A retrospective on the ideas behind Bitcoin in terms of getting traction.
Back in 1998, Wei Dai described bmoney, a scheme for a group of untraceable digital pseudonyms to pay each other with money and to enforce contracts amongst themselves without outside help. Other proof-of-work schemes, such as Hashcash cite that paper, and are themselves utilized by Bitcoin. Nick Szabo described a similar scheme and associated economics in bitgold.
But an idea becomes real only when you start implementing, tackle details, surmount objections and show it working.
The sages of cryptography, Rivest and Shamir, published two micropayment schemes akin to digital coins “for making small purchases over the Internet”.
Compare that to the opening sentence by Nakamoto - “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments”.
Both papers introduce essentially the same arguments typical of a micropayment scheme. One brings to mind candy machines and newspapers, while the other evokes a new world order.
Bitcoin is designed from the protocol layer to help participants profit. As a reward for tracking everyone’s spending and generating transaction blocks you get to give yourself Bitcoins.
In addition to bootstrapping the economy, it attracts precisely the kind of people who promote the project, provide the trading and exchange infrastructure and spark a speculation frenzy.
Finally, let others drive it forward.
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