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Author Topic: Bitcoins from the fire  (Read 305 times)

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Offline bitcoinforum.comTopic starter Bitcoins from the fire
« on: March 24, 2013, 10:13:11 PM »
Bitcoins from the fire
(by Alex Delmar)

Roughly half a million years ago or more, a group of human beings somewhere learned how to use fire to their advantage. The idea appears to have caught on.

Around 10,000 years ago, other groups of human beings somewhere, perhaps in what is now Turkey, learned how to use fire to separate metals from ore. The idea also appears to have caught on.

Coins made from the metal smelted with fire first appeared three to four thousand years ago. Silver, gold, electrum, iron, copper were all made into coins by people that had the knowledge and tools to make them. The idea appears to have caught on so well that anyone that could make coins did so for centuries.

Sometime in the past millenium, people learned how to regulate the volume and velocity of the coins made from the metal smelted with fire. This is called fractional reserve banking. The idea caught on so well that hardly anyone wants to think about it anymore.

In the previous 50 years, using the metal smelted with fire, people have created integrated circuits. Because of that idea, you’re reading this nonsense right now. Going out on a limb here, but it seems the idea of integrated circuits has taken hold.

On 9 January 2009, a message was attached to the first tranmission across a network using the integrated circuits made with the metal smelted with fire. The message subtly states an issue with the idea of fractional reserve banking:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

Some ideas, like fire, coins and integrated circuits, are both universal and useful. Other ideas, such as fractional reserve banking, are more useful to only a small percentage of people than to the larger percentage. Burdensome ideas are meant to be and will be replaced when the tools exist to replace them.

This network, the Bitcoin network, is going to be around for as long as the internet is. Like the coins made with the metal smelted by fire, Bitcoin is an idea that springs from the materials at hand, materials that served a use before they became currency and commodity. Just as fire and metal served uses before they were combined to make coins, so cryptographic hashes and peer-to-peer computer networks have been combined to make every bitcoin that will ever exist and will exist for as long as TCP/IP packets are moving through the wires.

There’s no regulating authority anywhere on Earth that can stop people from using fire or that can turn off the entire internet. If you have a hunch that you’ll be able to get online next year, your bitcoins will work. There’s a good chance they’ll be worth around the same price or a maybe even more than they are now. But caveat emptor, as always.

It remains to be seen if our fractional reserve notes and their caveats are performing equally as well. Bad ideas don’t do well in the long run. Good ideas stay around forever, in some form or another.

Offline bitcoinforum.comTopic starter

Re: Bitcoins from the fire
« Reply #1 on: March 24, 2013, 10:17:42 PM »
I loved this article.


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