What Does AI Think About Bitcoin?

Original article was published on Artificial Intelligence on Medium

The text generated for the bulk of this post will be produced by GPT-2 with just some short lead-in text to help get it started in a (hopefully) suitable direction. Generation for some of this took multiple attempts as I was attempting to avoid the mention of names and grab something that made sense on its own without further context. A handful of minor edits were also made to grammar for readability, but nothing that changes the overall meaning of the response.

What bitcoin does best is highlight the now obvious weakness of the existing financial system which is the tyranny of the central bankers. In 2014 the world’s central bankers created the lowest fiat money supply in history ( viz. Central bank money printing reduces private demand by one-twelfth to one-hundredth of the artificially pumped up fiat money supply) in order to artificially prop up the markets — hence the bust. Let that sink in for a moment. From the heights of having the most stable money system in the history of man — which used to be the gold standard — to this day central bankers have created a system that is killing capital.

What bitcoin is not: “BitCoin” is not yet a fully-featured “currency.” Bitcoins are only fully traded on “Exchange Markets” on exchanges like Mt. Gox and Poloniex. That being said, it may soon take less time than an hour for bitcoins to be exchanged in comparison to the amount of time it takes for you to withdraw your online balance. Not sure about you, but I want to leave my Bitcoins with you for a while. So, what is bitcoin? Bitcoin is simply a new digital commodity being created by a mathematical formula. Think of a stock or a bond. In contrast to these, bitcoins are backed by no government or central bank.

What bitcoin is to me, Altcoin is to you.” and for this, they are in an entire certain community. There is a certain feeling that you can’t do that with USD or with the euro because we don’t have enough faith in the community. There was the heavy US influence that discouraged people from using bitcoin during the bad times, and here we are making the infrastructure, creating trust, re-establishing faith in bitcoin and proving this community can survive and is a big part of the future of bitcoin, and proving that the people who come with ideas are capable of pushing this community forward in ways that we are yet to see in other communities.

The future of bitcoin is positive, but the outlook is bleaker for a large number of other cryptographic currencies. What we saw over the past year was a lot of instability, both in the bitcoin and altcoin markets. There have been huge wild swings in price and supply that led to technical crashes and double-spends. People on both sides of the table went all in trying to get in on the next big thing, but a lot of wild trading and speculation seems to be taking its toll on bitcoin and other coins.

Bitcoin mining is currently nothing more than a hardware game, and it has been for over two years now. Hardware is very expensive, the licensing costs and regulatory costs for mining it are also immense. The vast majority of miners use either GPUs or ASICs, but it would be foolish to do so. A decent GPU mining rig costs about $1,000, and you get the power of a large device, but with far less capability. Just like the Internet was expensive to provide to consumers, you have to ask how much people are willing to pay for an opportunity to mine with computational power. Unless you are actually making a hardware design, you can’t compete on power, but you can compete on efficiency.

Why bitcoin matters to you, the reader. Anything can be a cryptocurrency, the point of this article is not to make a statement about what crypto tokens to buy and what to avoid, but rather what crypto is. Ethereum and bitcoin are the first and foremost examples of crypto, however anything is possible with blockchain technology. Any entity can be decentralised through the use of smart contracts and distributed ledgers. So think of all the different uses that you can imagine with blockchain technology, every business can reinvent itself, use blockchain to create an employee loyalty program or provide over-the-counter financial services and make use of blockchain to participate in peer-to-peer transactions and cheaper transactions.

What bitcoin needs to change on the development side is the tighter integration of safety protocols into the protocol and firm documentation on details of security design decisions. These changes are inevitable once bitcoin continues to scale. There is much that can be done to make bitcoin more secure. While increasing the bar for when non-mining participants can become participants in the Bitcoin economy is encouraging, it is difficult to see how bitcoin can take other steps to increase its security because that requires changes to its protocol, which is fundamentally a set of rules that govern how transactions can be moved through the network. In the interests of security, it is worth emphasizing that the only real security-related functionality of bitcoin is the ability of its participants to trade value.

The best way to store you bitcoin currency is with a safe that is insured. The safest way to store it is with a wallet that is created with a private key that you control. If you want to use bitcoins for something but don’t want your bitcoins to be known, or you don’t want them to be spendable if you disappear without a trace, you need a digital wallet. A digital wallet is a place you store your bitcoin wallet and enable transactions. The reason we have one is to enable bitcoin transactions. A digital wallet is kept safe and can’t be hacked. With a digital wallet, you can keep your bitcoin currency in a safe and prevent it from being stolen. But there are also physical safe to store your bitcoins.

Is bitcoin the future of cryptocurrency? No. Crypto assets, in general, may come and go, but bitcoin is here to stay.