Like everyone’s mom and dog and roomba, I’ve lately been fascinated by, maybe even obsessed with bitcoin. I took the plunge and purchased some btc several months ago, too late to hop aboard the meteoric-price-rise-express, but I’ve got a long view on digital currency(ies) and am simply excited to be part of the action.
Amidst all the garbage bitcoin content now published (107 Kindle ebooks!), this Dan Kaminsky post stood out for its remarkable overlay of simple explanations, complex concepts, and a clear point-of-view. He’s a noted expert in computer security and I only understand 1 out of 3 of his blog posts but they always teach me something very new and change my perspective on things.
Here are my notes from both decks:
- Bitcoin is “an overlay network on the Internet that people think has certain properties”
- It’s really 2 systems put together: a peer-to-peer network that synchronizes data (transactions and solved blocks) across nodes and a “Chinese lottery” that canonicalizes subsets of synchronized data (don’t know what this means)
- Solving a bitcoin problem takes the world 10 minutes, and earns you 50 btc
- The main flaws: it doesn’t scale, and it ISN’T (capital I, S, N, T) anonymous (although none of this is a surprise, it’s all declared upfront)
- Bitcoin developer Gavin Andersen: “bitcoin transactions are more private than credit card or bank transactions, but less private than cash transactions”
- While peer-to-peer today, it will eventually switch to a centralized model run by supernodes
- Supernodes (the new “banks”) won’t be able to create or forcibly take btc, but can refuse to accept and/or reverse “undesirable” transactions
- Bitcoin security model depends on nobody controlling >50% of the network, but one pool already has 41%
- “The full worldwide transaction history is stored and shared, forever and ever”
- These transactions can be linked to you (through a combination of transaction history, names, IP address, and I’m guessing other variables) unless you’re very, very careful
PS. Here’s a full list of what I’m reading and highlighting, thanks to Evernote and Postach.io