Is Bitcoin still "digital gold," or something else entirely?

Leo Zhang

By Leo Zhang

"Time is the coin of your life. It is the only coin you have, and only you can determine how it will be spent."
--Carl Sandburg

As the Fed's grand experiment with quantitative-easing matures, deep flaws in its policies are emerging. If central bank narratives are not to be believed, then what is their role in the information age; why not go back to hard money? This is the question that prompted George Gilder to write his 2015 book, and this question has reappeared recently in the form of the articles below, which make the case for new financial behaviors powered by Bitcoin.

In Quest for Digital Gold (Yahoo)
"In summary, despite the rise and fall of various alt coins and fork considerations, 'time' works FOR bitcoin, not AGAINST it. Every day it doesn’t disappear, it gets one step closer to a permanent status of digital gold."

A Bitcoin is Forever (Elaine Ou)
"Diamonds are forever. That six-figure wristwatch is your son’s inheritance. Which brings me to Bitcoin. Bear market got you down? Don’t worry about it. You never actually own a Bitcoin, you merely look after it for the next generation."

How Cryptography Redefines Private Property
"In short, public-key cryptography, together with digital scarcity, have given us digital hard money. Digital hard money inherits all the strengths of digital goods: instant, borderless, and impossible to regulate or control. Most importantly, this digital hard money can be privately owned."

Fed warns that a 'particularly large' plunge in market prices is possible if risks materialize
"'An escalation in trade tensions, geopolitical uncertainty, or other adverse shocks could lead to a decline in investor appetite for risks in general," the report said. "The resulting drop in asset prices might be particularly large, given that valuations appear elevated relative to historical levels.'"

Other News

Static code analysis exposes the problems with legacy code in popular cryptocurrency projects

I Put Code For Three Popular Cryptocurrencies Through Static Code Analysis—With Surprising Results from r/BitcoinTechnology

ForkLog Exclusive: Slush Pool Breaks Down Bitcoin Mining Ins and Outs, Market Slump Consequences for Miners
"We would definitely appreciate much stronger competition among hardware vendors. This has harmed the whole bitcoin space a lot. Even if you look at pool competition, it is not ideal too. If we had the power in the past we would have stepped into the hardware manufacturing segment providing extra diversity in bitcoin mining equipment.We find very important the wide adoption of Segregated Witness and transaction malleability fix as aside effect of segwit. Both are paving a solid way for level 2 protocols like Lightning Network."

ASICs are beneficial to the long-term security of the network

Behind MimbleWimble
"The biggest benefit is for new nodes joining the network. Recall that the chain is validated by continuously checking whether the total input and output sides of the equation balance. Because of this, it is possible to prune matching inputs and outputs and still check that the chain validates. This means that when new nodes want to join the network, they may be able to download just the relevant subset of historical inputs and outputs. Existing nodes are also able to reclaim a bit of disk space, but this is something that other cryptocurrencies can also do fairly easily."

US Regulators Tie Two Bitcoin Addresses to Iranian Ransomware Plot
"The Treasury Department’s Office of Foreign Assets Control (OFAC) announced Wednesday that it was adding two Iran residents – Ali Khorashadizadeh and Mohammad Ghorbaniyan – to its Specially Designated Nationals list, and for the first time in the list’s history, bitcoin addresses associated with the individuals will be included with other identifying information, such as physical addresses, post office boxes, email addresses and aliases."

Bitfinex announces Tether neutrality and launches new stablecoin pairs
"Now in reflection of the evolved stablecoin market, and in keeping with our ethos that an exchange should be a neutral actor, wallets on Bitfinex will support Tether balance USDT and EURT in addition to the existing USD and EUR fiat balances. Users may then use this new pair to convert fiat to Tether and vice versa as desired. This effectively means that Bitfinex users can deposit, trade and withdraw USD and EUR in both fiat and Tether denominations."

What Bear Markets Look Like
"I think some crypto asset (and possibly a number of crypto assets) will have a price chart like Amazon’s current one in 18 years. But we will have to do what Amazon did, hunker down and build value and survive, for quite a while to get there. And I think things will get worse before they get better."

Venmo Caught Off Guard by Fraudsters
"In the first three months of 2018, the digital money-transfer service owned by PayPal Holdings Inc. PYPL 3.64% recorded an operating loss of about $40 million—nearly 40% larger than the loss for which the company had budgeted... Fraud can take different forms on Venmo. Criminals can load stolen credit cards onto new Venmo profiles and send money to accomplices. Hackers can take over accounts of existing Venmo users and pilfer their money. The company generally reimburses users who lose money in such transactions. It isn’t clear what caused the first quarter’s increase in fraudulent activity, or whether any culprits have been identified."