A Useful Infographic

When we last wrote more extensively about Bitcoin (see Parabolic Coin – evidently, it has become a lot more “parabolic” since then), we said we would soon return to the subject of Bitcoin and monetary theory in these pages. This long planned article was delayed for a number of reasons, one of which was that we realized that Keith Weiner’s series on the topic would give us a good opportunity to address some of the objections to Bitcoin’s fitness as a medium of exchange voiced by critics (we have kept the final three parts of Keith’s discussion in abeyance as well, we intend to publish these concurrently).

 

BTC was easily the best investment asset of 2017 (we may have overlooked some other “alt coins”, but in terms of market cap only the 6 – 10 largest cryptocurrencies look like serious contenders in this market). We should probably write more often about it, then you would e.g. have learned that we thought BCH (the post-fork younger brother of BTC) was likely to play catch-up at some point. We actually believe this particular valuation gap is likely to narrow further, and the same may well happen with DASH, another cryptocurrency with quite similar features (both BCH and DASH are lacking some of the legacy technical drawbacks of BTC). As an aside, we always had a certain minimum target for the coming gold bubble in mind which we never mentioned in public, because we felt it sounded silly. Usually we just recommend that people use their imagination, in the hope that their imagination is big enough. By now it probably sounds a lot less silly –  we will revisit this topic once gold has overcome certain technical hurdles – click to enlarge.

 

As time has passed, more ideas have occurred to us, which should benefit the article when we finally manage to get it ready for posting. We have recently also received an inquiry by Brian Dowd of Focus Economics about our views on certain issues related to the cryptocurrency. In short, we will move ahead now, as it looks like an opportunity to kill several birds with one stone is here (someone should perhaps come up with a slightly less fatal-sounding variation of this saying).

In the meantime, a comprehensive infographic on Bitcoin and its brief but intense history was put together and sent to us by Josh Wardini, community manager at webmastersjury.org. It contains all sorts of information, mainly a number of quite interesting trivia. Some of these milestones are probably fairly well-known, but we certainly weren’t aware of all of them. We think this information underpins something we said quite some time ago already: Bitcoin is here to stay. We decided to republish the infographic here to set the scene for our upcoming discussions of Bitcoin and related subjects.

 

This infographic was originally published at bitcoinplay.net. It is quite interesting which countries have declared bitcoin illegal – the Saudi theocracy (they probably thought it looked too much like fun), two democratic Latin American countries currently ruled by far left-leaning governments, one central Asian country that recently held what is widely deemed the first truly competitive election in the entire region (some people say Kyrgyzstan has been going downhill since defeating the Uyghur Khaganate in 840 AD, but the country’s history since gaining independence from the Soviet Union is actually quite remarkable. In no other central Asian country were so many would-be megalomaniac dictators chased from office with comparable alacrity). Lastly there is Bangladesh, the first region of the Indian sub-continent conquered by the British East India company in 1757 (the company ruled over the territory for more than a century; in 1862 it became a British crown colony). Today Bangladesh is one of the few predominantly Muslim countries the government of which is regularly headed by a woman (incumbent prime minister Sheikh Hasina and her main competitor Khalida Zia are essentially taking turns in the role). We have no idea what these countries have against bitcoin, in fact, it is a rather odd and diverse collection. Of course such bans are essentially meaningless – we would guess their effectiveness is equivalent to Australia’s ban of online poker. To see what we mean watch Australian Senator David Leyonhjelm (an opponent of the ban) dispense advice to his constituents on how to best handle the situation: “Screw the government; get yourself a VPN and an offshore account and just keep playing”).

 

A Bengal cold coin (about 670 AD) from the reign of King Rajabhata of the Khadga dynasty

 

Chart by: cryptowatch

 

 

 

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Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

11 Responses to “Bitcoin Facts”

  • Hans:

    Is this not a danger? “chinese mining pools control 81% of network collective hash rate.”

    • RagnarD:

      Exactly. In Tulipomania, at least from the distance of centuries there seems to be just one dimension to the mania. In BTC-omania we can see so many dimensions. I guess we just look back at the tulip thing and think, “That was stupid.” Which is of course what future folks will think of BTC-omania. It’s just when you’re living through it the sheer number of logical / rational / due diligence oversights is just astounding.

      And yet I literally don’t know anyone who owns any BTC. And yet I’ve only met 1 or two people who own physical gold. And I work on an energy commdoties trading floor.

      Considering that, how much farther do both of these have to run? Back in 2000, working on a different energy commodities trading floor, I knew lots of folks riding the dot.com bubble, both at work and in my personal life.

    • jks:

      @ Hans “Is this not a danger?…”

      Yes. Mining has moved out of the homes and into large data centers which means centralization of an important aspect of bitcoin’s security. Furthermore, the mining is concentrated in regions where electricity is cheap. The mining is fairly decentralized within China at the moment but greater adoption = greater centralization = greater vulnerability since bitcoin’s security depends on decentralization. Some coins, such as Litecoin, use ASIC-resistant cryptography in an effort to decentralize mining but there is ASIC mining equipment for Litecoin now. Other coins, such as Iota and Byteball don’t use a blockchain, need no miners, and have no 51% vulnerability. The crypto space is very new and there are some very innovative coins that address bitcoin’s weaknesses.

  • jks:

    Bitcoin’s blockchain is pseudonymous. It’s not easy to trace transactions because public addresses are tossed and new ones issued by the wallet after every transaction. If it were easy to trace transactions, they would have caught the guy(s) that looted Mt. Gox of 850000 bitcoins. If you buy your bitcoins through an exchange, you have to reveal who you are. If you earn, mine, or buy outside of an exchange you can retain your anonymity. You can also buy privacy coins like Monero or Zcash then swap for BTC.

    Gold has similar problems with anonymity. Coin dealers don’t accept cash–only money that leaves a paper trail. Sell to a dealer and a report is generated to the IRS.

    • RagnarD:

      One of the inherent problems with any valuable purchase be it gold, stamps, art, etc. is that the seller probably keeps a record of some sort. Now the govt may the “bad guy” who uses this against the buyer, but it could also be criminals who either steal or buy the customer / transaction information from the dealer.

    • zerobs:

      What happens when the IRS demands a report for every > 1 BTC transaction?

  • RagnarD:

    While I’d agree that some of the items in the infographic fortell BTC is “here to stay” (namely: acceptance rates), others, IMO, foretell the opposite.
    Namely:
    Hard drive damage = lost bitcoins
    Non recoverability in bogus transactions
    4,000 to 1 energy deficiency vs traditional credit card transactions.
    The fact that there is increasing credible competition to BTC itself.
    The volatility.
    The lopsided ownership rate.

    That said, considering your comment on the ultimate price of gold, I assume the tenor on your “here to stay” is not equal to your tenor for gold. :)

    • jks:

      “Hard drive damage = lost bitcoins”

      Only if you’re extremely careless. Your wallet doesn’t hold bitcoins. It holds keys. Backups are easy and there’s no excuse for not having several backups stored in a safe place.

    • zerobs:

      The 4000-to-1 energy deficiency will only get larger for BTC as time goes on. Eventually that will worsen its acceptance rate. Also, it probably won’t have much effect on the lopsided ownership rate.

  • vfor:

    I have left this discussion behind regarding whether or not Bitcoin is money or not. It isn’t.

    Money you hold in absolutely serene knowledge it will hold its value over time. 5000 years is a good proof for gold. Bitcoins on the other hand act more like shares in some virtual entity of undefined form in an extremely competitive market. If something better shows up it sure will fly given all of Bitcoins deficiencies like expensive transactions, slow throughput.

    Money has no memory and stores no history about how it came to you. Bitcoin on the other hand stores it all. Given advanced Bitcoin forensics techniques; what might happen to you if (when) the government or other evil comes after you? This might happen for no other reason than your holding of Bitcoins.

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