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3:on bitcoin


A discussion of various aspects of Bitcoin in unavoidable.  We localize these primarily to this section of this document.

Full Disclosure:


The original author, and at present the only author of this documentation is 'tvbcof' (aka, 'me' and 'I' in this section.)

I am both in support and in awe of Bitcoin.  I also own a fair number of BTC and expect that to remain the case for some time.

The best outcome for the future is that Bitcoin never runs into scaling or usability issues which impact it's promise and thus that 'bakcoin' and all of the concepts and thoughts presented here are futile.  As time goes by, I become ever more and more of the opinion that this is unlikely to be the case, and one way or another, having an alternate solution waiting in the wings would only be prudent.

My concerns about Bitcoin are somewhat personal and may or may not be shared by future contributors to this document so I will describe some of the basic ones here in a personalized section.

One of my biggest concerns is that a monolithic solution such as Bitcoin is more prone to catastrophic failure.  The expectations of Bitcoin seem to be set such that fairly long duration failures will likely be misinterpreted by the user-base as a terminal event even if they do not necessarily need to be, and that itself would lead to catastrophic results for the currency solution.  I mention this relatively minor and solvable issue only to illustrate the danger of monolithic solutions which have not well defined, tested, and communicated defenses.

The item which 'planted the seeds of doubt' into my mind about Bitcoin, and thus started me in thinking about alternate solutions was a document related to scalability and which can currently be found here:

In a nutshell, my main complaints are:
  • I do not believe that Bitcoin is setting it's sights high enough in, for instance, being 'as big as Visa'.
  • The 'supernode' structure where transmission nodes take the form of a cluster of dozens or hundreds of cores with load balancers distributing the work is quite different than the solution which attracted me initially.  Today I run a fully functional transfer node (full client) happily on my i386 router and behind a consumer grade network connection.  This give me some confidence that many people could do the same and as a consequence that a viable monetary system could survive various types of attack.  When the only viable transfer nodes are of the 'supernode' variety and specially provisioned bandwidth is required, Bitcoin is simply not the solution which attracted me in the first place.
  • Since the 'Arab Spring', governments and corporations (which I see as increasingly two words for the same entities) have gone into high gear to mitigate the danger of free flow of information between non-aligned citizens.  I suspect that they will succeed for a while (before they ultimately fail.)  I expect that at the time when a crypto-currency solution is most needed, Bitcoin will be at it's most vulnerable due to the necessity of a 'supernode' solution.  Basically it would become a victim of it's own success.
While the dichotomy which exists between 'exchange currencies' and 'reserve currencies' was something that I have considered from about the first day I heard of Bitcoin, I spent a lot of effort trying to figure out how Bitcoin could be a reserve currency.  Eventually I came to the conclusion that a purpose designed solution to this problem would provide better results (and indeed is the only workable strategy.)

A primary goal of Bakcoin is to facilitate an 'ecosystem' of exchange crypto-currencies and one feature of this is that there is competition.  The result could include competition with Bitcoin which could rightly be perceived as damaging to it.  To me cyrpto-currencies are potentially among the most important creations in human history.  For this reason I would choose a healthy crypto-currency ecosystem over the health of Bitcoin even if it it costs me personally.

Bakcoin's posture toward Bitcoin:

Bakcoin's posture toward Bitcoin, or at least toward the Bitcoin community is defensive.  Part of the reason for this is that this is the default posture toward anything.  Another part of it is that we anticipate that Bakcoin will be assumed (possible correctly) to be a threat to Bitcoin.

In actuality the existence of Bakcoin owes a great deal to Bitcoin, we hope that Bitcoin succeeds, and will do what we can to facilitate that outcome.  Generally speaking, Bitcoin is to Bakcoin a respected 'exchange currency' and hopefully one day an aligned and sponsered one if it is in everyone's interest.

Bakcoin anticipates making use of Bitcoin to 'ramp up' since it is by far the best solution to achieve this goal (TODO: link to ramp-up).