A few things I’ve learned from following Bitcoin:
- The greatest uses for Bitcoin haven’t been developed yet. Value exchange is only the tip of the iceberg.
- Passwords are important. Security is a lifestyle. Brainwallets are insecure.1
- Wallets, services, and exchanges that elegantly hide (or offload responsibility of hiding) private keys last longer.2
- As Bitcoin marches on, changes to the protocol become harder and harder. 3
- At the end of the day, what’s important? It’s the usefulness, robustness, and flexibility of the protocol as a distributed ledger, not the exchange rate. The exchange rate is useful if you’re interested in the movement of fiat currency into and out of Bitcoin.
- Money is a human term. Math exists in spite of us. Money is a medium through which humans can exchange value. Bitcoin is the convergence of math and the human idea of a ‘medium of exchange.’ No matter your idea of what money is, what it is not, and what you wish it was, the rules underlying Bitcoin don’t care.
- The blockchain will continue as long as one miner keeps their computer on.
- Bitcoin is not like anything that has ever come before, so it is risky to make one-to-one comparisons with old technologies or historical trends.
Below is a video of Bitcoin being created:
- There’s hundreds of stories of people losing their Bitcoin to Brainwallets. Here’s a particularly sad one. ?
- The reason why services like Blockchain.info and Coinbase have not been compromised lies in the fact that it is difficult (or impossible, in the case of Coinbase) to expose private keys to wallets without the user explicitly asking for them over an https connection. Wallet seeds, ‘fragmented backups’ and 2 of 3 wallets are some of the ways that private keys are abstracted into human friendly formats.?
- In a recent talk, Andreas Antonopoulos brought up the fact that current network infrastructure engineers have been as of yet unable to switch the Internet from IPV4 to IPV6 even though everyone knows it’s necessary. There are far too many routers, devices, and systems that simply make the switch impossible. Similarly, the wallets, exchanges, and systems that use the Bitcoin protocol are becoming increasingly difficult to patch and upgrade in a timely fashion, and engineers working on the core development face huge hurdles getting their patches approved. ?