Tuesday, November 8, 2011
The State of the Bitcoin Union
It has now been two years, ten months, and four days since the genesis block was established.
In this short period of time, the system has grown from 50 Bitcoins into an economy worth an equivalent of 23 million US dollars. Bitcoins can be bought and sold on over 20 exchanges and are traded for 22 of the world's currencies, making them accessible to hundreds of millions of people around the globe.
At 107 PetaFLOPS, the Bitcoin network is 19 times faster than the next most powerful distributed computing system. It also possesses nearly double the computing power of the 500 fastest supercomputers, combined; an incredible peer-to-peer network that ensures the validity of every Bitcoin transaction. Our money is being managed both democratically and globally; a first for human civilization.
In the past year, as entrepreneurial types took to their computers to build services and applications to take advantage of Bitcoin, nefarious types began capitalizing on weak code, poorly designed sites, and careless users. While Bitcoin is itself completely secure, the network cannot protect everyone from themselves. Unfortunately, the media has focused on these careless individuals, and has erroneously interpreted the mistakes of some of Bitcoin's users to be proof of flaws in the system. Reporting on the success of Bitcoin does not generate pageviews or sell newspapers, however, so it may remain an uphill battle to change the message in the media.
To those who wish to spend their Bitcoins, the array of goods and services that can be exchanged for Bitcoins grows daily. From art to web hosting, food to jewelry, music to games, there is not a whole lot that cannot be bought for Bitcoins.
Direct trade, however, does not even begin to describe the capabilities of Bitcoin.
Bitcoin technology can be leveraged to enforce contracts of all types, identify property holders, and count votes. Imagine if people, living under the thumb of corrupt governments, demanded a Bitcoin-based voting system that could guarantee vote anonymity and instant and perfect counting. Or if America's banks had used a Bitcoin-type contract system to identify the owners of homes; the foreclosure mess it's facing would never have happened.
Our traditional financial infrastructure depends on unlimited growth. It's a system that even a six-year old can see is doomed to fail. The boundaries of our planet are not unlimited, nor are its resources infinitely renewable, yet we manage our money under the assumption that there are no limits. Amazingly, one of the largest criticisms of Bitcoin is that it is deflationary in nature, yet it is the only financial system that addresses the reality of our existence.
To those of you building and maintaining the exchanges, markets, and applications for Bitcoin: congratulations, you will profit greatly. Your profits, however, will not come on the backs of others, rather, they will be an acknowledgement from Bitcoin's users that you are providing them with a service that benefits both sides of the transaction.
To those of you waiting for the infrastructure to be built; rest assured that it is coming. It will take time, however, as the large corporations with deep pockets and vast resources that normally support such projects are the ones who are going to lose to Bitcoin, thus it will be up to the smaller-scale talent in the community to make it happen. We have already seen what is possible, so do not lose faith.
The vision is that Bitcoin will bring every person on the planet face-to-face with each other, that any person will be able to buy or sell any good or any service for any price to and from anyone, anywhere; that no corporation will ever again find itself with the privilege of deciding who is allowed to get paid or supported; and that no bank will ever again profit from a currency exchange, ATM withdrawal, wire fee, or account charge of any type. We are well on our way towards realizing that vision.
Tomorrow, November 9th, will be three years to the day since the Bitcoin project was registered on SourceForge. It is incredible to see how far the project has come in that time. It is your talent and effort that have brought us to this stage, and it will be your talent and effort that will decide the fate of Bitcoin's next three years.
Let's get to work, shall we?