Bitcoin, altcoins and the virtual economy

I've been closely following the Bitcoin phenomenon for some months, loosely for some years now. Disclaimer: I am no fan of Bitcoin, for one reason only, that I will disclose at the end of the post.

First of all, despite the previous disclaimer, let me clarify that Bitcoin is a hughe phenomenon, a true technical breaktrhough that could have only been invented by a true mastermind. One only needs to read Satoshi Nakamoto's paper to see that (and I am not going to deal with the origin or what the intentions of this Bourbaki of the cryptoeconomy might be).

Having said that, I see important flaws in using Bitcoin as a means of online payment (this does not apply to hand-to-hand business): It's reversability. Bitcoin is non-reversible by design, so that if you receive goods that are broken, are not as described, or any other usual (really, really common) problems that you may encounter when buying goods online, you are left all alone. Granted we would have the opposite problem if it was freely reversible: rogue buyers would reverse payments once goods left sellers' facilities. This leaves nothing but the classical third party arbitrage, some kind of escrow system. In case of the current Bitcoin system, imagine that you buy something on AliExpress. People who have will know what I mean. AliExpress is kind of a Chinese ebay, but only direct selling, no auctions. Chinese vendors sell their product, the same (crappy or not) that you can find in your large retailer chain, but for much less. Buy something cheap, receive it at home within 15-60 days. This sounds great, but you need to account for a lot of problems inherent to that scheme: Firstly, you need to know that AliExpress escrow system is worried only about products reaching their destination. Once you get your item, AliExpress urges you to verify that you received it. If you get something broken, they do not automatically honor their returns policy, but involve you in an extenuating, long, and in most cases, infructiferous process of getting your money back. In that case, you totally depend on the seller. Even if the seller has a good reputation, you need to deal with China post (or your local post office for that matter):

Imagine, for a moment, that you buy a nice Xiaomi Red Rice, customized, banded Android, quad core cell phone from a Chinese seller for about USD 200 in Bitcoin.  It was maybe the seller, or maybe China Post, but the cellphone is broken. You depend on the seller's good will more than buying in AliExpress (and that is a lot to say) since he has to send you the funds willingly. You cannot revert the transaction. If you do this operation with a VISA credit card, it takes a call to your bank or to VISA to have it cancelled. And when you get your package from the mailman with all the illustion only to find out that you got a brick, having the possibility of reverting the transaction is, as Mastercard says, priceless.

This is a major problem for transactions in Bitcoin. But it is not the main problem to become a de facto payment system (de iure, governments could outright forbid its use). The main problem is its duplicability. In fact, Litecoin is already an accepted system, as much as Bitcoin is. There is a large number of so-called altcoins (even scam-coins). They are all (except some details such as encryption used) equivalent. So we have a problem of unicity. In case of gold, it is only the 79-th element in the periodic table, it is the only element that provides desirable properties of money. None other is gold. Bitcoin can be duplicated to give the exact service or better. The fact that it was the first coin with this system does not give it more desirable monetary properties. They can be collectionism properties, or something else, and it has certainly value, but they are not monetary at all.

If I have made such an attack on Bitcoin (and altcoin), then why do I say that it is a revolutionary idea? Because this can be the money of the future provided: an escrow system (banks that might charge for that, it is a service after all) and laws designating any of the altcoins as the one to use, grating one system unicity and yielding all properties of money. Absent that, Bitcoin, or any other alt-coin, is a tulip, with only the people's desire to have this or that coin as the only driver of value (or is it prive in USD?).

The truth about Jack Andraka

The truth about Jack Andraka is... that I don't know it, obviously, I am a normal citizent with my mundane whereabouts and I am geographically far away from that character.

But what I can do is using my analytical-logical mind to check his story. In my analysis I will use some insights from this interesting blog entry where some good points are made.

The first thing that catched my eye was his sotry. He is able to outthink the pharmaceutical industry with Wikipedia and some books. He is able to produce a device that is super cheap and is much more accurate than the industry's standard, single-handed. Yet he didn't knew [sic] that we had a pancreas before his uncle died.

This in itself is very fishy. Before delving into the story, let me say something: I know brilliant guys, like 150-160 IC (Intellectual Coefficient) or much more, I don't know exactly, but I know a guy who belongs to the 0.01% of most intelligent people on Earth (he holds several full professorships). This guy, being a genious, got several PhDs and several international recognized awards, and he truly speaks about what he does (dealing with quantum mechanics, Banach spaces, number theory...), his conversations are high standard, and he is respected by equally-brilliant people. This does not happen with Andraka, nobody in medical biochemistry/medicine is seen chatting with him, nor are companies that could potentially produce his gadget.

Let's research a little more about this character. There is a ton of videos, newstories, TED talks, and other material such as an official page and a Wikipedia page.

Let's see his wikipedia page: It looks really professional, with references put where they belong. Yet, if one is so careful about checking them, they turn out to be inconclusive about what they are takin about. There is one that speaks about a patent supposedly filed by Intel (who allegedly was backing him) and the reference is a piece of news by the BBC (the people who live ahead in time and were able to report on bulding 7 collapse before it happened) with no mention of the patent whatsoever.

Now, let's analyze the invention itself: It claims to do a much better job costing about three dollars. Now, first logical problem: if it is so cheap and effective, how come that it is not being used already in all hospitals in the world? Either you are a very bad person for not sharing right away (people could be saved if tested TODAY, after all) or the invention just does not exist. Assuming it exists (and therefore he is evil for not sharing), how did this character build it from his garage? I don't see any "Carbon nanotube integrator" on Ebay, nor I see "Pancreatic cancer pacient blood - 100 milliliters".

There is no research paper. So much for being in the Johns Hopkins working surrounded by researchers. When something is revolutionary it spreads like wind, and this alleged invention has not been replicated up to today. He was awarded a prize for this, yet this invention is kept private. A prize that offers no public access to the product if was awarded is no prize (ohh, let's remember that he is preaching open access now). Some sources claim the guy has ALREADY invented the thing (yet it is not available and almost a couple of years have passed) and they justify the prizes with it, while others say that it is not available and still in development (in which case the prizes are non-sense because it is a promise instead of a product).

TED Talks: A ton of them. He never discloses any technical details, he never speaks about science. Somebody who has invented something cannot stop talking about the inners of his creation. He just does not do that. He rants about how modern medicine is wrong (even though our life expectation as steadily increased in part thanks to it), and how adults are just obtuse (yeah wonderboy). The rant is complemented with shots of people nodding and smiling, as if they were part of something bigger, a happy community, a religious event. They are not offered a technical explanation, not even scientific proof, and they smile. Like sheep to the slaughterhouse.

Johns Hopkins: He was allegedgly turned down from 199 universities and at the round number 200 he was granted... I don't know, being there. It looks like even the Johns Hopkins university does not know what he does in the The Sidney Kimmel Comprehensive Cancer Center, where there is no evidence of his presence, apart from the same press releases you can find in Google. Were and when institutions are proud of having a genious, they would grant him an offical place, within an official group. This are done that way, look for Terence Tao in UCLA, a true genious.

Let's see his Facebook page. It is a Zen-temple where all the incautious pancreating cancer patients or relatives crawl around (and I say this with no disrespect for them), along with his I-dunno-understand-nothing fanboys. He is blogging everyday, posting stuff like a community manager, avoiding science questions. He posts pictures of him traveling around the world, meeting dignataries, visiting places... Ohh my God, Jack, you are so popular, when do you have time to get your research done?

Lastly, upon closing this post, I sumbled upon this shit page, where everything goes crazy and they evey say he conducted the research at the Johns Hopkins. They even say the kid won a math pize????? Everything goes now.

I'll finish off by quoting the blog I mentioned:

But the strongest evidence of my suspicions came from when I actually got to talk to him over Facebook.  I tried to discuss science with him, but all he would do was redirect me to some science news website and conveniently avoid discussing anything original.  All he did was mention his friends' ideas.  Also, he got into an argument about global warming with me and a couple of other people, and it showed how narrow minded he was, that he would insist that "global warming is scientifically proven"

If you laugh at people who believe in this

 

 

...in this...

 

... or this ...

  

Why do you believe in everything on the Internet without a logic check before?