Streams

All About Bitcoin

Wednesday, October 26, 2011

Gavin Andersen, lead developer of Bitcoin, an experimental digital currency launched in 2009, and Dennis England, who owns Sugar Wedding Cakes and accepts Bitcoin, discuss how it works, the history of digital currencies, and how it compares to traditional currencies.

Guests:

Gavin Andersen and Dennis England
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Comments [17]

John A.

Linda from {wanna-be-secret},
Browsing history via cookies? If you visited their site (as I did yesterday) it would be Possible. The trick as I recall is that advertisers on a page can get your IP address and over time, compile and link that to other facts that you drop in other places where they also advertise.
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I think in your case that Twitter may gave given your ID to bitcoin after your doing a query. Its how companies in twitters class (like FaceBook) make money.

Oct. 27 2011 10:49 AM
Linda from Brielle NJ

I commented on this show yesterday. this morning I checked my company's Twitter account (I own the company, my name is not in the title), and surprise surprise (in gomer pyle voice) GUESS who is following my company on Twitter?? BITCOIN!!
how is this possible? better metrics? read my URL? how? what? BTW, my company is not in the same town as my "location"

Oct. 27 2011 10:06 AM
wareen

21 million was chosen somewhat arbitrarily, but apart from possible psychological implications, it does not matter much if it was any other amount.
Bitcoins are currently divisible to 8 decimal places, so it is perfectly possible to deal with small fractions of 1 Bitcoin should it ever become necessary.

Oct. 26 2011 08:17 PM
David

Why a total maximum of 21 million? Why that particular amount?

Oct. 26 2011 08:06 PM
wareen

The name is Gavin Andresen - not Andersen. Apart from that, nice interview!

@Marvin: the thing making Bitcoin trustworthy is basic math, open for anybody to inspect and understand. Something that cannot be said about the Fed. It is democratic in the sense, that the whole network operates on consensus between a majority of the participants.

@ph: the total amount of Bitcoins cannot be inflated, regardless of the computing power you put into it - the production rate adapts to ensure a predetermined fixed supply rate up to the total maximum of 21 million BTC.

@David: Since Bitcoin is open source, it would be easy to start a clone with a different money generation rate and set up an exchange to freely trade between those systems. The exchange rate would reflect on the respective valuation of those systems by the market. Therefore what you suggest is perfectly possible with Bitcoin.

Oct. 26 2011 07:38 PM
David

300–400? Why not 200–300? Or 400–500? Only a free market can determine how much money is needed at any one time. Anything else is artificial intervention. Bitcoin is just as bogus as the current fiat currency we are currently forced to use. It too is money created out of thin air.

Oct. 26 2011 05:03 PM
Lance W

ph, Bitcoin manages the inflation rate by regularly adjusting the mining difficulty based on the total computing power on the network. Mining has been producing a fairly steady 300-400 coins every hour for most of this year.

Oct. 26 2011 04:08 PM
David

The marketplace had, for centuries, a currency that wasn't controlled by a central bank. It was called gold (and silver). Unfortunately, first the kings took it over, then central private banks, and then the private banks replaced these two real commodities with cheap, paper money. And they have the monopoly of being able to print it up. They've printed so much of it up in the last century that the original U.S. dollar from $1.00 is now worth about a nickel.

Here's a terrific short book which explains what makes a quality medium of exchange.

http://mises.org/books/whathasgovernmentdone.pdf

Someday, I hope Leonard has on a guest who can explain exactly what the virtues of a gold standard and 100% gold-backed currency are—especially for the future prosperity of the people who are NOT in the 1%.

Oct. 26 2011 02:33 PM
John A.

I can't describe the sense of dread that hearing* of this system gives me.
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*for the first time here, THX Leonard.

Oct. 26 2011 02:00 PM
Marvin Ciporen from Brooklyn

I'm surprised you did this segment. The idea that a currency created by some anonymous nerd is more democratic and trustworthy than currencies of countries like the U.S. is an absurd and dangerous concept.
Marvin

Oct. 26 2011 01:34 PM
doudou from Jersey City

Thanks for doing this show! I forgot all about bit coins. I'll take them, just look me up on Etsy doudoudesign :) enter other at checkout and I'll invoice you

Oct. 26 2011 01:28 PM
ph

With faster computers and the use of massive GPUs, can't you make more bitcoins for yourself and thereby reducing the value of everyone's bitcoins. So bitcoins don't solve the inflation problem at all. I'm not sure what issue bitcoin really solves except to meet some group's ideology that currency should be decentralized. And when we run out of power in 75 years, your bitcoins will unusable.

Oct. 26 2011 01:23 PM
Larry from LES

Is this legal? It seems unconstitutional.

Oct. 26 2011 01:21 PM
David

Given that bitcoins trade like commodities, are the gains taxable if you buy a bitcoin at $2 and sell at $10?

Oct. 26 2011 01:21 PM
john from office

Since only the feds can print money, is this legal??

Oct. 26 2011 01:20 PM
John A.

OK, say something to prove that this isn't just Financial Engineering all over again.

Oct. 26 2011 01:19 PM
Linda from Brielle NJ

interesting article about Bitcoins in the New Yorker "the Crypto Currency"
http://www.newyorker.com/reporting/2011/10/10/111010fa_fact_davis
i wouldn't buy into it.
read the article

Oct. 26 2011 01:17 PM

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