Bitcoin Bits: 15 April, 2016

Some of the more interesting articles on bitcoin and the blockchain from the past few days:

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How a Cashless Society Could Embolden Big Brother – by Sarah Jeong, for The Atlantic

A look at the potential censorship of a cashless society…

“Information is lightning-quick. It crosses cities, states, and national borders in the twinkle of an eye. It passes through many kinds of devices, flowing from phone to phone, and computer to computer, rather than being sealed away in those silent marble temples we used to call banks. Information never jangles uncomfortably in your pocket

But wherever information gathers and flows, two predators follow closely behind it: censorship and surveillance. The case of digital money is no exception. Where money becomes a series of signals, it can be censored; where money becomes information, it will inform on you.”

…and how bitcoin can help.

“A cashless society promises a world of limitation, control, and surveillance—all of which the poorest Americans already have in abundance, of course. For the most vulnerable, the cashless society offers nothing substantively new, it only extends the reach of the existing paternal bureaucratic state.

The poor may be disparately impacted, but the cashless society affects everyone. And so relatively privileged technolibertarians have long feared the cashless society, seeing it as an electronic Panopticon, one of a host of privacy erosions introduced by the digital age. This fear has motivated a number of innovations, from David Chaum’s ecash… to the much-hyped Bitcoin protocol.”

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by Karl Fredrickson for Unsplash
by Karl Fredrickson for Unsplash

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Reading the tea leaves – by Tim Swanson, for Great Wall of Numbers

This article is practically bursting with useful data and cool visualizations.

Not only is there very little public data to go on when tracking movements in the bitcoin world, but there is less data available now than a year ago. However, through sifting, understanding and sheer doggedness, Tim has managed to extract some interesting observations:

  • Coloured coin use is on the rise
  • The rate of ATM installations has increased to 0.8 a day, and is on track to give annual growth of 12%.
  • Ethereum has almost 10 times as many meetups globally as Counterparty.
  • The fact that there are not a lot of numbers out there is interesting (and frustrating).

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How Close Are Smart Contracts to Impacting Real-World Law? – by Josh Stark for Coindesk

An excellent overview of smart contracts and their potential impact. Smart contracts are closer than we expect.

“Representing contractual terms in code, rather than natural language, could bring clarity and predictability to agreements. A smart contract could be tested against any set of inputs – in other words, against any set of material facts which it takes as inputs – allowing lawyers on either side of a deal to know precisely how the contract would execute in every computationally-possible outcome… Analogous to how software developers “debug” their own code by testing it in every possible circumstance, lawyers could test contracts, giving each side of a deal a clearer understanding of their risk – and perhaps requiring fewer billable hours.”

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Cash, fear and uncertainty: The Holy Trinity of Bitcoin and blockchain – by Matt Reynolds, for The Register

Why most blockchain developments these days are aimed at the banking sector: fear.

“To a bank, Bitcoin is a tremendously scary thing. Most of what a bank does is designed to keep them sitting in the middle, adding some value, and taking a cut for providing that value. A considerable amount of the value they provide comes from helping people store and move money around.”

Bitcoin and the blockchain can provide that service faster and cheaper. Is this the “disruption” the banks have been scared of?

“The hype around blockchain comes from the fact that it looks to disintermediate banks. Fundamentally, a non-fiat currency that behaves like cash – whether that’s Bitcoin or something else – is terrifying to a bank. So they’re investing in understanding the risk. And we listen, because when banks invest, it attracts attention because it tweaks our nerves around fear or around greed.

Although the hype starts with money, the question is “will the hype sustain”? In a post-Edward-Snowden world, “trust” is a complex idea. If we centralise trust, it’s possible for certain types of actors to try and exploit the centralised nature of this system.”

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