Wei Dai's comments on Bitcoin
Wei Dai's comments on Bitcoin posted on lesswrong
In response to comment by CarlShulman on Bitcoins are not digital greenbacks Wei_Dai 20 April 2013 07:56:08AM * 11 points [-]
Bitcoin seems more relevant than Craigslist, PayPal, or other tech startups because it involved major technical and conceptual/philosophical advances on the existing state of the art, and these advances didn't originate from nor was likely funded/supported by academia, government or industry. Also, its social impact seems larger - if Craigslist or PayPal didn't exist, something essentially identical would have been created very soon anyway, but if Bitcoin didn't exist, another Bitcoin may not have been created for another decade, and/or may have been created with very different characteristics, for example it might have been coded with a monetary policy that emphasized price stability instead of a fixed supply of money.
I would consider Bitcoin to have failed with regard to its monetary policy (because the policy causes high price volatility which imposes a heavy cost on its users, who have to either take undesirable risks or engage in costly hedging in order to use the currency). (This may have been partially my fault because when Satoshi wrote to me asking for comments on his draft paper, I never got back to him. Otherwise perhaps I could have dissuaded him (or them) from the "fixed supply of money" idea.) I don't know if it's too late at this point to change the monetary policy that is built into the Bitcoin protocol or for an alternative cryptocurrency to overtake Bitcoin, but if it is, then Bitcoin is similar to self-improving AI in that it may be critical to get the first one right and it offers evidence on how hard it is for an individual or small group working outside the mainstream to do that.
Since I have a personal connection with Bitcoin I'm probably tempted to read more into it than I should relative to other evidence such as other tech startups. I'm curious what your impression is after reading the above, and whether there is other specific evidence that I should be paying more attention to.