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Be your own bank: A Bitcoin Cash “wallet” on a smartphone (©BitcoinXio)

In 1976, the Institute of Economic Affairs published a paper by the Nobel Laureate economist Friedrich Hayek in which he advocated the “denationalisation of currencies”. Hayek argued that there should be private currencies in competition with government-backed currencies, or more simply: beware government. He was very light on the details of how these private currencies would work (but, come on, he was an economist) and no one paid much attention.

In 1990 David Chaum created DigiCash, an admired virtual currency company. The company went bust. In 1997 Nick Szabo, a cypherpunk, created “bit gold”, a mechanism for a virtual currency. No one paid much attention.

In October 2008, a “white paper” was published by one Satoshi Nakamoto, largely in response to the financial crisis, calling for a decentralised peer-to-peer digital currency, using blockchain technology as a public ledger, instead of a “trusted third party”. Nakamoto named this electronic cash Bitcoin and the first bitcoin was mined on January 3, 2009, something anyone with a bit of tech savvy could have done on their home computer.

There’s never been anything like bitcoin before. Nearly ten years after the genesis block, bitcoin is everywhere, from the big financial institutions like Goldman Sachs to popular culture. Furiously denounced as a con or a bubble, repeatedly pronounced dead by magnates and big bankers, it’s still there. That’s its greatest achievement, its most remarkable feature — that it’s alive, a rugged survivor, the honey-badger of currency as its supporters like to term it.

Originally nothing more than a nerd gewgaw on a few dozen computers, bitcoin is a fascinating hybrid: part cult, part asset, part business enterprise, part currency, part fad. It appeals to the best and worst of human nature, and that’s why from basket-cases like Venezuela and Zimbabwe to Wall Street it’ll be around for some time to come.

There have been a number of zealots who have earned the epithet Bitcoin Jesus — Andreas Antonopoulos for one, whose book Mastering Bitcoin is the standard work on the technical side of bitcoin. Now we have a contender for Bitcoin St Paul in Saifedean Ammous with his book The Bitcoin Standard, in which he argues that it is not the love of money that is the root of all evil but government and central bank fiddling with money and that bitcoin can serve as a new gold standard.

Whoever the publicity-shy Satoshi Nakamoto was (or is), the original intention was for bitcoin to be a coin — a peer-to-peer cryptocurrency that you could buy coffee with at Starbucks and support with your home computer. That, as Ammous points out, is all over: your credit card or paper money can do small transactions much better and faster than Bitcoin can or ever will, and unless you own a computer factory you now have no hope of mining bitcoin.
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June 7th, 2018
8:06 AM
A call for another tulip mania?

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