Jean-Paul Delahaye, professor emeritus of computer science at the University of Lille, regularly publishes articles on mathematics and computer science in popular journals. He is thus very comfortable presenting in an accessible manner, for the non-specialist, subjects as difficult as hash functions, proofs of work, blockchains, and other complex subjects associated with modern celebrities continue to discuss the subject of bitcoin with optimism.
He is also intimately acquainted with the fields of mathematics and computer science, as opposed to the current trend of researchers who are increasingly specialized in a very narrow area of their discipline. I do not know Delahaye personally, but I have corresponded with him in relation to his publications.
I have also expressed my astonishment at his facility with so many subjects and the frequency with which he publishes, while I struggle to write when it is a matter of popularizing my own research topics.
He replied that it entertained him! However, if it is meant to say nearly everything about bitcoin, there are still a few aspects that should be deepened. For this reason, I will discuss it first. Initially, bitcoin was, for me, a mysterious currency that was sometimes the subject of articles in the national press about its volatility when converted into dollars or euros, or its possible use as a means of financial evasion for the Chinese. Curious as to whether this impression was merely my own private view, I took a mini-survey among a few friends at universities in different countries.
That is, with the exception of a young computer science lecturer, a member of my immediate family: It has already tripled since I bought it. By buying them, or by mining them? From an economic point of celebrities continue to discuss the subject of bitcoin with optimism, before one can reflect upon on the bitcoin phenomenon, or any one of the seven hundred cryptographic currencies created since then, it seems necessary to return to the definition of what a currency is.
Although it is difficult to pinpoint the date at which the first currencies appeared, it is believed that they arose along with the development of trade and the emergence of commerce.
In this case, product C must have an intrinsic value, and this value must persist over time in a stable manner. Metals, which were relatively rare in antiquity, offer these necessary qualities. Imagine, for example, a transaction taking place in Mesopotamia more than four and a half thousand years before the kingdom of Akkad. Nidaba the goddess of the harvest would like to buy a sheep A from Sumuqan the god of animals who possesses a herd.
She gives him a nugget of native copper C in exchange for the sheep. A few months later, after the harvest, Sumuqan buys a certain quantity of barley B from Nidaba by giving her back this nugget C. In this imaginary case, as in the actual case of the coins that appeared later in antiquity, the material of exchange remains almost unchanged for years.
No cost is induced by maintaining this means of payment over time. The situation changes when, for various reasons—metal shortages in a flourishing economy, fear of appropriations like that of Charles I of England inetc. In thirteenth and fourteenth century China, the Yuan dynasty attempted to impose the exclusive use of paper money. Marco Polo devoted a whole chapter of his Travels to this remarkable innovation, and his statements have been confirmed by research.
The notes were printed on the liber, or inner bark, of the mulberry. Notes that were worn but still legible could be redeemed at face value upon payment of a three percent tax.
Nowadays, for euro coins, maintenance is more significant, since the cost of minting a one or two cent coin is three cents. These coins are easily misplaced and some countries have ceased to manufacture them. To get an idea of this, one must consider manufacturing costs, which are difficult to estimate. Since their introduction ineuro notes have been printed throughout Europe.
The Bank of France continues to produce all of the five, ten, and twenty euro notes printed in France, but it does not report on manufacturing costs. On April 4,a new fifty euro banknote will be put into circulation. Ten billion will be produced at a cost of six hundred million euros, i. Most of these notes have likely already been replaced at least once, since most of them bear the signature of Mario Draghi, who began his tenure as President of the European Central Bank in Thus it appears that the cost of maintaining this means of payment is at least 0.
If the new notes last fifteen years, this is approximately ten times cheaper than during the Yuan dynasty, whose notes used a less abundant natural resource. In the case of bitcoins, their maintenance is not, celebrities continue to discuss the subject of bitcoin with optimism course, linked to manufacturing celebrities continue to discuss the subject of bitcoin with optimism. Rather, it is connected to the considerable electricity requirements for the mining calculations which make it possible to create new bitcoins and for the maintenance of the blockchain by 5, or 6, miners.
The purchase and replacement of dedicated computer equipment is another factor. Delahaye indicates that, if celebrities continue to discuss the subject of bitcoin with optimism turns to an article by Pierre Buntix, the electrical power consumed by the network of miners could become equivalent to that of Denmark by Buntix was, in fact, commenting on a more accurate article by Sebastiaan Deetman that proposes two scenarios: Assuming the optimistic scenario, mining a single bitcoin in will require 5, kilowatt hours and produce four tons of CO 2!
In France, the cost of this amount of electricity including subscription for an individual who would like to start mining is about nine hundred and forty euros, slightly higher than the current bitcoin price.
And yet, as a result of nuclear power generation, electricity prices in France are among the lowest in Europe. The cost considered here is just that of the electricity. It does not take into account the purchase of specific equipment: A possible objection might be that the value of a bitcoin may have quintupled, or even increased tenfold in four years, making their mining a profitable activity.
But it may also be subject to crashes. It ensures its own continued existence and that there will always exist volunteers, the miners, to take care of the bitcoin blockchain and to monitor each other.
In any case, as part of my quest to obtain bitcoins, I consulted the site bitcoin. This site indicates that the preferred method of acquisition is to use the marketplaces.
Indeed, the website warns against the temptation to become a miner:. But, if this activity is not profitable for an individual, it may be of interest, for other reasons, to multinationals or nation states. There are, at most, sixteen million bitcoins in circulation.
Let us suppose that this currency is recognized as reliable, as seems to be the case, according to Delahaye. As the author of the original bitcoin paper is still not known and the mining software is free, there is nothing to prevent a nation state from duplicating this currency a significant number of times without even seeking to improve the system as the other cryptocurrencies have done.
We would then have: The United States, for example, could then resort to these bitcoin i to secure, or to discreetly move, their debt from country to country. It is therefore understandable that the adoption of one or more cryptocurrencies to replace existing currencies, under the present conditions of operation in the global computer park, will not be easily achievable.
More important than the uncertain future of the bitcoin is the celebrities continue to discuss the subject of bitcoin with optimism of blockchains which, according to Delahaye, can be used for other applications such as secure voting, provably fair online games, property contracts, etc These applications will come up against the barriers of available energy, a barrier that will become higher and higher, and eventually impassable, with the depletion of fossil fuel resources.
This aspect is, of course, taken into account by Delahaye, who sees the variants of the Nakamoto protocol as tweaking the principle of the blockchain according to protocols which avoid the serious problems posed by energy-expensive mining.
These variants are based on limiting the number of miners, leading to private or semi-private blockchains: In flagrant contradiction to the lofty aim of democratic practice is the appropriation of the network by a large number of people with no other link than membership in a network of miners, and the restricted membership of this network.
In any case, the difficulty of becoming a miner, as a result of the extremely high investment and operating costs, does, in fact, lead to the emergence of a community of unknown bitcoin miners, which could turn out to be members of government agencies which is celebrities continue to discuss the subject of bitcoin with optimism the case for many groups of hackersmultinationals, or mafia networks.
There is a practical risk that the network will become far removed from any democratic ideal. This situation is reminiscent of the emergence of free, or pirate, radio and CB radio during the s and from onwards in France following the end of the state monopoly.
Celebrities continue to discuss the subject of bitcoin with optimism most profitable of these rapidly became commercial radio stations controlled by financial groups. Two of them may seem anecdotal in view of my remarks thus far. I will consider them before concluding this letter with a few computing and mathematical aspects that a reader who might not wish to enter into technicalities may safely ignore. First of all, many currencies possess subunits. The euro has the cent, or centime.
The dollar has the cent—five cent coins are called nickels, ten cent coins are dimes, and twenty-five cent coins are quarters—and so on. As in classic currencies, there is a subunit of the bitcoin that Delahaye does not mention. This is the satoshi, named in communal homage after Satoshi Nakamoto, our mysterious inventor, and a topic to which I shall return shortly. The satoshi has an extremely low value.
It takes one hundred million satoshi to make a single bitcoin! A satoshi is therefore currently worth about 0. What is the point of such a small subunit, which seems unusual for a currency? Do its creators think that the value of the bitcoin will soar to the degree that a satoshi will be equivalent to one or more euro cents in a few years time? On the contrary, inflation could lead to devaluation of the currency. There are, however, real world situations in which notes are issued with a high face value to buy current assets.
This example shows that what may seem strange at first sight is sometimes not as strange as certain real world situations. The second question is related to the creation of bitcoin by an unknown person hiding behind the Satoshi Nakamoto pseudonym.
Despite much research, no one knows who he is, or even whether he is still alive. It also not known whether the celebrities continue to discuss the subject of bitcoin with optimism he possesses still exist. Why behave this way? Has there ever been an example of a widely disseminated scientific publication whose true author is unknown? He managed to create financial value from the scientific idea of a blockchain without patenting it and without significant investment since mining the first bitcoins was easy by applying it to the creation of the bitcoin.
His anonymity assures his safety and that of his fortune, which has been valued at eight hundred million euros, without needing to pay for any form of physical protection. This need for security could explain why he has preserved his anonymity, while avoiding the celebrity that he would undoubtedly acquire, and that some have tried to appropriate by pretending to be him.
His disappearance, or other unknown motivations, may also explain the continuation of this anonymity. But, curiously, his example is not unique. Consider the case of Nicolas Bourbaki: This did not prevent its publications from exerting a strong influence on the mathematical community, even into the s.
I would have liked to see Delahaye consider this parallel in his article, and perhaps other, similar examples. The appearance of bitcoin has not only triggered attempts at speculation, it has also engendered celebrities continue to discuss the subject of bitcoin with optimism immense amount of reflection across a number of fields.
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