Mining is important for the bitcoin industry because it’s what drives the whole system.  Without mining, or rather transaction processing, there is no bitcoin.  I often hear that “bitcoin mining is dead” or that “why would anyone mine once the block rewards go away?” Satoshi originally envisioned the block rewards as a supplement to kickstart and to incentivize mining/miners, as well as it being a way for the currency to be released into the world at a predictable rate.  As block rewards dwindle, another factor comes into play… that is the transaction fees.  As we start to scale the bitcoin network, the transaction fees will start to take up the void left by the dwindling block rewards. While each individual transaction fee is a small amount, when you multiply that by tens of thousands, it can add up to significant sum.  In the future, if bitcoins is $10,000 or $100,000 or more per coin, even making a fraction of a coin via transaction fees is still a huge income.

Jonathan, with coinometrics you are visualizing amazing statistics about Bitcoin. 

Right now we are looking at ways of analysing the health of the network. Bitcoin started out as an experiment and has grown into a laboratory supporting lots of interesting financial innovations. Our selfish mining metric helps detect any foul play among the miners who can withhold a block from the network and try and extend a private chain that outpaces the main chain. This has been shown to raise expected revenue under certain conditions. We are working hard to ensure that people are aware of such threats. Luckily, we have no reason to suspect any wrongdoing at this time.

How is Bitcoin performing against Paypal and Visa Card? How will it be in 5 years?

In terms of network performance, Bitcoin has shown impressive growth however it has a long way to go before it challenges Paypal or Visa. There are many proposals that look at network scalability and I am sure we will see more experimentation over the next year. In 5 years it seems like the main hurdle will be adoption and fending off any rival crypto currencies.

Considering all your statistics: If there will be 1.200 people at our conference in September and most of them are into Bitcoins since 2-3 years. How many Bitcoins will be in the former german parliament?

Wealth concentration in Bitcoin has been a fascinating topic for us at Coinometrics. As you can see here. The number of big holders (not me) that show up will severely skew our numbers. I have never attended a Bitcoin conference with less than 500,000 bitcoins in the room, this should be no different!

About Jonathan Levin, CO-Founder Coinometrics.com

Jonathan Levin is a postgraduate economist at the University of Oxford whose research focuses on Virtual Currencies. He is the convenor of the Oxford Virtual Currencies Working Group, an interdisciplinary working group focussed on the economic and social implications of Virtual Currencies. Recently, he cofounded Coinometrics, a website dedicated to producing new methods of measuring activity on the Bitcoin network.

Right now, the most exciting thing I see with crypto-currency is the technological expansion which is going to accelerate its social expansion. The mutation from crypto-currency into crypto-finance, crypto-contracts and eventually crypto-law will be smooth at first with incremental and tangental projects, but with projects such as Ethereum begin to be realised, we’ll start seeing some ground shift in the same way that facebook, the web and the telegraph altered the world.

Tell us about the Ethereum-Project. What are the main features from your point of view?

There are going to be two key points that will make Ethereum stand alone. The first is this notion of the plurality (i.e. the community of miners) giving life to (i.e. evaluating and enforcing) algorithmically-specified agreements, in much the same way that the community of bitcoin miners given life to the currency that is BTC. The second will be the effortless UX that we’ll bring. Using most apps on ethereum will be as simple as opening the ethereum-browser, a web-browser-like application that will make the secure and decentralised location, download and usage of apps (backed by contracts) as easy as going to a website is right now in a normal browser.

What impact will have the Ethereum Project for financial institutions? How can they adapt the technology?

Financial institutions, I think it is fair to say, make many of their riches not through hard labour but through opaque dealings, high barriers to entry and inefficient markets. Ethereum and technologies like it will disrupt this behaviour fundamentally by making dealings transparent, barriers non-existent and markets efficient. There is still a place in the world for reputable and trustworthy institutions acting as guarantors, insurers, market makers and trusted third-parties, but the world will be unable to support much of their current practices. They’ll either switch to transparent, open and accountable back-ends with accessible and inclusive front-ends, or efficient technological solutions will slowly and inevitably make them a historical irrelevance

About Dr. Gavin Wood, CTO Ethereum

Dr. Gavin Wood, MEng, PhD. Born in Lancaster (UK), Gavin has been programming computers since he can remember. He graduated from the University of York twice, gaining a Masters degree and Doctorate in Computer Science and leaving the ‘Moodbar’, a popular visualisation on the Linux platform, in his wake. He spent some time working in the UK games industry where he designed and implemented a next-generation realtime self-optimising audio engine based on the declarative language paradigm.

He has worked on various projects since, including implementing a C++-based video analysis DSL, tools to analyse english-law contracts, the first semantically-rich lighting control deck, and the first C++ language workbench. These days he busies himself as the co-founder and effective CTO of the Ethereum project, coordinating and guiding the development process and helping flesh out the final protocol.

For fun, he creates voting frameworks, makes analytic music visualisations, designs strategy board games, blogs about social dynamics and teaches schoolchildren the wonders of fractals.

]]> https://www.world-bitcoin-forum.com/2014/04/01/gavin-wood/feed/ 0 https://www.world-bitcoin-forum.com/2014/03/31/brianfabiancrain/ https://www.world-bitcoin-forum.com/2014/03/31/brianfabiancrain/#comments Mon, 31 Mar 2014 20:01:20 +0000 https://www.world-bitcoin-forum.com/?p=506 How did you get into crypto-currencies?

I’m originally an economist, but after spending a few years in the tech/startup world, I went back to university to do a masters in cognitive science. In summer 2013, while I was finishing my dissertation I learned about Bitcoin and became obsessed with it immediately. It was clear to me very quickly that this is a revolutionary innovation and it was also interesting revisiting economics with Bitcoin in mind. Since August 2013, I have been spending all my time on a variety of Bitcoin-related projects such as the Bitcoin Startups Berlin group and the Epicenter Bitcoin newsletter/podcast.

Which crypto-currency has the most potential beside Bitcoin?

Cryptocurrencies that enable building more complex applications and contracts have lots of potential such as Mastercoin, Bitshares/Protoshares, Nxt, Counterparty and Ethereum. I’m not sure which of these will end up working out, but Ethereum seems to have the most competent team and strongest community. Recently, I have also started thinking about whether Bitcoin’s proof of work will lead to higher transaction costs in the long run. In that case, currencies with a different and more cost-effective mining model might actually be able to displace Bitcoin.

How widespread will be the use of crypto-currencies in five years?

I think in five years cryptocurrencies will have reached widespread adoption. Of course, it is difficult to predict such things, but I’ll venture the guess that one billion people will own some cryptocurrency by then. While, I think there is a good chance Bitcoin will still be the leading cryptocurrency, I would be surprised if we did not see a plethora of different currencies filling different use cases. I also think some of the Bitcoin 2.0 protocols such as Mastercoin or Ethereum will have found some niches that cannot be sufficiently filled by other means and found widespread use there.

About Brian Fabian Crain:

Brian Fabian Crain is a Berlin-based economist and entrepreneur. He’s the founder and co-host of the Epicenter Bitcoin Podcast, Europe’s leading Bitcoin podcast, which features in-depth discussions of news and developments in the Bitcoin world as well as interviews with innovative people in the Bitcoin community. Brian is also the founder and organizer of the Bitcoin Startups Berlin group – the largest and most active Bitcoin meet-up group in Germany. Brian has degrees in economics from the University of Chicago and the London School of Economics and in cognitive science from University College London.

What is the most exciting topic in Bitcoin for you right know?

The Bitcoin technology and how the block chain idea will evolve. It is exciting to see how Bitcoin has been opening peoples minds as well as legal doors for a plethora of new currencies worldwide.

Tell us about your passion for digital currencies. How did you discover this topic and when?

Long before the Bitcoin hype started I was very much interested in the relation between economics, money and sustainability, feeling that the creation of something as important as money should be decentralized for many reasons. As a consequence, we developed KOINA, a currency and marketplace for sustainable production and consumption, which will be launched soon.

How can Bitcoin change the financial industry? What possibilities do you see?

Bitcoin opened Pandora’s box for a new age of non governmental currencies. Future alternative currencies in the wake of Bitcoin have the potential to truly change the money game, by design, not by disaster..

About Daniel:

Daniel Neis [CEO / KOINA AG], 41, business economist, has over 15 years of experience as an entrepreneur and founder, as a consultant for start-ups and as a visionary strategist with a focus on management, marketing and sales. He was owner and manager of a sales agency and has operated a global trade agency for renewable commodities. In recent years he has devoted himself entirely to developing and promoting sustainable strategies in modern societies. As the initiator of the project KOINA he combines his experience with his international networks.

When did you become interested in Bitcoin?

First and foremost, stability! Second, a little bit of regulation

It already is! Not from a traditional investment perspective or for the purpose of diversification but to experience bitcoin real time.

About Jeroen:

Jeroen Blokland works as a portfolio manager at Robeco, a prominent independent asset manager from the Netherlands. He manages several multi asset portfolios for both institutional and retail clients. He regularly writes columns about financial markets on seekingalpha.com and his own blog (jeroenbloklandblog.com/). You can follow him on Twitter, @jsblokland

What do you think about the future of Bitcoin? What possibilities do you see?

The future of Bitcoins is really open. If they will gain security and solve the deflation problem they can become the first important internet currency. If not they will stay in a niche or even vanish.

Where do you see Bitcoin in five years?

I guess that new start-ups or even established players in the payment market will combine the advantages of Bitcoins and traditional payment methods so that the innovation of Bitcoins will have a long lasting heritage. Maybe Bitcoins can achieve that themselves but I doubt it.

What are the main challenges for Bitcoin?

Close security holes, solve the deflation problem and meet existing regulatory standards.

About Achim:

Achim Himmelreich holds a Dipl.-Kfm. Degree from the University of Cologne and worked as an independent consultant and lecturer before he joined Mücke, Sturm & Company in 2006. The focus of his work lies on E-and M-commerce as well as Social Media. From the very beginning he accompanied the enormous changes that the digital revolution has brought by successfully promoting and realizing the establishment of new business models in numerous projects. He is Vice President of the Federal Association of the Digital Economy (BVDW).

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