The Blockchain Without The Bitcoin

October 22, 2015 bulldozer00 Leave a comment

If you read the financial press, you’ll see a lot of mentions of “blockchain technology” without any mention of Bitcoin. That’s because your friendly banksta (you know, the one who: almost blew up the world in 2008, never went to jail, and was bailed out with your and my money) wants the blockchain without the Bitcoin.

Bitcoin is an existential threat to the banking mafioso, but blockchain technology without the Bitcoin can save the Bankstas tons of money by allowing them to fire lots of accounting employees. Of course, if the Bankstas succeed in incorporating blockchain technology into their operations, dollars-to-donuts says they won’t pass on the cost savings to you and me; they’ll just write bigger bonus checks to themselves and their myriad of vice-presidents. Trickle down economics never worked before, and it won’t work now.

Which system do you think is better for average Joe’s like you and me: one with a decentralized, publicly scrutable blockchain, or the Banksta’s alternative; a proprietary blockchain hidden behind a centralized “just trust me” coalition of fee-obsessed banks?

It’s A Governance Issue

October 10, 2015 bulldozer00 Leave a comment

The “blockchain” is the heart of the Bitcoin system. It’s a fully transparent, publicly visible, ledger of every transaction ever performed over the network. Approximately every 10 minutes, a new block of verified BTC transactions is added to the blockchain by a “miner“.

The figure below shows a simplified view of the BTC blockchain. As you can see, the system’s current design parameters only support a throughput rate of less than 10 Transactions Per Second (TPS).

If the usage of Bitcoin as a secure, decentralized, private, payment system continues to grow, the low TPS rate will become a bottleneck if the system doesn’t scale to accommodate the increased load on the network.

Two obviously simple ways for increasing the Bitcoin system throughput are to:

increase the maximum block size, S
decrease the block addition period, T

A major bone of contention in the Bitcoin community is how to scale the TPS rate to accommodate the anticipated growth in usage due to more and more people “discovering” the benefits of this peer-to-peer cash system over traditional banking systems of dubious credibility. This “block size” debate has been raging on for 2 years now. There are a range of proposals in play for solving the scaling problem; some are dirt simple and some are mind-boggling complex.

Resolving the dispute is exacerbated by the fact that, by design, there is no central authority controlling the system’s evolution. It’s a governance issue not dissimilar from growing a “flat” startup company into a hierarchical, “mature” organization. If a centralized authority with control over the evolution of the Bitcoin protocol is established, the doors will burst wide open for political intrigue and clever, special interest group agendas to infiltrate the currently egalitarian system.

Categories: bitcoin Tags: bitcoin, Blockchain

What’s In Your Wallet(s)?

October 4, 2015 bulldozer00 1 comment

My Bitcoin iPhone Wallets

Since I’m a nouveau BTC investor, I downloaded a bunch of free Bitcoin apps onto my iPhone:

Out of those nine apps, four of them are “on-device” wallets: bitWallet, BlockChain, bread, and Airbitz. Two of the apps, Coinbase and Xapo, allow me to connect to my online accounts at those two major, reputable, Bitcoin currency exchanges. The remaining three apps are for keeping up with the latest BTC news and Blockchain statistics/metrics.

Inter-Wallet Transactions

PC To iPhone

The following figure shows the home screen of my iPhone Blockchain wallet app at the time of this writing. To test out and evaluate the wallet’s feature set and UI, I sent approximately $13 USD worth of BTC from one of my PC wallets to my Blockchain app wallet. As you can see, the bottom transaction shows the reception of $13.27 USD worth of BTC at my Blockchain wallet’s public address (1Ni….vvC).

I executed this PC-to-iPhone, inter-wallet, transaction by:

Copying and pasting my Blockchain wallet receive address into an e-mail and sending the e-mail from my iPhone to my account.
Opening the e-mail on my PC and copying/pasting the address into one of my PC wallets (Bitcoin Core).
Initiating a “send BTC” transaction from my PC wallet back to my iPhone Blockchain wallet.

iPhone To Web

The top transaction on the Blockchain home screen shows that I subsequently sent $1.00 USD (with a 2 cent transaction fee to the miner who successfully added the block containing my transaction to the BTC blockchain) from my iPhone to another BTC wallet whose public receive address is 1H….kx1L. That destination wallet happened to be associated my account on the Coinbase.com web site.

I executed the iPhone-to-Web, inter-wallet, transaction by:

Copying and pasting my Coinbase.com wallet receive address into an e-mail on my PC and sending the e-mail to my account.
Opening the e-mail on my iPhone and copying/pasting the address into my iPhone Blockchain wallet.
Initiating a “send BTC” transaction from my iPhone wallet to my Coinbase.com wallet.

There is an alternative, perhaps even easier way to send/receive Bitcoins than copying/pasting long addresses to/from your device/PC clipboard. You can use a wallet-generated QR code in conjunction with your device camera.

The figure below shows the QR code graphic associated with one of the Bitcoin receive addresses (1A8…GDqT) on my iPhone Blockchain wallet. If you wanted to send some bitcoin to an address represented by a QR code, you’d:

Open up your wallet app (PC, iPhone, or web),
Instruct the app to scan the QR code of the destination address,
Enter the amount of BTC or USD you want to send,
Initiate the transaction.

You can try scanning the QR code below and sending me some bitcoin if you’d like 🙂

Citizen To Citizen, Phone To Phone

Assuming that the BTC economy doesn’t implode due to a black swan event and the “permission-less innovation” that the decentralized platform provided by the bitcoin protocol keeps the technology progressing forward, the user experience will only improve with time.

As long as smartphone prices keep decreasing and incompetent central governments keep consistently debasing their currencies (Argentina, Venezuela, Zimbabwe, Cyrus, Greece, etc), most of the world’s population might soon be executing inter-wallet BTC transactions for goods and services using a process similar to the experimental ones I described in this post – especially phone-to-phone transactions (no PC ownership or web access required).

Exchanging BTC for common goods and services may never take hold in advanced countries with stable currencies like the USA, but most of the globe may be ripe for the taking. What do you think?