Mining the Bitcoin Innovation

There has been a lot of talk concerning Bitcoins lately. Nobody seems to know really what they are, whether they can be used as real payment, and why (in the case the latter is true) my local grocery stores still don't accept them. Perhaps the most pressing issue is how this even can be legal, since it for all intents and purposes are money being made in your own basement.

Inshort Bitcoin is a peer-to-peer digital currency that is not issued by a central authority. The concept was introduced in a 2008 paper by a pseudonymous developer known only as "Satoshi Nakamoto". Who he really is has not yet been unearthed.

In 2012, The Economist reasoned that Bitcoin has been popular due to "its role in dodgy online markets," and in 2013 the FBI shut down one such market, Silk Road, which allowed the sale of illegal drugs for Bitcoins. So far, seizing the funds have come at no or little success, since the FBI apparently just dont have the knowledge of how to seize electronic currency.

Bitcoins are increasingly also used as payment for legitimate products and services. Notable vendors include Wordpress, OkCupid, Reddit, and Chinese Internet giant Baidu.

The creation of Bitcoins are done by so called "miners". These are computers engaged in the upkeep of the Bitcoin transaction system. However, new Bitcoins are created at an ever-decreasing rate, and once this reaches zero, the number of Bitcoins will remain static. At this point the sole incentive for miners will be the transaction fees.

So why is this important? Well, at the current moment, judging by the rate of transactions and production, the Bitcoin will overtake the USD in amounts used by 2069. That is, by 2069 more people will be trading in BitCoins than in USD. In June of 2013 a single Bitcoin was worth approximately $128.

Still confused concerning Bitcoins? Luckily the Bitcoin community recently released a video explaining the whole situation. Watch and enjoy the birth of possibly the next gen currency.

Auction House closed by Gamers

Some time back i wrote about the troubles Blizzard were having with their virtual auction house tied in to their hit game Diablo 3. Back then the issue they were having was with prices sky-rocketing, players paying real-world money only to be drastically disappointing by the exchange rate in virtual gold, and suspicions brewing about evil, gold controlling oligopolies controlling the entire auction house (read the entire post here).

Now it seems the last straw finally broke the camels backs, and the auction house is being shut down. In a official statement, released on Blizzards Diablo 3 blog John Hight had this to say:

When we initially designed and implemented the auction houses, the driving goal was to provide a convenient and secure system for trades. But as we've mentioned on different occasions, it became increasingly clear that despite the benefits of the AH system and the fact that many players around the world use it, it ultimately undermines Diablo's core game play: kill monsters to get cool loot.

Everything is going to be shut down by March 18, 2014. While I think it is true that the auction house has taken away a lot from the core mechanic of the game, it cannot be understated that it was also a test product for Blizzard. With this I don't in any way mean that it wasn't finished, rather that Blizzard had an idea and wanted to test it out. 

The auction house has not broken in its system, but perhaps in the way it was implemented. It was way to easy for the market run amok, and a real hyper-inflation was created, something that naturally caused a huge backlash against the auction house and against Blizzard. I think Blizzard knows this, and will take this information back and reflect upon it for further releases down the line. However, I am confident this is not the last time we see the auction house. 

The main point of this story however is that Blizzard truly listened to the outcries of the community and corrected what many Diablo-players apparently saw as a fault in the game. Blizzard implemented something, the users tested it an didn't want it, and Blizzard subsequently rolled it back. Not many companies have the willingness to admit fault in this way, and Blizzard should have a great deal of credit for really listening to its gamers!