people are investing so much intellectual's capital into BTC, I guess. Again, double-spending problem on transactions is just a specific anomaly of the whole system that is now being analyzed by many, thanks to BTC' s inventor. But this is only one of the many anomalies that are inherent in the present economic system.

Needless to say that it is the technology progress that allows all of us to see this specific anomaly and many others. With technology, we have reached a point where people can actually become Prime Actors in the economic system rather than being just passive. See Mr Google interview : 

http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CEO_Eric_Schmidt_2229


I am not suggesting that Mr Schmidt has in mind what I have in mind, but clearly he is drawing a pattern where the main focus is on people using the internet ( which is nothing new to Google ). Only this time there is a difference. They want you to let them know what you want. And I am not talking about what kind of app would be most useful or staff like this. They want to know from us what we would like to buy and possibly when we would by what we want. Google, in my opinion, has simply found another anomaly in the economic system. And this one has nothing to do with transactions at all.
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June 26, 2011, 12:45:51 PM
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Huh?

I think you need to put that part of the abstract into context

Quote
A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.
The network timestamps transactions by hashing them into an ongoing chain of
hash-based proof-of-work, forming a record that cannot be changed without redoing
the proof-of-work.

He is not referring to double-spending in the current economic system. Currently, they go through third party institutions that you trust that prevent as much as possible people double spending their money and over withdrawing their account, security, etc.

Digital signatures provide the part of solution of sending BTC from me to you, but they need a mechanism to prevent me spending those coins twice or more.
The mechanism to prevent double-spending in Bitcoins is the transaction block ledger, which is the peer-to-peer database that timestamps transactions by hashing them onto the ongoing chain.
Read the whole of the paper to understand exactly what he means, its not that long.

I don't think BTC was created with the idea in mind to prevent double-spending that may or may not be present in our economic system. Preventing double-spending is just an essential, most fundamental quality of any transaction.

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