I’ve been watching Freedom’s Phoenix – Declare Your Independence with Ernest Hancock show ever since we met at the NYC Inside Bitcoin Conference. There have been very good guests coming on this show introducing new technology in the space and having great in-depth discussions. If you watch the shows you will hear Ernie expressing several concerns in the overall Bitcoin Space and very excited about some of the new companies that are coming into the space with complimentary or improved services. The commentary below each video link will attempt to show a different perspective on the ideas to ease some concerns and put a slight break on some of the excitement.
04-25-14 Hour 3+ BONUS Sean Daley
Sean Daley (CEO of SilentVault.com)
The main idea of SilentVault sounds like something very beneficial but there will always be an issue of trust. Mt. Gox also had “Cold Storage” or at least they claimed they did, so between those perceptions and so many other new companies being hacked once it’s known there is a large concentration of bitcoins in one place, they might have a big hill to climb. To this day what kept some of us in the Bitcoin community stress free (relatively speaking considering the volatility) is that we were smart enough NOT to hand over the private keys, so why should we start now?
The question that keeps coming up is can the government take control of Bitcoin? Theoretically YES, but only when you think of the government as a well oiled machine and not a dysfunctional mess. Let’s take the simplest view of Bitcoin and look at its 3 top qualities. Most people know that Bitcoin is way more than a ‘currency’ but we’ll just look at that angle here.
1. Limited Quantity (21 Million will ever be mined)
2. Semi-Anonymous (or as anonymous as you’re willing to make it)
3. Frictionless (cheaper, faster, safer)
In order for the Government to take control they would at the least need to take all these over at once. This is not as easy as theory would suggest because they are completely separate parts. To change the quantity would require the Bitcoin Foundation, to remove the ‘Semi’-Anonymity would require all Wallet services to do KYC, which right now only applies to Exchanges, but as services like DarkWallet begin to come out it crates the opposite extreme once again balancing the equation. To interfere with Friction, they would need to get control of the miners and put in more transaction costs like the IRS rules which most users will ignore.
On top of all this there are over 100 other currencies that can take the torch from Bitcoin. The concept is more important than the price so the strongest should survive. If the Government really wants Bitcoin, let them have it, how great would it be to have Government on the BlockChain. Any one of these point implemented as is would be a huge improvement of how the Government currently spends money (assuming their wallets are not DarkWallets). while the people will have a chance to switch the moment one of these 3 gets significantly compromised.
04-28-14 David Irvine +Bonus (HR 1 & 2) & Dan Larimer +Bonus (HR 3)
David Irvine (CEO and Founder of MaidSafe.Net) provides an update on SafeCoin.io and MaidSafe Launch
This was a follow up show with David Irvine as he was on the show before the MadeSafe Launch: 04-14-14. The MaidSafe software is planed to be released soon and will allow people to lease out the space on their computer through a distributed storage network. I did not get a chance to buy into SafeCoin, which I was considering but they were all sold out within 5 hours. The big question is whether that happening was a good thing. It seems like the answer would be yes but you have to wonder… if the plan was to raise the money over 30 days, how did they underestimated the demand by so much?
The best explanation I was able to find was by Adam B. Lavine form Let’s Talk Bitcoin. His article MaidSafe: A Wildly Successful Crypto-Crowdsale Debacle gave a different perspective on the process. Here are some selected sections.
“many who did not get to purchase feel like they’ve missed out on a promised opportunity to the benefit of a few.”
“When it comes to fundraising with a new token, there are three primary areas of concern
Quantity (number of tokens)
Value (price per token)
Duration (length of Crowdsale)
The market is a wild force and while you have some controls, it is not possible or even desirable to lock down every variable.”
“MAIDSAFE fixed two of these parameters; Quantity (429,496,729) and Value (.00005822BTC or .00002941MSC each). They gave guidelines for the duration of the Crowdsale (4 weeks). Because both Quantity and Value were fixed and more value came in than was expected, it quickly blew through the quantity and eliminated the duration.”
“Setting the number of tokens is not necessary, but is fine – Setting the price INSTEAD of the duration is absolutely catastrophic for community involvement. The truth is we simply do not know what a fair price for a MaidSafeCoin is.”
“…there seemed to be concern about not raising the desired funds and an incentive structure was laid out that really, really incentivized people to jump in, but made the crowdsale much less profitable than it otherwise should have been.”
The “Much Less Profitable” statement referees to the fact that MadeSafe set the price of MasterCoin (MSC) at about 2x its current conversion rate relative to bitcoins. This created an arbitrage opportunity to those who realized it early and bought up MSC in advance in order to get the best deal on SafeCoins hence MadeSafe ended up with a much larger MSC holding than expected. Once the crowdsale ended the price of MSC had dropped to a point lower than before this arbitrage process began and MadeSafe would have seen at least a 25% loss in their funding immediately after their 5 hr crowdsale was over.
Dan Larimer (CEO and Founder of BitShares)
It’s great that Dan Larimer is designing solutions that can improve the decentralized network. They will be one of the reasons why it would not be cost efficient for Governments to try and control Bitcoin. Ernie, however, was absolutely right when emphasizing the fact that Bitshares needs to do a better job explaining their product and relation to Bitcoin. I will pick on a few points that I would really like to see the free market decide.
Larimer: “If the miners decide they are going to start freezing accounts because the government told them to do so, they can, and that’s actually the biggest threat in the Bitcoin ecosystem.” (23:00)
Tone: This may seem like a big concern in theory, but in practice the miners would be committing financial suicide, which Satoshi mentioned in his white paper. The miners are keeping themselves in check to stay away from a 51% attack. (official statement here) You can argue that government and its infinite printing press can start buying all the hashing power in an attempt to control the BlockChain, but this is where the beauty of the free market comes to play: Smart people will see this power grab and migrate to the next best Crypto-Coin and the Government will be one step closer to default.
Larimer: “Bitcoin is ONLY sustainable by a Government, it’s not actually sustainable by the Free Market in the long run.” (32:40)
Tone: We will have to wait and see. If Bitshares is the solution, than the free market will decide, but right now the free market seems to be working, no one is forcing miners to work and they can exit the system any time.
04-16-14 Jonathan Mohan 3+ Hours of Bitcoin Behind the Curtain
Jonathan Mohan (Founder of Bitcoin NYC and correspondent for Let’s Talk Bitcoin)
This was a great interview covering many topics. Ernie brought up a very important point. If Ethereum developers think they are safe because their servers are in Switzerland, they might have a hard time getting people to adopt their platform.
…More coming soon
04-15-14 David Johnson Hr 1
David Johnson (Co-Founder of BitAngels.Co)
………..coming soon.