Cryptocurrency

Here’s an unformed thought for the day

What is the value of a cryptocurrency? If something like Ripple makes sense from an application perspective, but the blockchain is not as useful, does it adhere to the crypto manta of fat protocols and lean application layer? Not sure exactly what that means yet, but if the application is the selling point, it seems like blockchain is not the most well suited to the problem.

When we look at Bitcoin, the value of the blockchain is defined by its ability to record financial transactions, and rewarded in the verification, or Ethereum, where the value is the smart contracts and again rewarded in verification, the inherent the value of the coin is in the blockchain, the fat protocols that give life to the thin task layer above.

Does bitcoin, the currency, have financial value because of the Bitcoin blockchain? I am not quite sure. Where does the $2.5k+ price point come from? I sort of understand the opportunity of blockchain as a technology, but the value in the currency still alludes me.

Here’s another coin that makes some sense. Filecoin. This is a cryptocurrency that is paid to users who lend unused hard drive space. File transactions are stored in blockchain and contracts are paid out via a filecoin drop (how to upper and lower case coins differ? Bitcoin vs bitcoin?). With Filecoin is a tangible contract. A seller who has unused hard drive space in s server somewhere. A buyer who needs hard drives to store data. And a currency, filecoin, as a means for the transaction to take place. The Filecoin blockchain (I’m sticking with upper case for the blockchain itself, and lowercase for the coin, maybe that’s right), records all the transactions keeping a history of what went where (again, maybe this is just for Bitcoin). I kinda had it: http://filecoin.io/

What else is out there?

Steemit, Synereo, Akasha? I like the tag line of mining your mind. One could see this becoming the way of the future on the internet. Blockchain and cryptocurrencies solve the problem of advertisers. From the get go, there are blockchains set up to pay people for their creations. I’m still unsure this is the best use of the tech, but it is great to see a new way of funding artists, creators, and makers.

“Within each Bitcoin transaction is the ability to write a little program. For example, you can write a little program in a Bitcoin transaction that says “this transaction isn’t valid unless it’s June 15th, 2016 or later”. This is very powerful because you can move money automatically with computer code and everyone can see the rules by which that money moves and know those rules will be followed.” (From Ethereum is the Forefront of the Digital Economy)

More fascination

We needed to invent something completely different to get people to crowd fund projects. How do we have headlines like “the easiest way to monetize your open source work” that work in currency most people don’t even know about, but we cant’t do the same with fiat currency? It is similar to government efforts to fix hyperinflation. Where was it that changed the currency and tried to replace people’s perception of the money? I think I heard about it in a Planet Money podcast. Ah Brazil: How Fake Money Saved Brazil and How Four Drinking Buddies Saved Brazil (Podcast)

Replace URV with BTC and hyperinflation with spammy internet ads, and you nearly have the same story.

Fact check – URV or BTC?

Create a currency that doesn’t exist. No coins, no bills
URV (its called BitCOIN, duh)

He and three friends had been studying X since they were graduate students — four guys at the campus bar complaining to each other about how no one else knew how to fix this.  And now they were being told “Fine, do it your way.”

Find X: Brazilian Inflation or Spammy Internet Ads
Brazilian Inflation

Enough of that. People will catch on.

Lightening round

DAO sounds fun, but I don’t get it (and neither does coindesk)
(The DAO Just Raised 50 Million, But What is It?)

Only the dull mine Ethereum. Go create!
(An Idiots Guide to Building an Ethereum Mining Rig)

More questions

What do Ethereum miners verify on the blockchain? Completion of all the contracts? What is the Bitcoin verification process for that matter? I think i conflated cryptocurrency and blockchain, what is the distinction?

Getting tired. Taking a break for a few.

Next time on internet ramblings with Ryan: How to prepare a balanced meal of energy usage, water consumption, and animal ethics.

Edit

(this post didn’t publish correctly a few weeks ago)

Now this is happening: Bitcoin is forking to BTC and BCC. Coinbase is only supporting BTC. People are concerned. This seems like a stock split. Speculation abound.

(didn’t post again…)

Some analysis on the fork Bitcoin Exchange Had Too Many Bitcoins