BITCOIN: A PEER TO PEER ELECTRONIC CASH SYSTEM

Somebody tweeted to me a new paper on Bitcoin. The paper called it a peer to peer electronic cash system. Satoshi Nakamoto is the author but searching for it resulted in nobody by that name suggesting it is an alias.

The tweet linked to SourceForge where the software was posted. Clearly there was a lot of work gone into the package but much of it was challenging to understand. The code has a MIT like license that allows royalty free use.

The blockchain seems to be some kind of ledger that is computationally demanding that is questionable. The blockchain is a merkle tree based construct which makes it rather unwieldy.

High costs of transactions are not likely to succeed in the marketplace. The credit card processing systems are far more efficient for handling billions of transactions an hour.

Evidently Nakamoto has studied some economics. Nakamoto is correct that banking problems are endemic but this id driven by political choices as much as anything. Between stupid fiscal policies driving monetary policies leads to inflation.

The paper indicted bitcoins are limited in supply which makes them even less desirable compared to the global economy. Gold is not finite but mining it is a slow process that does not materially affect the overall supply.