Some thoughts on Bitcoin

When it comes to the topic of Bitcoin there are lots of opinions and even more opinions that claim to be the right ones.

I will take myself a more humble approach and try to explain what I think and why I think it and how this led me to my current of affairs with respect to bitcoin.

The short story is: I ignored it, I studied it, I bought, I sold, I won money, I lost money.

The long story goes like this:

I ignored

I knew of the existence of Bitcoin, mostly from HackerNews, but I didn't really take it serious. There's nothing more to say other than I began interesting myself when the price was above a few dollars (more like ~ 100$).
This was not so much because I wanted to gamble or I felt left out but rather because I tend to think "If people bet money on it, there could be something to it".
This is not to say that there is always something to it and it depends to a great deal who is smarter: you or those people? In any case, I could not afford an opinion at that time because I basically knew nothing. Since bitcoin is quite a libertarian project, I thought that I should know about this and while I'm at it, also know enough to either bet for or against it. (As a side note, I believe this is the only way of knowing whether an opinion is serious, ask the issuer of the opinion to bet on it)
Furthermore, IT is one of my strength's so I suppose I'll have a clearer view on the things and have an advantage, at least when compared to mainstream (i.e., dumb) money.

I studied

So, equipped with some Mathematical understanding and a good knowledge of Game Theory (which I think is the fundamental theory to understand economics, politics and evolution) I took the white paper of Satoshi Nakamoto and read it a few times. I remember that it took me approximately a week from first reading the paper to actually taking a decision.

My main concerns were:

• Cui bono? (Why should anyone invest? Are there other entities who benefit other than holders of BTC?)
• What are the IT risks (What if the software has a bug or a weakness? What if the network is partitioned? What if it turns out that you need to change an aspect of the protocol?)
• Who would dislike bitcoin? (governments, banks, ISIS, North Korea, the NSA, ... you get the picture)
• How resilient is bitcoin? (What can dislikers do against it?)

The short answers are:

• You invest because the number of bitcoins is fixed. Only holders of bitcoin benefit from your investing.
• Whatever is necessary can be decided by entities either holding bitcoin or investing big money in order to obtain bitcoin.
• Well, I am not yet 100% sure of this answer. I suppose the biggest dislikers are those who feel they have something to lose. Initially, these were entities that issue money (Central Banks and indirectly governments). Hackers actually don't dislike Bitcoin because after, e.g., stealing a few coins, they want to keep the system in place in order to sell them. Think of it this way: It was never so easy to directly steal money via the internetz.
• It turns out Bitcoin is quite resilient because it spans the globe and even when forbidding it in every single country of the world it will live on just as crime and drugs do. So unless one switches off the internet forever, it's kind of hard to effectively get rid of it.

 Of course, there's much more to say but I will get into detail only later on after I finished the complete story.