What Do You Want to Know About Bitcoin? And Do You Really Care?

(Photo: Zach Copley)

(Photo: Zach Copley)

We get a lot of e-mails with requests/suggestions for podcast and writing topics. These days, the most popular request by far is for  Bitcoin. I am still not sure we’ll do it but I’m thinking about it. If so, what do you want to know? Please be specific. Also: do you really care? It strikes me that, at the moment, Bitcoin is one of those things that a small number of people care about hugely but that most people couldn’t care less. (Freakonomics readers aren’t, of course, “most people.”) The rapid spikes and drops in value of course invites lots of news coverage but that is among the least-interesting aspects of a cryptocurrency, isn’t it?


Avinash Godkhindi

What would be the impact of bitcoins if they succeed on the monetary policy of countries? What is possibility of central bankers globalky getting together to ban bitcoins as Chicago Booth's Prof. Rajan led Reserve Bank of India(India's central bank) has done?

evan

As early adopters, like amazon that plan to accept bit coin, what are their likely motivations? Is it customer service; and the coins will be transfered to dollars imediatly. Or speculative; they will keep the coins and ride out the wave of value changes eight he hope of value appreciation....or is it just free marketing because the news picks up the story but few will ever utilize it?
Trading bit coins between internet collectors is one thing...but if the market accepts it for real goods, that's interesting!

paul

I think Bit Coin has made me ask more questions about Fiat money, in particular Dollar and Pound, since at least the Bit Coin has a uniqueness to each Coin.
No Money is unique [as it should be] and is abused by the powers known as government/multi-nationals to append value and status. Perhaps this is why the banks and governments don't like it and that's the fact that they cant dilute it [of course though they can control money going in [China] and also potentially influence the market [Banks].

Avinash Godkhindi

Correction Reserve Bank of Indiahas issued a public advisory / cautionary note highlughting the rusks of trading in virtual currencies which has caused the bitcoin exchanges in India to shut down indefinetly

Dan DuBeau

Satoshi Nakamoto's white paper describes a specific strategy to prevent an unlimited number of copy-cat currencies from overtaking or competing effectively with Bitcoin. The strategy employs game theory concepts that incentivizes cooperation and to a lesser extent discourages competition. Many of the altcoins consider Bitcoin's current deflationary phase a weakness, and yet it is perhaps its most important strategy for encouraging adoption and cooperation. I'm interested in the game theory concepts, different possible scenarios, and would like to hear meaningful commentary and debate.

Franklin Samson

Well, whoever made it was very clever: he understood about programming, cryptography, torrent-style networking, money supply and demand, money transactions verification, fiat currency creation (and how to avoid it) and so on. Check out Digitopoly article about it.

Paul Mabry

How about Linden on secondlife.com (virtual 3D world) you can actually convert these to cash with Paypal!

Aly Bainbridge

I'm very interested! I actually just heard about Bitcoins and thought to myself "I wish freakonomics would do a podcast on the topic". I want to understand what the Bitcoin is and how it functions in the market.

Greg

I'm more interested in the social phenomenon of them. Why people get obsessed with them, why they think they are the saviour or devil. What that means etc. Why people think simple scarcity will mean they will be successful.

Everyone who listens to freakonomics probably already knows enough about what they are how they work etc so I'd agree don't bother unless you can find a great hook on which to hang a show on them and any show would be about that hook and need to feature only minimal amounts about the whole what are they what do they mean etc.

Bitcoin can be very boring. It's also clearly not all that. It wouldn't surprise me if another bit coin comes along and wipes bitcoin by doong it better. I imagine Bitcoin is the ask jeeves to the google of whatever comes next. And it'll never be much more than a niche because you cant pay your taxes or have a tangible thing so why would people want it en mass?

However it may well be the start of something and this long road to the death of physical currency

Read more...

Ryan Brooks

Like Ryan Isaacs above me, I'd be quite interested in hearing the opinion of economists on Bitcoin. One of the questions that I have about cryptocurrency in general is could the different coins be used to study the growth (and in many cases, the death) of a (very) small economy? Or are cryptocurrencies more like commodities or securities?

brian t

My main concern with Bitcoin (et al) today is the massive disconnect between its intended use (an alternative currency that with real-world uses) and its actual use today as a speculative investment. I don't have a figure for that, but I suspect the $ ratio of intended vs speculative use is less than 1:999.

My preferred definition of "speculation" is "making money off of other people without doing any actual work". Watching the Bitcoin market is like watching the stock market on 100x fast-forward. In this grossly unequal global economy, there is a small coterie of "investors" sitting on money, whose sole guiding investment principle is "never make a loss". The wild swings in Bitcoin price serve only to attract speculators, while diminishing its utility as a store of value, even over a very short term.

Linda

I'm interested in bitcoin as a concept but then again I'd tune in to listen to the Steves read the phone book so don't go by me. Do I care about bitcoin? I just might. Are there other alt currencies? What role did bitcoin play in the development of the deep web? What would possess a local merchant in Albuquerque, New Mexico to suddenly start accepting bitcoin as payment when Freakonomics isn't even ready to do a show on it yet? What did China do recently that devalued bitcoin by reportedly 50 percent and could they decide to do that with the dollar? It's freaky economics all right. If not you, then who?

Joe Vago

I would really like a podcast on Bitcoin. What is most fascinating to me is the potential future of Bitcoin and how Bitcoin is used as payment on underground markets.

Eugene Ciurana

Hi Stephen!

Can't see the actual podcast on iTunes or here for playback... Just FYI.

Have a fantastic New Year!

Denis

Talk about:
1. In past history, what caused salt or rare seashells to be valuable and used as currency?
2. What makes gold valuable today? Its rarity? Industrial use? Why isn't silver as valuable as gold?
3. What really makes the USD have intrinsic value?
4. In contrast, what cause the hyper inflation in Zimbabwe?
5. Summarize by offering an opinion whether Bitcoin can become a viable form of currency.

The content of this podcast will become very relevant in the future since we will look back and listen to your views during the infancy of cypto-currencies.

Scott

Bitcoin is not the currency of the Internet. It is the Internet of currency. It provides an API into the financial sector that anyone can use. Focus on the value of the underlying protocol. Examples include micro transactions, n-of-m spending transactions, smart property, and escrow transactions.

Follow the block chain not the money :)

Eureka

Here in Canada, I know of a nascent movement among sex trade workers and feminist pornographers to begin using Bitcoin as a means of payment- it provides a relatively safe and easy electronic transfer for activities which are legal under Canadian law but which some may consider repugnant. For example, Paypal has a "moral" clause and refuses to work with sex workers, pornographers, and other "adult" business models even when they are legal and run ethically. I would be curious to hear about other examples of legal but "repugnant" businesses using Bitcoin for electronic payment, and how the wild swings in value impact that model.

Brad

Payments between two parties are one application. What are the other applications of this technology?

There have been suggestions by technologists and entrepreneurs (i.e. Tony Gallippi at the Senate Hearing on Virtual Currencies) that the network can be used as a cheap and distributed means of security exchange and asset registry. Is there a market for this?