Bitcoin Bits: 5 June, 2016

A roundup of interesting stuff from the week:

Bitcoin liftoff

The bitcoin news this week has been dominated by a price increase that caught most of us off guard.

via blockchain.info
via blockchain.info

I need to think about this a bit more, but it seems like very good news for the sector. And not just for bitcoin holders. For bitcoin businesses, also. The renewed attention doesn’t hurt, the validation as an investment opportunity will generate increased activity, and it’s been over a week since I last saw a “bitcoin is dead” article. Funny, that.

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Will Bitcoin’s Block Rewards Halving Bring Crisis or Consistency? – by Jacob Donnelly for CoinDesk

Another thing starting to get attention is the upcoming halving. Every 2160 blocks, the mining reward halved. This is designed to limit the supply of new bitcoin coming into the market, which is part of what gives bitcoin it’s value (“scarcity” – if you can mint as much as you want of something, it tends to have little to no value – unless it’s a picture of puppies or kittens, of course, but that’s a different discussion).

The last time the mining reward halved was in 2012. Back then, bitcoin’s price was $10, and the market was very illiquid. It was a very different scenario from what we have now. Which means that no-one knows what will happen when the reward drops. How will miners make up the fall in income? Will the price rise to offset? Or will they have to unload bitcoin holdings to raise funds, which will push the price down? We don’t know. It should be interesting.

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This is weird and silly and kinda fun (via Colossal):

Andante from Tangible Media Group on Vimeo.

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All the cool kids are doing Ethereum now – by Jon Evans for TechCrunch

An excellent article that compares Bitcoin to Ethereum, and warns us about the hype around the latter:

“I am genuinely excited about Ethereum in the medium to long term, and you should be too. But I also think we’re now at the peak of its first hype cycle, and important lessons need to be learned, hopefully the easy way, before it begins to achieve its revolutionary potential. There is a reason that “may you live in interesting times” is deemed a curse.”

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Making Sense of Blockchain Smart Contracts – by Josh Stark for CoinDesk

One of the best articles on smart contracts I’ve seen in quite a while. It runs through potential applications, while drawing a refreshing line between what would constitute a legal contract and what is actually just a function written in code. And it goes further than most by looking into the future and contemplating the new types of agreements this technology will allow:

“Many advocates for blockchain technology see larger possibilities. Rather than merely imitate or complement the legal contracts we use today, perhaps smart contract code could be used to facilitate new types of commercial arrangements.

We might even call this a third definition of the term: using smart contract code to create novel, alternative forms of agreements that are nonetheless commercially useful. Let’s call these “smart alternative contracts”.”

The word “contract” is probably not appropriate for many of these possibilities. But it seems that we’re stuck with it for now.

“The different uses of the term illustrate a broader challenge in our industry. The interdisciplinary nature of blockchain technology, and “smart contracts” in particular, lead people to see the technology as primarily belonging to their own discipline, at the expense of the others.

Lawyers often look at smart contracts and see marginally improved legal agreements, without appreciating the fuller potential of blockchain-code to extend beyond law’s reach.

Developers, on the other hand, consider smart contracts and see the limitless possibilities of software, without appreciating the subtleties and commercial realities reflected in traditional legal agreements.

As with any interdisciplinary field, both must learn from the other.”

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