bitcoin

TE16: Digital Currencies & Bitcoin – Full Discussion

Bob Van Valzah joined me for two calls that became a seven-part series on Digital Currencies & Bitcoin. To the left is Bob’s initial mining rig from 2010. To make it easier for folks we’ve merged all seven episodes together into this one large episode. Please note on several occasions throughout the podcast you’ll hear a brief snippet of music, this is an artifact of these originally being edited into episodes, sorry in advance for this audio nuisance. This podcast covers a considerable amount of material in just under two hours, but if you get through it you’ll have plenty to talk intelligently about Bitcoin and blockchains with your friends and coworkers.

Here are the details of what was discussed:

  • How did you get into bitcoin mining?
  • What is a Blockchain?
  • How is a Blockchain structured?
  • Where are Blockchains stored?
  • What is the role of a node?
  • Are all nodes miners?
  • Is a miner a person or a computer?
  • What is a mining rig?
  • So what are miners actually doing?
  • The enormous numbers, for example, the 10^18 power behind solving these mining problems.
  • Are we looking for primes in a huge field of numbers (hint, no)? Solutions have 130 zeros at the end or 2^130
  • Mining rigs as space heaters, the power issue.
  • Who decides which miner is a winner in extending the blockchain?
  • What happens when two miners each find a valid solution during the time of the flood?
  • Is it still one bitcoin block every 10 minutes?
  • What happens if it takes longer than 10 minutes to arrive at a solution?
  • What keeps the bad guys from circumventing the whole mining system?
  • How often would you win a bitcoin, and what is a mining pool?
  • How is a Blockchain different from a standard bank ledger?
  • Banking is about trust, how is a Blockchain more trustworthy than distributed bank ledger?
  • Is the Bitcoin market cap really $65B?
  • How are transactions in the Blockchain signed?
  • Can you briefly describe public key cryptography?
  • How does the Blockchain system know that my cryptographic signature is valid?
  • Who is Satoshi Nakamoto? Is he one guy or a group?
  • So now that we understand Blockchains where do we go from here, cryptocurrencies, smart contracts, etc…?
  • A quick review of Blockchain technology.
  • What is a fiat currency?
  • How do cryptocurrencies differ from traditional currencies?
  • Money as a store of value.
  • Commodity money, where a currency is backed by, and can be traded for precious metal.
  • How fiat money derives its value.
  • How governments manipulate the money supply to meet their own needs.
  • We discussed the failings of the paper-based fiat currencies.
  • How credit cards overcome some of these issues.
  • The advantages of cryptocurrencies over paper-based fiat currencies.
  • Physical Bitcoins produced as a stunt, and the issues with them.
  • Using Bitcoin as a way to move money easily across borders.
  • Advantages of bitcoin mining rate, as a counter to inflation and currency manipulation.
  • Four-year correction in Bitcoin production, with rate halving, 16M today with 21M by 2040.
  • How Bitcoins are divisible into 100M pieces, called Satoshis.
  • Why is the price of Bitcoin so volatile?
  • What can drive the price of Bitcoin down?
  • Betting on Bitcoin via exchanges and futures.
  • How do I accept Bitcoin, and what is a wallet, and how does it work?
  • What is a hardware wallet, and a cold wallet?
  • How do miners actually make money?
  • What are transaction fees?
  • Should I drop a grand on a mining rig and get started?
  • Should I invest in Bitcoin? What is a binary investment option?
  • Can Bitcoin be lost or destroyed?
  • How is this different from fiat currencies?
  • Can Bitcoins be counterfeited?
  • You can create your own currency, ScottCoins anyone?
  • Are Bitcoins safe to use?
  • Discussed malware & Showtime hack which put miners on victim’s system?
  • Ransomware and the use of Bitcoin as the vehicle for payment?
  • The perception of Bitcoin as negative as a result of criminal use.
  • Should I keep my Bitcoin in my wallet or in an exchange wallet?
  • What are the legal issues around Bitcoin, and can anyone use it?
  • Discussed other currencies, ToysRUS JefferyDollars, frequent flyer miles, etc…
  • How about other countries, for example, Kenya, which used cell carriers as banks.
  • Are countries like the US trying to regulate Bitcoin? At the edges when Bitcoin is turned back into fiat currencies that’s where countries are getting involved, for example reporting.
  • Why are criminals using Bitcoin? It’s a great way to move money across borders, also it affords users anonymity, but it’s no different than using US dollars.
  • Any anonymous form of cash can be used towards bad ends, it’s not limited to Bitcoin.
  • Discussed handing over a bitcoin wallet to pay for something.
  • Banks, and suspicious activity reporting, limit of $10K.
  • What else can Bitcoin be used for beyond illicit transactions?
  • Silkroad, and how little an impact it had on Bitcoin when shutdown. It was October 2013, and you could barely find it by looking at transaction volumes.
  • One of the biggest uses is transferring money to foreign families or speculators.
  • Where to get a Bitcoin wallet, and Bitcoin ATMs.
  • Once you have a wallet you can put $20s into an ATM, and buy bitcoin.
  • What are hard forks? Reviewed making your own Bitcoin.
  • Discussed the three transactions per second limit.
  • Created BitcoinCash from Bitcoin, to dramatically improve transaction rates.
  • Viewing Bitcoin as an advancement in money technology, people will be creating new technologies in this space.
  • Bitcoins make for a good medium for exchange, but not necessarily a good store of value due to its volatility.
  • The value of Bitcoin tracks Metcalf’s law, which means that the value of Bitcoin is related to the square of the number of unique people using the currency.
  • The value of a cyber currency might in-fact be a function of the square of the transaction rate if enough unique people are using it, which for Bitcoin is limited to three transactions per second. BitcoinCash and others have dramatically increased the transaction rate limits that hobble bitcoin.
  • Thanks to Bob for his expertise.
  • The trading value of Bitcoin going from $3K to $18K from September to December.
  • One last time we addressed whether Bitcoin is in-fact real?

Thank you all for listening.

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com

TE15: Bitcoin, Part 7 of 7 Digital Currencies

Bob Van Valzah dropped in for a long session on Bitcoin & Digital Currencies which turned into the second half of a seven-part series on Digital Currencies.

This episode is the conclusion of that discussion:

  • Any anonymous form of cash can be used towards bad ends, it’s not limited to Bitcoin.
  • Discussed handing over a bitcoin wallet to pay for something.
  • Banks, and suspicious activity reporting, limit of $10K.
  • What else can Bitcoin be used for beyond illicit transactions?
  • Silkroad, and how little an impact it had on Bitcoin when shutdown. It was October 2013, and you could barely find it by looking at transaction volumes.
  • One of the biggest uses is transferring money to foreign families or speculators.
  • Where to get a Bitcoin wallet, and Bitcoin ATMs.
  • Once you have a wallet you can put $20s into an ATM, and buy bitcoin.
  • What are hard forks? Reviewed making your own Bitcoin.
  • Discussed the three transactions per second limit.
  • Created BitcoinCash from Bitcoin, to dramatically improve transaction rates.
  • Viewing Bitcoin as an advancement in money technology, people will be creating new technologies in this space.
  • Bitcoins make for a good medium for exchange, but not necessarily a good store of value due to its volatility.
  • The value of Bitcoin tracks Metcalf’s law, which means that the value of Bitcoin is related to the square of the number of unique people using the currency.
  • The value of a cyber currency might in-fact be a function of the square of the transaction rate if enough unique people are using it, which for Bitcoin is limited to three transactions per second. BitcoinCash and others have dramatically increased the transaction rate limits that hobble bitcoin.
  • Thanks to Bob for his expertise.
  • The trading value of Bitcoin going from $3K to $18K from September to December.
  • One last time we addressed whether Bitcoin is in-fact real?

This was the final episode of the Digital Currencies series. Soon we’re going to post the full series as a single podcast, Episode 16, for those interested in hearing the whole thing in a single shot.

Please stay tuned, starting later this month we’re going to launch a series on security.

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com

TE14: Bitcoin, Part 6 of 7 Digital Currencies

Tonight Bob Van Valzah dropped in for a long session on Bitcoin & Digital Currencies which turned into the second half of a seven-part series on Digital Currencies.

This episode covers:

  • Can Bitcoins be counterfeited?
  • You can create your own currency, ScottCoins anyone?
  • Are Bitcoins safe to use?
  • Discussed malware & Showtime hack which put miners on victim’s system?
  • Ransomware and the use of Bitcoin as the vehicle for payment?
  • The perception of Bitcoin as negative as a result of criminal use.
  • Should I keep my Bitcoin in my wallet or in an exchange wallet?
  • What are the legal issues around Bitcoin, and can anyone use it?
  • Discussed other currencies, ToysRUS JefferyDollars, frequent flyer miles, etc…
  • How about other countries, for example, Kenya, which used cell carriers as banks.
  • Are countries like the US trying to regulate Bitcoin? At the edges when Bitcoin is turned back into fiat currencies that’s where countries are getting involved, for example reporting.
  • Why are criminals using Bitcoin? It’s a great way to move money across borders, also it affords users anonymity, but it’s no different than using US dollars.

We’ll close out this series in part 7 next week on December 14th, and include some recent news. Please stay tuned, and thank you all for listening.

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com

TE13: Bitcoin, Part 5 of 7 Digital Currencies

Tonight Bob Van Valzah dropped in for a long session on Bitcoin & Digital Currencies which turned into the second half of a seven-part series on Digital Currencies.

This episode covers:

  • Why is the price of Bitcoin so volatile?
  • What can drive the price of Bitcoin down?
  • Betting on Bitcoin via exchanges and futures.
  • How do I accept Bitcoin, and what is a wallet, and how does it work?
  • What is a hardware wallet, and a cold wallet?
  • How do miners actually make money?
  • What are transaction fees?
  • Should I drop a grand on a mining rig and get started?
  • Should I invest in Bitcoin? What is a binary investment option?
  • Can Bitcoin be lost or destroyed? How is this different from fiat currencies?

More to come in part 6 and 7…

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com

TE12: Bitcoin, Part 4 of 7 Digital Currencies

Tonight Bob Van Valzah dropped in for a long session on Bitcoin & Digital Currencies which turned into the second half of a six-part series on Digital Currencies.

This episode covers:

  • A quick review of Blockchain technology.
  • What is a fiat currency?
  • How do cryptocurrencies differ from traditional currencies?
  • Money as a store of value.
  • Commodity money, where a currency is backed by, and can be traded for the precious metal.
  • How fiat money derives its value.
  • How governments manipulate the money supply to meet their own needs.
  • We discussed the failings of the paper-based fiat currencies.
  • How credit cards overcome some of these issues.
  • The advantages of cryptocurrencies over paper-based fiat currencies.
  • Physical Bitcoins produced as a stunt, and the issues with them.
  • Using Bitcoin as a way to move money easily across borders.
  • Advantages of bitcoin mining rate, as a counter to inflation and currency manipulation.
  • Four-year correction in Bitcoin production, with rate halving, 16M today with 21M by 2040.
  • How Bitcoins are divisible into 100M pieces, called Satoshis.

More to come in part 5…

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com

TE9: Blockchains, Part 3 of 7 Digital Currencies

Tonight Bob Van Valzah dropped in for a long session on Digital Currencies which turned into a three-part series on Blockchains. The second half of the series, on Bitcoin will be published shortly.

 

In this the third part of our six-part series on Digital Currencies we’ll address the following questions around Blockchains:

  • How is a Blockchain different from a standard bank ledger?
  • Banking is about trust, how is a Blockchain more trustworthy than distributed bank ledger?
  • Is the Bitcoin market cap really $65B?
  • How are transactions in the Blockchain signed?
  • Can you briefly describe public key cryptography?
  • How does the Blockchain system know that my cryptographic signature is valid?
  • Who is Satoshi Nakamoto? Is he one guy or a group?
  • So now that we understand Blockchains where do we go from here, cryptocurrencies, smart contracts, etc…?

We hope you enjoyed this series on Blockchains now on to the currencies and applications that use them.

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com

TE8: Blockchains, Part 2 of 7 Digital Currencies

On September 14, Bob Van Valzah dropped in for a long session on Digital Currencies which turned into a three-part series on Blockchains. One or more series will follow covering all the issues surrounding digital currencies. To the left is a shot of Bob’s power bill for his Bitcoin Mining Rig that we discussed tonight, and also a video of that Mining Rig in production.

In the second part of our six-part series on Digital Currencies we’ll address the following questions around Blockchains:

  • So what are miners actually doing?
  • The enormous numbers, for example, the 10^18 power behind solving these mining problems.
  • Are we looking for primes in a huge field of numbers (hint, no)? Solutions have 130 zeros at the end or 2^130
  • Mining rigs as space heaters, the power issue.
  • Who decides which miner is a winner in extending the blockchain?
  • What happens when two miners each find a valid solution during the time of the flood?
  • Is it still one bitcoin block every 10 minutes?
  • What happens if it takes longer than 10 minutes to arrive at a solution?
  • What keeps the bad guys from circumventing the whole mining system?
  • How often would you win a bitcoin, and what is a mining pool?

In part three we’ll finish describing what is a Blockchain. While this has already been recorded and it should be released a few days following part 2.

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com

TE7: Blockchains, Part 1 of 7 Digital Currencies

Last night, September 14, Bob Van Valzah dropped in for a long session on Digital Currencies which turned into a three-part series on Blockchains. One or more series will follow covering all the issues surrounding digital currencies. To the left is a shot of Bob’s Bitcoin Mining Rig that we discussed tonight, and also a video of that Mining Rig in production.

 

In the first part of our six-part series on Digital Currencies we’ll address the following questions around Blockchains:

  • How did you get into bitcoin mining?
  • What is a Blockchain?
  • How is a Blockchain structured?
  • Where are Blockchains stored?
  • What is the role of a node?
  • Are all nodes miners?
  • Is a miner a person or a computer?
  • What is a mining rig?

In part two we’ll cover mining itself. This has already been recorded and it should be released a few days after part 1.

Interested in evaluating Solarflare’s ServerLock Firewall in the NIC technology?
Please send an email to sschweitzer@solarflare.com