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Which clippings match 'Financial Transactions' keyword pg.1 of 1
22 MARCH 2013

The Rise and Fall of Bitcoin

"In November 1, 2008, a man named Satoshi Nakamoto posted a research paper to an obscure cryptography listserv describing his design for a new digital currency that he called bitcoin. None of the list's veterans had heard of him, and what little information could be gleaned was murky and contradictory. In an online profile, he said he lived in Japan. His email address was from a free German service. Google searches for his name turned up no relevant information; it was clearly a pseudonym. But while Nakamoto himself may have been a puzzle, his creation cracked a problem that had stumped cryptographers for decades. The idea of digital money – convenient and untraceable, liberated from the oversight of governments and banks – had been a hot topic since the birth of the Internet. Cypherpunks, the 1990s movement of libertarian cryptographers, dedicated themselves to the project. Yet every effort to create virtual cash had foundered. Ecash, an anonymous system launched in the early 1990s by cryptographer David Chaum, failed in part because it depended on the existing infrastructures of government and credit card companies. Other proposals followed – bit gold, RPOW, b–money – but none got off the ground.

One of the core challenges of designing a digital currency involves something called the double–spending problem. If a digital dollar is just information, free from the corporeal strictures of paper and metal, what's to prevent people from copying and pasting it as easily as a chunk of text, 'spending' it as many times as they want? The conventional answer involved using a central clearinghouse to keep a real–time ledger of all transactions – ensuring that, if someone spends his last digital dollar, he can't then spend it again. The ledger prevents fraud, but it also requires a trusted third party to administer it.

Bitcoin did away with the third party by publicly distributing the ledger, what Nakamoto called the 'block chain.' Users willing to devote CPU power to running a special piece of software would be called miners and would form a network to maintain the block chain collectively. In the process, they would also generate new currency. Transactions would be broadcast to the network, and computers running the software would compete to solve irreversible cryptographic puzzles that contain data from several transactions. The first miner to solve each puzzle would be awarded 50 new bitcoins, and the associated block of transactions would be added to the chain. The difficulty of each puzzle would increase as the number of miners increased, which would keep production to one block of transactions roughly every 10 minutes. In addition, the size of each block bounty would halve every 210,000 blocks – first from 50 bitcoins to 25, then from 25 to 12.5, and so on. Around the year 2140, the currency would reach its preordained limit of 21 million bitcoins."

(Benjamin Wallace, 23 November 2011, Wired Magazine)



1990s2008anonymous system • b-money • bit gold • bitcoin • block chain • broadcast to the network • chain • clearinghouse • collective interests • collective participation • collective participation technology • corporeal strictures • credit card • cryptographer • cryptographic puzzle • cryptography • currency • cypherpunkDavid Chaumdecentralisation • digital currency • digital dollar • digital money • distribution models • double-spending • financial flowsfinancial transactionsfraudfree market economyglobal capital flowsinformation flowsinformation theoryinfrastructureJapan • ledger • libertarianism • Listservminermining • mining metaphor • P2Ppuzzle • pyramid scheme • RPOW • Satoshi Nakamoto • speculationspeculation and innovation • spending • trustvalue and benefit • virtual cash • Wired (magazine)


Simon Perkins
07 JULY 2012

Neoliberal whizz-kid: Aotearoa New Zealand PM John Key in 1987

"A 1987 video has been unearthed featuring a 25–year–old squash–playing, accountancy graduate John Key. The bright–eyed Mr Key features in an early Close–Up story called Big Dealers. The 'portrait of 80s job du jour: foreign exchange dealer', shows the now Prime Minister in 'the pit' (trading room) as a senior forex dealer. 'Forex dealing is a work hard, play hard world with an image of rich brats who wreck restaurants but always somewhere else,' says the reporter. 'I am not denying that, that has happened and I guess that will happen again in the future but I personally perform in that way,' Mr Key responded."

(Deanna Harris, 02 Sep 2010, MediaWorks TV)



1980s1987 • 3 News • accountancy graduate • Aotearoa New Zealand • Big Dealers (television) • bright-eyed • businesscapital accumulationcapitalismChristchurch • Close-Up (television) • economyfinance • finance industry • financial dealingfinancial flowsfinancial gainfinancial innovationfinancial markets • financial risk • financial transactionsfinancing • foreign exchange • foreign exchange dealer • foreign exchange dealers • forex dealer • forex dealing • free market economyglobal capital flowsglobal financial marketJohn Keylifestyle • MediaWorks TV • money making • neoliberalismNew Zealand on Screen • NZ News • personal financial gain • Prime Ministerprofitrich bratriskrisk-takingsocial conservatism • squash-playing • stock marketstocks • trading room • TV3unit of capital accumulation • whizz-kid • winning • young upwardly-mobile professional • young urban professional • yuppie


Simon Perkins

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