[Cryptography] What has Bitcoin achieved?

[Jerry Leichter]

On Jun 4, 2014, at 7:20 AM, ianG <iang at iang.org> wrote:
> Cash issued by anyone except the government is beyond most people's
> minds, but it works and exists, it has existed for a long time, and you
> don't have to go far to find it....
You're taking a remarkably ahistorical view.  In the US, the power to create coinage (out of materials that carried their own value - silver and gold) was restricted to the Federal government, but states and many banks issued their own paper currency until after the Civil war.  At least in the US, we've all grown up in a world where for several generations the only practical difference between paper money and coinage is that the latter had small face value.  This was not previously the case, and may or may not be the case in different places and times.

Credit cards had a long and complex history, starting out as something the wealthy (who were used to dealing with banks and credit) and only become a mass market, nationwide item in 1966.  People didn't understand or trust credit cards at first and it took significant marketing efforts to get people to see them as "just like cash".  (The limits on liability when cards are lost or stolen were actually made into law at the bank's request, as a way of gaining trust.)

"Money" is a concept we've not only internalized, but given an internal deep semantics.  There are some neat behavioral economics experiments that show how our reasoning about "money" can be quite different from our reasoning about goods of equivalent value.  But we can, and do, extend our notion of "money" as times change.  We can't encompass *anything* within our internal "money" concept, but the concept is pretty broad.

It's only we engineers who think that an idea isn't acceptable until its internal features are understood.  Most people have no clue how credit cards actually work.  If you push them, they have no idea how paper money actually works.  They know how to *use* them - i.e., they know the API's - but the implementation is something left to someone else.  I see no reason to believe that Bitcoin, if provided with a suitable interface, wouldn't easily fit into most people's conception of "money".  (And if you think that the instability of the value will stop people ... consider all the long, sad history of hyperinflation.  Sure, when they can get it, people prefer a stable currency - but they manage to deal with unstable ones quite well if necessary.)

                                                        -- Jerry

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