[142207] in cryptography@c2.net mail archive

home help back first fref pref prev next nref lref last post

Re: Bitcoin v0.1 released

daemon@ATHENA.MIT.EDU ("Hal Finney")
Sun Jan 11 13:22:01 2009

To: satoshi@vistomail.com
Cc: bitcoin-list@lists.sourceforge.net, cryptography@metzdowd.com
Date: Sat, 10 Jan 2009 18:22:01 -0800 (PST)
From: hal@finney.org ("Hal Finney")

Satoshi Nakamoto writes:
> Announcing the first release of Bitcoin, a new electronic cash
> system that uses a peer-to-peer network to prevent double-spending.
> It's completely decentralized with no server or central authority.
> See bitcoin.org for screenshots.
> Download link:
> http://downloads.sourceforge.net/bitcoin/bitcoin-0.1.0.rar

Congratulations to Satoshi on this first alpha release.  I am looking
forward to trying it out.

> Total circulation will be 21,000,000 coins.  It'll be distributed
> to network nodes when they make blocks, with the amount cut in half
> every 4 years.
> first 4 years: 10,500,000 coins
> next 4 years: 5,250,000 coins
> next 4 years: 2,625,000 coins
> next 4 years: 1,312,500 coins
> etc...

It's interesting that the system can be configured to only allow a
certain maximum number of coins ever to be generated. I guess the
idea is that the amount of work needed to generate a new coin will
become more difficult as time goes on.

One immediate problem with any new currency is how to value it. Even
ignoring the practical problem that virtually no one will accept it
at first, there is still a difficulty in coming up with a reasonable
argument in favor of a particular non-zero value for the coins.

As an amusing thought experiment, imagine that Bitcoin is successful and
becomes the dominant payment system in use throughout the world.  Then the
total value of the currency should be equal to the total value of all
the wealth in the world. Current estimates of total worldwide household
wealth that I have found range from $100 trillion to $300 trillion. With
20 million coins, that gives each coin a value of about $10 million.

So the possibility of generating coins today with a few cents of compute
time may be quite a good bet, with a payoff of something like 100 million
to 1! Even if the odds of Bitcoin succeeding to this degree are slim,
are they really 100 million to one against? Something to think about...


The Cryptography Mailing List
Unsubscribe by sending "unsubscribe cryptography" to majordomo@metzdowd.com

home help back first fref pref prev next nref lref last post