Some claim it is the Next Big Thing and going to overturn civilization. It sounds so wonderful with peace, love, and all that: technology is going to solve all human ills and whatnot. Technology dreams seem to invite a blindness.
Luboš Motl gets to the key issue with Bitcoin: Decentralized blockchain and subjectivity of the wave function – “I don’t find the key “virtue” of the cryptocurrencies – decentralization of the list of transactions – terribly important or practical.”
First, think about the blockchain. This concept is a key part of the Bitcoin network. It’s a list of records that remember which payers have moved the cryptocoins to which recipients. This list is growing. All the new transactions are added on top of the old ones. The new transactions are added in blocks. The blocks are finalized when some miner solves a mathematical problem. The solution is being verified by others.
The whole obsession of the cryptocoin community is the ability of the blockchain technology – and therefore the payment system based on the Bitcoin etc. – to decentralize the list of records. Normally, when you’re making payments through a bank, the bank’s computers remember the “official” balance of each account and the list of payments that have taken place.
There is a proposal to use these technologies to assure voting integrity, too. The implications of a distributed ledger of all transactions (or votes) don’t seem to register. That is one big chunk of data that is copied many times. Then there is the inequality thing about miners. These are the folks in the elite set that has the resources to use brute force to calculate security checksums for blocks of transactions which they leverage to gain income.
Jonah Goldberg found the word “ackamarackus” that seems to fit here.