{"id":134,"date":"2018-02-18T02:48:12","date_gmt":"2018-02-18T10:48:12","guid":{"rendered":"https:\/\/blogs.ubc.ca\/mehdi\/?p=134"},"modified":"2018-03-04T01:36:35","modified_gmt":"2018-03-04T09:36:35","slug":"bitcoin","status":"publish","type":"post","link":"https:\/\/blogs.ubc.ca\/mehdi\/2018\/02\/18\/bitcoin\/","title":{"rendered":"Bitcoin"},"content":{"rendered":"

I have been recently reading about Bitcoin. This<\/a> is a semi-tech book to get you started with learning about the different building blocks of Bitcoin.<\/p>\n

Bitcoin\u00a0has three main components, the Blockchain, the peer-to-peer network, and the consensus paradigm. To learn about, read some books like the one that I am suggesting above.<\/p>\n

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Risks:<\/p>\n

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  1. There are transaction fees if you do not want to deal with the technical side of the matter (have your own node) — you’d need to resort to traders and exchangers. Thus, Bitcoin\u00a0is no different from the bank, which charges for a transaction. This will get worse every four years as the mining reward is reduced by half!<\/li>\n
  2. The number of blocks keeping transactions increasing, what are the preparations for discarding the old blocks? Perhaps the notion of keeping the entire Blockchain is not a good idea since it requires more than one hundred gigabytes of storage. There is a remedial solution called\u00a0simplified payment verification<\/em> (SPV) to allow nodes to operate without storing the full blockchain, however, this method seems a cover-up for the main problem.<\/li>\n
  3. The computation and resources eating power for solving the authenticity of the blocks is increasing, what preparations must be made toward them?<\/li>\n
  4. Bitcoin and similar cryptocurrencies are the sources of crime. Look at Bitcoin’s dark side abusers, the Silk Road story. Could it come back again? Well, I know there have been a\u00a0one-hundred million dollars one-time transaction, obviously not by normal citizens! So still a playground for criminals.<\/li>\n
  5. It is a virtual\u00a0money based on the code. If the code changes,\u00a0so do the rules. Ironically, is the code running any unit tests! Lol!<\/li>\n
  6. I would assume, if we want to take cryptocurrency as serious as real currencies, they need some backup by a state or bank, perhaps!<\/li>\n
  7. Bitcoin is still a floating-price money, fluctuates a lot based on the supply-demand market, every second; see GDAX<\/a> order book.<\/li>\n
  8. Could there possibly be Bitcoin paper bills in future? If no, what happens to the cash spending? If yes, who is in charge of issuing the paper bills?<\/li>\n
  9. How would the tax system work with Bitcoin? I guess the entire point of Bitcoin has been to bypass the government tax, wasn’t it? Then how can we govern our communities without taxes? No tax no improvement promises in our community?<\/li>\n<\/ol>\n

    In addition, there are some interesting articles that are worth sharing here:<\/p>\n