Will Bitcoin fail the way all 'New Money' has failed in the past?

Leo Zhang

By Leo Zhang

Nobel Prize economist Robert Shiller, famous for his studies on financial crises, expresses his pessimistic view on the "Bitcoin bubble". In the article below, Dr. Shiller parallels cryptocurrency with some of the attempts to invent "new money" in history (see story below). It is no secret that there were many iterations of digital money before Bitcoin. However, Nakamoto consensus is a radical invention that Dr. Schiller is not taking into account in his argument. On a self-sustaining, distributed consensus system, money is the most primitive application.

The old allure of New Money
(Robert J. Shiller)

"New ideas for money seem to go with the territory of revolution, accompanied by a compelling, easily understood narrative. In 1827, Josiah Warner opened the 'Cincinnati Time Store' that sold merchandise in units of hours of work, relying on 'labor notes,' which resembled paper money. The new money was seen as a testament to the importance of working people, until he closed the store in 1830."

Why Bitcoin is different from the "New Money" in history

The cargo cult mentality in blockchain

Consensus 2018: the good, the bad, and the ugly
(Polvo)

"Arge institutions that deliver very few innovations, such as FedEx and Deloitte, specially when we consider the amount of resources at their disposal, had too much time to speak. But even most the startups were talking big, while delivering little."

Technical & Updates

Privacy coin Verge experiencing 51% attack, again

On profitability of selfish mining
(Cyril Grunspan and Ricardo Perez-Marco)

"Selfish mining is an attack on the Bitcoin protocol, but the arguments present in the literature do not properly justify the attack. They lack of a correct evaluation of the cost of the attack and a proper analysis of profit and loss per unit of time. To compare the profitability of different mining strategies one needs to compute the average length of their cycles and their profitability ratio, that is a new notion introduced in this article."

Bitcoin Q&A: Genesis block and coinbase transactions

Pisa: arbitration outsourcing for State Channels
(Hacking, Distributed, by Patrick McCorry, Surya Bakshi, Iddo Bentov, Sarah Meiklejohn, and Andrew Miller)

"Pisa focuses generic state channels which can be used to build any application (i.e. payments, auctions, boardroom voting, gaming). The core contribution is a new protocol for hiring a new third party agent called the custodian. This custodian is designed to help alleviate a new assumption in state channels which require every participating party to remain online (synchronised with the blockchain)."