Revised Bitcoin summary and brief comparison with government currency

Bitcoin is a worldwide ledger backed by open source code, cryptography and the most powerful and secure decentralized computational network on the planet. The Bitcoin network’s applicable computing power is orders of magnitude more than Google’s, Apple’s, Microsoft’s, Amazon’s and all the world’s governments’ combined applicable computing power.

The Bitcoin network’s computing power secures the ledger against any tampering whatsoever.

The Bitcoin ledger records ownership of ‘bitcoin’ tokens. There is a limit of 21 million bitcoins, and each is divisible into 100 million smaller units, or about 250000 units per human alive, enough for everyone to own some. A few new bitcoins are created at a fixed rate every 10 minutes on average until the maximum is eventually reached. Ownership of newly created bitcoins is assigned to miners, which can be anyone that contributes computing power to Bitcoin’s distributed network.

Ownership of bitcoins is possible solely by being the holder of the private key(s) to those bitcoins. A private key is a sequence of letters and numbers the owner has recorded somewhere, such as in a password-protected file, on paper, in an app on a smartphone, or even committed to memory. Bitcoin owners who keep their private keys secret cannot have their bitcoins taken away by any entity without their consent. Government currency can be seized or destroyed without the owner’s consent, either physically if it is in the form of cash, or electronically if it is in a bank account.

Dollars, Euros, Yen, and all other government currencies are not backed by gold or silver anymore, they are simply created as desired by central banks such as the Federal Reserve in the USA or the European Central Bank in Europe. Currency is also created out of nothing by regular banks in a process called fractional-reserve banking, whereby the banks legally lend out a multiple of the amount of currency deposited by customers.

As more government currency is created, the value of the currency already in circulation diminishes, causing indirect taxation known as inflation tax. Governments use this mechanism to stealthily finance activities such as war that would otherwise require directly taxing citizens. Direct taxes are far more noticeable and subject to cause dissension.

Holders of bitcoins cannot be subjected inflation tax because any attempt to change Bitcoin’s unit limit or structure automatically creates an altcoin. An altcoin may have a new ledger, or its ledger can be a copy of Bitcoin’s ledger, known as a fork, made the moment right before the unit limit or structure change was made. Either way, the original Bitcoin ledger, with its original unit limit and structure, continues to exist. Owners continue to own bitcoins on the original, as well as on any fork. The total value of the combined original and forked ledger remains the same, proportional to the distribution of computing power securing the ledgers.

As more citizens hold their savings in Bitcoin, the value of government currency is diminished, along with the government’s ability to indirectly tax citizens without their consent in order to finance questionable activities.

This summary is an elaborated version of this one I spotted on Reddit.

Pulling the string to see where it leads.

Try this experiment. Get your hands on your own bitcoin. 1 penny’s worth, a symbolic amount. I’ll send it to you myself to make it easy, just send me your deposit address.

Then ask yourself:

  • “Am I allowed to own this stuff? What can give others the right, or the power, to compel me to not use it? Who gives them this power?”

If you keep pulling on that string, it might lead you to a new awareness, it might not.

On April 30, 2013, I discovered Bitcoin, and those were the first questions I asked myself. This led me deep into the rabbit hole. I won’t tell you what I discovered in there. Unfortunately, no one can be told what’s in there, you have to see it for yourself.

Or, the story ends, you wake up in your bed…

Why should you use bitcoin?

Here’s why you would want to get your hands on some bitcoin and start using it now, while its fate is still uncertain:

Use bitcoin if you don’t like being told what you can and can’t do with your money.

Use bitcoin if you don’t like being told who and where you can send your money to.

Use bitcoin if you like the idea of being able to use services online without having to reveal your personal information or email.

Use bitcoin if you don’t like buying stuff and having to trust the merchant to keep your credit card information safe.

Use bitcoin if you think it is silly that a merchant can charge your credit card the wrong amount, or accidentally double charge, or worse.

Use bitcoin if you like the idea that nobody, for any reason, justified or not, can freeze or confiscate your assets.

Use bitcoin if you don’t like paying large fees when transferring money.

Use bitcoin if you are saving money for your retirement. Unlike government money it isn’t guaranteed to lose 95% or more of its value in your lifetime.

Use bitcoin if you want to help make sure it survives the battle with Visa, Western Union, JP Morgan, HSBC and friends.

Use bitcoin if you want to always have access to your money no matter where you are on earth.

Use bitcoin if you feel government has a bit too much power or abuses it. Take some of that power back into your own hands. If government currency has less of a monopoly, government can’t just print more money whenever it wants to, to pay for things citizens don’t agree with.

Use bitcoin if you want choice. Don’t let it die from neglect.

Use bitcoin if your life savings are all pegged to your government’s currency. Don’t keep your eggs all in one basket. Or buy some gold.

— Odi

Thoughts about what bitcoin is

Here are some not very organized thoughts about Bitcoin that won’t fit in tweets, but that I think are food for thought still worth publishing.

What is Bitcoin? It is the world’s most secure and fair way for storing and exchanging value.

Think about the money you make and any wealth you accumulate. Is it safe from bank fees, restrictions of various kinds, safe from being taken away from you unfairly by the government (not counting income taxes and sales taxes and other everyday government policies we typically participate in), being stolen by thieves, lost by bank errors, accidents, taken by unfair court order, seized, etc?

Bitcoin is like “the Internet of money”. It cannot be stopped, it is worldwide, it has real value, and it is not controlled by one or more governments and manipulated by banks, the nobility, politicians, intelligence agencies, organized crime, etc. It is a breakthrough in mathematics and computer science, and builds upon other amazing breakthroughs like public-key cryptography and peer-to-peer networking protocols.

Think of bitcoin as a new possession/wealth recognition system. There are 4 such systems I can think of today not including bitcoin:

  1. Fiat currency, which means money that is issued by government and also legal tender, which means legally it must be accepted by the citizens of the country for exchanging goods/services. This is what you get paid with by your employer, this is what you have in your wallet, bank account, etc. Every country uses one or more. The Euro, US$, Yen, Rupiahs, etc.
  2. Deeds to properties/land. You have one of these, it is recognized by your country and citizens, and this way everyone knows you own something. Of course, if your country is invaded, the invaders can ignore this.
  3. Legal agreements, promise documents, verbal promises to pay back, etc. between people.
  4. Precious metals.

Much of the above can fall apart when everything isn’t smoothly running.

Bitcoin is a new, 5th possession/wealth recognition system, not based on trust, but rather, mathematics and encryption (under the covers, you don’t need to know how it works) to assign value to you (in “bitcoins”). That value assigned to you cannot be taken from you by anyone. Governments, intelligence agencies, thieves, etc. When you send bitcoin to someone, the operation cannot be reversed. There are no banks involved, no fees necessary to make transactions, and your bitcoins exist worldwide as long as the internet exists. If you keep your private key in your mind, then only torture can extract it. Torture, blackmail, or a compromised device (such as a compromised Android phone you enter your private keys into).

With bitcoin, your wealth is not hanging by a thread which can be easily cut by the whim of courts, governments, thieves, banks, etc. It is international, it doesn’t depend on the value of the $US dollar, or the stability of a few countries. Solid stuff.

You can think of bitcoin as “digital gold”. Its value is based on supply/demand (purely, because supply cannot be manipulated artificially, like a country “printing more money” as needed). Gold, but with all the advantages of being digital… speed, micro-transactions, security, etc.

Revisited: Larger iPhone @ 264 PPI

Perhaps Apple could call a larger iPhone “Retina” even if it was “only” 264 PPI. The problem with a 264 PPI display is that it seems to be a dead-end resolution. There’s no obvious upgrade path for that display. The iPad mini, introduced at a relatively low 163 PPI,  does have an upgrade path: Apple just has to move it to the standard 326 PPI display resolution.

Yes, Apple can have a 264 PPI product while others are in the 300+ range, because when all is said and done, the only thing that matters is if that 264 PPI display is beautiful enough, on an absolute scale (or relative to iPhone 5) to be able to stay there for a good while.

So, I now believe, Apple will have given the 264 PPI 4.9″ display a trial run on some prototype devices, and if it looked superb despite the lower number PPI, that would be grounds to make the appropriate compromise (lower PPI, but easier for developers) and release at 264 PPI. If it doesn’t look superb, then they’ll go to my previously predicted 326 PPI and force developers to do more work.

[Edit Feb. 22 2014: Competitors are announcing smartphones with 500-600 PPI screens, and while it seems to be overkill, they’re still doing it. Perhaps it is just another form of the “megapixel race” camera manufacturers participate in, but still, we’ll have to see these screens before dismissing them outright as “marketing”.]

My take on the larger iPhone’s resolution

My favorite Apple bloggers (DF, RR, MA) seem to have come to a consensus on what they think a larger iPhone’s screen size and resolution would be. Their money is on 4.94″ @ 264PPI with the same 1136×640 resolution of the iPhone 5.

The argument looks good because this has a lot of similarities with what Apple did with the iPad mini. The iPad mini has the same resolution as an iPad 2, but with 163PPI instead of 132PPI. The touch targets on the iPad mini still work because they are exactly the same size as those of the iPhone’s. It is great because apps run as-is on an iPad mini. Developers have nothing to do.

But the iPad mini’s 163PPI has a clear upgrade path: good old 326 PPI retina. Super obvious.

However, a 4.94″ @ 264 PPI iPhone would be a dead-end. There’s nowhere for it to go but 528 PPI, which is overkill even by skate-to-where-the-puck-will-be standards. Furthermore, a 4.94″ @ 264PPI iPhone with a resolution of 1136 x 640 would not be retina. It also wouldn’t be competitive. That’s 3 important negatives right there.

Consider a 5.0″ iPhone at 1420×800 though. That’s exactly 326PPI. It happens to be 1.25X the iPhone 5’s resolution in each dimension. Same aspect ratio. If bezels get thinner, this size seems to make more sense. Here are the considerations:

– It is retina. It won’t need to get any better.
– It is a competitive resolution.
– It uses the same panels as the iPhone 5.

The downside I read that is being argued, is that apps need to be modified to use this new resolution. Well, guess what, we iPhone devs already have to support 1136×640 in addition to 960×640. That means we’re already trained for arbitrary extra rows of pixels. Having one more of those (with extra rows and columns) isn’t that much worse. It might be a good idea for us devs to take one for the team, to avoid our apps being letterboxed on the larger iPhone.

I’m going to go out on a limb and put my money on a nice-sounding 5.0″ @ 326PPI retina display larger iPhone :)

Windows 8 is not the long bet, it’s Windows RT

Today’s post on Daring Fireball, Windows 8 as a Long Bet, seems to have missed something important.

“But why put the touch/tablet UI on all PCs? A touch-optimized UI makes no more sense for a non-touch desktop than a desktop UI makes for a tablet. Apple has it right: a touch UI for touch devices, a pointer UI for pointer (trackpad, mouse) devices. Windows 8 strikes me as driven by dogma — “one Windows, everywhere.”

This is all right, and yet all wrong. If you read it with Windows 8 Pro in mind, which many consider to be a train wreck combination of two different environments, then yes, the above should make sense. But not if you read it with Windows RT in mind.

Think about this: What can iOS do and not do? What can Windows RT do and not do?

They are both “Post PC” operating systems. They are super simple to use, they only run apps from an app store, they don’t need drivers, and they have a touch-optimized UI that makes perfect sense on a multi-touch tablet. They have a lot in common, but there’s a huge difference that is missed in the quoted text above. Windows RT and its 3rd-party apps are touch-optimized, but are also aware of the presence or potential presence of a mouse pointer, and they can work with pointer input and with a keyboard without relying on touch gestures at all. So…

What can iOS do and not do? Easy. It can run any kind of app you can imagine. But these apps are almost universally built for touch. Not all apps can be redesigned to be as comfortable or efficient with touch as they were with mouse pointer input.

Touch can be as precise as mouse pointer input, but in different ways. The initial touch is never very precise. Apps like Photoshop will not work on iOS – their UI must be designed differently. But even redesigned, they may never be as efficient. Apps like development environments or desktop publishing will also need to be rethought, but may also never work as well. iOS requires a lot of back and forth between a keyboard (on-screen or not) and the screen – so that screen tends to need to be horizontal. Who wants to lift their hand up to a vertical screen, even if occasionally. It’s just awkward.

Installing iOS on a desktop PC would never make sense, touch screen or not. So what can’t iOS do? Let users comfortably use applications that work best with mouse pointer input. If a user isn’t efficient and comfortable, the app is a failure. This means that OS X has it’s place for the moment, until the “Back To The Mac” concept reaches revolutionary new heights.

What can Windows RT do and not do? Windows RT is like iOS. Touch input is a first class citizen, and everything from OS to apps, are built for that. The one exception is Office,  which is why there’s a bastard remnant desktop mode that will hopefully disappear once Office goes native.

Installing Windows RT on a desktop PC, however, can make perfect sense, touch screen or no touch screen. Windows RT and all its 3rd party apps fully work with mouse and keyboard without requiring even occasional touch gestures. There’s a reason for that (I’ll reveal it at the end of this post). When running on a desktop PC or laptop with a trackpad, Windows RT can handle applications like Photoshop, Visual Studio, Xcode, Final Cut Pro X, you name it. Sure, these apps would have to be rewritten to run in a fully sandboxed environment, but thanks to cloud computing becoming  more pervasive, this is a software problem that’s inevitably going to be solved soon (Apple has the same need on OS X),

Windows RT on a desktop PC makes sense because it doesn’t subject people to needlessly complex operating systems like Windows 8 Pro or the very latest OS X, with all their baggage and complicated UI paradigms, drivers, trojan horses and malware. Yes, even OS X Mountain Lion still doesn’t prevent users from installing things from random sites.

OS X and Windows 8 Pro are still way too geeky for non-techie humans to work easily and comfortably with – but iOS and Windows RT, well, even toddlers and the oldest grandparents can handle those without breaking anything or calling a geek family member for support.

So what can’t Windows RT do? Nothing. It can run on tablets, run any kind of app that iOS can, using touch-only input that works very well, and it can also run as a mouse+keyboard driven operating system on laptops and desktops, and run desktop-class applications that don’t work as well or as comfortably on a touch-only device or operating system.

So let’s deal with that Daring Fireball quote now, piece-by-piece:

But why put the touch/tablet UI on all PCs?

I don’t know why, but I do know that developers that write Modern UI apps are forced to also make their app work with mouse+keyboard – because Windows 8 Pro will be installed on many PCs that don’t have touch input. Like the 27″ iMac I’m using right now running Windows 8 Pro. Also, the more obvious answer, to get desktop and laptop PC users used to the look and feel of Windows RT.

A touch-optimized UI makes no more sense for a non-touch desktop than a desktop UI makes for a tablet.

See now why this doesn’t quite apply? Windows RT is designed to offer a touch-optimized UI when running on tablets, and also a mouse+keyboard optimized UI when running on laptops and desktops. Heck, if the laptop or desktop also has a touch screen, you can use both. But that’s gravy.

Apple has it right: a touch UI for touch devices, a pointer UI for pointer (trackpad, mouse) devices.

It’s right only up to the point when your competitor has a Windows RT descendant everywhere, the exact same OS on both tablets and desktops, that lets users transition from desktop to tablet/mobile with no change in environment.

Users may realize that moving from OS X to iOS is just not as great. Windows 8 Pro and descendants? Who cares, that OS will be forgotten by the consumers (not businesses) once most desktop-class apps like Photoshop and Visual Studio start running on Windows RT or descendants. These mouse-optimized apps may not work on tablets, but that’s not the point, the point is, the rest of the apps you use will.

Microsoft has something special with Windows RT, it’s just not obvious yet because everyone’s focusing on Windows 8 Pro.

The dock connector shrinks, but stays around for the environment?

“[the dock connector is] a fantastic invention… so fantastic that, even after ten years, Apple has no reason to abandon it. The only thing they need to do to keep the Dock Connector relevant is slim it down by ditching the pins no one needs anymore. And once Apple does that with the iPhone 5, expect the new, slimmer, 19-Pin Apple Dock Connector to last another ten years… until we finally ditch tethering our iDevices to other gadgets once and for all.

This is the conclusion in this pretty detailed article.

Well, I guess (once again), I’m thinking too far ahead. In my mind (and in this post), the time was supposed to be now. I’m going to owe some colleagues some beer. I had bet them that the dock connector was not going to be for data anymore. Just power.

Okay, 7.85″ it is

It has been a while since I published this post about the difference between a 7″ ‘iPad’ and a 7.85″ ‘iPad’.

However, since then, I’ve heard lots of convincing arguments that Apple is working on a device with a 7.85″ screen, which implies it would run iPad applications and would therefore be an “iPad mini” and not an “iPod maxi”.

This post on Daring Fireball was the final nail in the coffin, I’m convinced now. Check it out.

Another good reason is that I remembered that Steve Jobs (and therefore Apple) believes the greater invention is not the iPhone, but the iPad. Along those lines, I’d also subscribe to “iPad mini” vs. “iPod maxi”.

The difference between 7″ and 7.85″ is everything

Here’s why I think there will be a tablet from Apple that’s optimized for reading and has a 7″ retina display that runs iPhone apps unmodified, not a tablet with a 7.85″ display that runs iPad apps unmodified.

Perhaps you’ve read these Steve Jobs quotes before, they go something like this:

The 7-inch form factor is not a good size for tablet applications” and “7-inch tablets should come with sandpaper, so that users can file down their fingers so they can use them.

Note the words in bold.

Every rumor and theory about a smaller iPad I have seen seems to claim it will be 7.85″ with a 1024×768 screen. If that were the case, Steve Jobs would be right on the money with the above quotes. A 7.85″ 1024×768 display would be appropriate if the smaller tablet were designed to run iPad applications, because these applications could run unscaled on the device, at a 1:1 pixel ratio. However, the PPI of that 7.85″ screen would be 163. But the size of the user interface elements on iPad applications are tailored for a 132 PPI screen. If squeezed into 163 PPI, every button and control would become smaller, harder to accurately touch. Hence the need for sandpaper.

The same argument applies if the 7.85″ tablet had a retina display with the same resolution as the new iPad’s 2048×1536. It would have 326 PPI, but the UI elements of retina iPad applications are designed for 264 PPI. Sandpaper required.

But consider if the new tablet had a 7″ screen. What’s so special about 7″? A couple of very interesting things.

A 7″ diagonal screen (7.08″ to be exact) just happens to be the exact size of two by two iPod touch retina displays. That’s a 4″ x 6″ display surface. An iPod touch screen has 326 PPI. The 7″ screen would also have 326 PPI just like iPhones and iPods. This would yield a resolution of 1920 x 1280. This resolution would be able to run current retina iPhone applications pixel perfect using the traditional 4:1 pixel scaling, like retina displays do with non-retina apps.

What’s so special about that? By running iPhone applications on a larger screen, as opposed to running iPad applications on a smaller screen, you don’t need the sandpaper anymore. Heck, if you have fat fingers, you’ll rejoice. Larger touch targets are just easier to hit, but still look amazing, especially text, which will be drawn using the full 1920 x 1280 resolution. Anyone that finds the iPod touch or iPhone screen slightly cramped would love it, and could continue to enjoy amazing apps like iMovie, iPhoto, and other apps designed for iPhone.

So a 7″ tablet wouldn’t be an “iPad mini”, it would actually be more like an “iPod maxi”. But that’s getting ahead of ourselves. A 7″ or 7.85″ tablet still has to have a clear purpose. To be able to do something far better than the smaller devices (iPod touch and iPhone) and far better than larger devices (the iPads).

The answer is: reading, and long “consumption” sessions. Reading is something that is not comfortably done on an iPad, compared to a dedicated e-reader like a Kindle. That’s because it is relatively very heavy (over 600 grams), and too large. The new iPad is even heavier. You can’t hold these up comfortably. They are also rather expensive, starting at $400, compared to a dedicated e-reader. That’s why my friends with iPads that like reading also bought and use a Kindle. Reading is also cumbersome on an iPod and iPhone, because they are just too cramped and tiny. For comfortable reading, you need a device that’s not more than 400 grams (determined by reading reviews of various e-readers), with a long lasting battery, a screen more tailored to reading than other iOS devices, and it has to be more affordable than an iPad.

The Apple “e-reader” I’m about to describe wouldn’t just be a great, inexpensive and sufficiently light reading device with a color retina display, it would also be a full iOS device capable of beautifully running iPhone apps.

An iPod touch costs $200. It is 0.28″ thick (7.2mm). It weighs 105 grams. If you think of a 7″ iOS “reader” device that is essentially 4 iPod touches put together in 2 x 2 formation, this device would end up being about 0.29″ thick (7.5mm), weigh 350g, and beautifully run retina iPhone apps unmodified using a perfect 4:1 pixel ratio. It would be slightly thicker for structural strength and extra battery space. It wouldn’t cost $800 because you don’t need 4 times the electronics.  It would have more battery life than an iPod touch thanks to far more battery space. It would also weigh less than 4 iPod touches because not everything is multiplied by 4. Cost? I’d say $250 because the larger 1920×1280 display would cost slightly more, even if it would be iPod touch quality (inferior to iPhone or iPad display quality) and Apple factories are already perfectly tooled to make 326 PPI iPod-quality displays.

Apple would also optimize the display for “reading”, meaning, applying anti-reflection, more precise dimming and other technologies to it that it normally wouldn’t need or desire for iPods, iPhones or iPads. Yet iPhone apps would still run nicely on it, making it far more multi-purpose than a mere Kindle with e-ink, even if still not as awesome for reading in bright daylight.

E-readers are a nice market segment exploited by Amazon, wide open for Apple to expand into and dominate with iOS.


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