Sign up FAST! Login

What Is Bitcoin - Robert McNally of Hackers

Stashed in: Hackers!, Money!, Bitcoin

To save this post, select a stash from drop-down menu or type in a new one:

Last week, columnist Paul Ford opined they could now be the world's last currency safe haven.

But many readers at this point are probably wondering...what exactly is Bitcoin?

Robert McNally, an iOS developer at parking payment startup QuickPay, presented the following presentation  to last year's Hacker's Conference (don't worry, they were the "good" kind of hackers) in Santa Cruz answering exactly that question. 

With his kind permission, he's allowed us to republish it.

The 10.9 million Bitcoins in circulation are now collectively worth $1 billion:

Kind of amazing that $1 billion in currency could be created out of thin air.

No one knows who created Bitcoin.

Today, Maria Bustillos writes on the New Yorkers' new tech page, "Elements," that it's  widely agreed Bitcoin emanated from an individual calling himself Satoshi Nakamoto.

Until his disappearance from the Web, around the spring of 2012, Nakamoto was a visible participant on cryptography forums, where he discussed Bitcoin freely, and published a nine-page paper outlining the details of the project. These posts reveal that even in 2008, Nakamoto was able to respond to concerns regarding the scalability of bitcoin with remarkable prescience; he clearly understood the ramp-up of computing power that would be required for producing bitcoins as the system grew.

But there's near universal consensus that "Satoshi Nakamoto" doesn't exist. Instead, a worldwide guessing game has sprung up over who's behind the Nakamoto handle.  

Read more:

Quantitative Analysis of the Full Bitcoin Transaction Graph  - Wizard Level

Wow. Impressively speculative.

By the way, the Robert McNally slide deck you posted above is really quite excellent. Thank you.

It's hard for any rational human to look at this chart, and not conclude that Bitcoin is on an utterly parabolic rise, fueled by greed, speculation, and fascination, while being completely divorced from any "fundamentals."


We have no idea when the music will stop (it could go to $500 or $1000!) but at some point there will be a moment when it ends in tears, and people will wonder why they paid 40% more for something than what it was selling at the day before.

Here's what's really fascinating and unique about the Bitcoin boom.

This isn't the first time we've seen a bubble in something in a privately created thing that's off traditional financial markets.

For example, in the early 2000s, there was a legitimate bubble in the stuffed animals called Beanie Babies. It's not clear why suddenly people started paying through the nose through them, and why whole industries were created around them, but it happened, and then they died.

In the 90s there was something of a baseball card bubble.

Bitcoin is somewhere in the middle: A privately created financial instrument.

But what sets Bitcoin apart is the real-time data on it.

You can go here and watch Bitcoin trade tick-by-tick, which is not something you could ever do with these other unconventional micro-bubbles.

Read more:

Wild ride. 145 to 117... Like that!

PRICE PLUNGE: Bitcoin Falls Below $117 - Business Insider

Doesn't it make you wonder if all the air suddenly will go "poof!" out of this amazing souffle?  Or rather, when?

It does make me wonder. I think this party is just getting started -- much entertainment remains.

What will be the peak Bitcoin price?

That's anyone's guess: