A Business Primer on the Bitcoin Ecosystem - Erik Voorhees

[Yankee (BitInstant)]

Hey All,

Erik wrote a fantastic post which came out of our need to have a 'Bitcoin business primer' to educate our partners and associates.

It's a nice read, feel free to comment and make suggestions for additions.

A Business Primer on the Bitcoin Ecosystem

Erik Voorhees
June 29, 2012

Summary
The following is a primer on the new financial technology known as “Bitcoin.” It describes the utility of the system, the types of companies and individuals who use it, and some of the risks and opportunities presented.

http://blog.bitinstant.com/blog/2012/7/5/a-business-primer-on-the-bitcoin-ecosystem-erik-voorhees.html

EDIT (Updated): Direct link: https://dl.dropbox.com/u/14454595/Bitcoin%20Business%20Primer%20-%20Erik%20Voorhees.pdf

-Charlie

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[Serge]

quick clarification: HTML is not a protocol, HTTP is (may not matter for non-techies)


good read overall

[acoindr]

quick clarification: HTML is not a protocol, HTTP is (may not matter for non-techies)

Non-techies probably wouldn't catch it, but non-techies often do find actual techies to help them understand things and form opinions.

I think it's better to be accurate. I would replace 'HTML' with 'HTTP' and maybe just add in parenthesis "what largely powers the Internet".

[bracek]

typo

PayPay, by contrast, only works in certain countries

[acoindr]

Okay, while we're all picking Erik's post apart (sorry, Erik, if our writing was as publicly in demand as yours we'd have to endure the same ) I would definitely capitalize "internet" as a proper noun.

Other than that, yet another fantastically coherent, educational post from Mr. Voorhees!

I particularly think this line should be blurbed out to news outlets:

All money is essentially digital in today's modern world, yet still it requires tremendous delay and burden for many functions. There is no reason that a digital payment of US dollars from one country to another should take a matter of days, when a digital email is sent and received in a second. Bitcoin makes money as efficient as email.

[jim618]

A good introduction for business people.

There are a couple of acronyms (AML, KYC) that would I think benefit from a quick (anti-money laundering) and (know your customer) after their first use.


I know the doc has a business focus, but it might be worth adding that the majority of bitcoin software is open source and hence is available for businesses to reuse / customise for their own purposes for absolutely no money at all. There are no licences for any technologies or patents or anything.

[mcorlett]

Further, Bitcoin payments cannot be reversed, meaning a merchant can feel completely safe receiving a Bitcoin payment, because it will not be withdrawn days or weeks later.

Really? This is the second time Mr. Voorhees doesn't have his facts right.

[evoorhees]

Further, Bitcoin payments cannot be reversed, meaning a merchant can feel completely safe receiving a Bitcoin payment, because it will not be withdrawn days or weeks later.

Really? This is the second time Mr. Voorhees doesn't have his facts right.

A Bitcoin payment can be reversed?? Might want to let the devs know.

[evoorhees]

quick clarification: HTML is not a protocol, HTTP is (may not matter for non-techies)

Fixed, thanks.

typo

PayPay, by contrast, only works in certain countries

Fixed, thanks.

I would definitely capitalize "internet" as a proper noun.

Fixed, thanks.

There are a couple of acronyms (AML, KYC) that would I think benefit from a quick (anti-money laundering) and (know your customer) after their first use.

Fixed, thanks.

[mcorlett]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

[Stephen Gornick]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

Dude, come on.

[Piper67]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

Dude, come on.

Reading through the other thread, I doubt mcorlett understands the requirements, and limitations, of the 51% attack.

[rjk]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

Dude, come on.

Reading through the other thread, I doubt mcorlett understands the requirements, and limitations, of the 51% attack.

I'm sure he does, he's just being obtuse and Luke-Jr-ish.

[evoorhees]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

LOL mcorlett... that's like saying physical cash payments are "reversible" because after you accept the cash thieves could break into your store later that night and steal the cash.

[Piper67]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

Dude, come on.

Reading through the other thread, I doubt mcorlett understands the requirements, and limitations, of the 51% attack.

I'm sure he does, he's just being obtuse and Luke-Jr-ish.

Either way, good job Erik... that article is about the purest distillation of Bitcoin I've come across yet.

[cypherdoc]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

LOL.  care to give us some examples?

[rjk]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

LOL.  care to give us some examples?

Obtain 51%
Roll back the tx log.

What he is saying is correct, but like evoorhees said above, it's like saying that cash is reversible because thieves could break in and steal it. Obtuse.

[cypherdoc]

A Bitcoin payment can be reversed?? Might want to let the devs know.

Yes, using the 51% attack.

LOL.  care to give us some examples?

Obtain 51%
Roll back the tx log.

What he is saying is correct, but like evoorhees said above, it's like saying that cash is reversible because thieves could break in and steal it. Obtuse.

i meant examples of it actually happening so we can become scared.

[mcorlett]

Reading through the other thread, I doubt mcorlett understands the requirements, and limitations, of the 51% attack.

If you think I am at fault, please feel free to point out specifically what you're referring to. It's hard to respond when you don't know what someone is talking about.

I'm sure he does, he's just being obtuse and Luke-Jr-ish.

There is something about that word that brings back memories of The Shawshank Redemption.

LOL.  care to give us some examples?

I believe it's been done on the testnet and on some alternate chains, where it is not economically difficult.

LOL mcorlett... that's like saying physical cash payments are "reversible" because after you accept the cash thieves could break into your store later that night and steal the cash.

No. It's not. The equivalent to what you describe would be the thieves breaking into your store and stealing the private keys.

[Nyhm]

This is overall very solid and especially informative for non-tech folks.

My favorite quote: "Bitcoin makes money as efficient as email."

My least favorite quote: "... this was thought to be impossible until Bitcoin accomplished it"

I wouldn't say "thought to be impossible," because surely many cryptographers probably thought it was possible (somehow). I studied digital currency in grad school and recall papers (sorry, no references) discussing just such topics, although I cannot say for certain if they provided any workable solutions. Bitcoin certainly solves the problem in a brilliantly elegant way. Pedagogical arguments aside, the statement just doesn't sit well with me.

Please don't get me wrong - I don't mean to dwell on the negative. This is a great resource, and I would recommend it highly to anyone.