The investor and writer who once proclaimed Bitcoin as nothing more than Tulipmania 2.0 is releasing a new book on Bitcoin titled”The Bitcoin Big Bang.” Brian Kelly has been appearing on shows and writing articles for CNBC on Bitcoin.
Granted, when he appeared on CNBC’s Fast Money his excitement over Bitcoin was not motivated by the technology, or potential to shape the world. Rather, the opportunity to cash in on inexperienced, speculative investors.
Kelly now calls himself a “creator of a digital currency” that has watched the industry mature from a “from a terrible toddler with a penchant for the illicit to a rebellious teenager with a bright future.” He claims his interest in Bitcoin changed when he stopped thinking of Bitcoin as a currency and looked at it as a payment processor. Brian Kelly said in the same episode that Bitcoin regulation is an acceptable outcome.
Anyway, the Bitcoin community is often accused of being an echo chamber where rumors are repeated, passed along and linger long after being debunked. Also, that we blindly pump any news as “This is actually good news.” I agree, all attention is good attention.
Last May, Mr. Kelly writes in his article “How I’m dodging bitcoin’s flaw.”
“Mining attacks occur when the computers used to solve the complex mathematical problems are faster than the software. Miners can hoard coins before the software has a chance to make the equation more difficult.”
“As mining became more profitable, miners turned to application specific integrated circuits (ASIC) and multipools.”
“ASIC computers are purposely built to solve an equation much faster than every ten minutes and a computer arms race began as miners fought to be the first to solve the equation and receive free bitcoins.”
Also read: Near Future of Bitcoin
Brian Kelly’s Book & Nautiliscoin
Kelly details the woes with creating his coin, Nautiluscoin. Apparently, NautilusCoin was designed as the first digital currency with a stabilization mechanism to reduce volatility. Unfortunately ASICs freed GPU miners to pursue altcoins. The free GPU mining power made it possible for GPU farms to 51% attack smaller altcoins with relative ease.
Well, that’s a bad windfall. With the changes in the mining landscape over the past year it was impossible to predict. E.g. ASICMiner crashing from 4.5 BTC to ~.1 BTC a share. Exponential leaps in hash rate. Bitcoin technology is esoteric, and no one could have predicted these things.
You can read all about Nautiluscoin on the bitcointalk.org forum here. However, there hasn’t been much activity from BK in a while. Spoiler, the stability mechanism was premining and holding the coins in a fund.
“Wait. scratch that. I did it because i actually believed BK was in this for more than just a few chapters in a stupid book…
He got the material he needed for his book and then abandoned the project… That should be obvious to anyone at this point.”
The BK_PHI account that started the thread (I am assuming this was Brian Kelly?) last posted on October 18th, 2014:
“Hi all —
It seems like peoples imaginations have run away with themselves.
No new coin is in the works. PoS is coming, just wanted to make sure the PoW fixes were stable.
That is all.
Proof of Stake has yet to be implemented at this time. I only include that factoid because it has bothered me. I’m only happy for the entrepreneurialism Mr. Kelly has shown, besides how it’s affecting his users.
In his April 14th article “How I created my own bitcoin-like currency” he states:
“Bitcoin does not require personal information and the database is distributed across an infinite amount of computers.”
“Creating a market for my coin intrigued me, so I dusted off my Econ 101 book. Buried in one chapter was a reference to Friedrich Hayek’s book, “The Denationalization of Money,” in which he advocated for the creation of privately-issued currencies.”
NautilusCoin was created using the defunct Coingen.io. Coingen provides a web form with requirements for a cryptocoin; block time, maximum coins, inflation/deflation, scrypt/sha256. A user pays, for example, 1 BTC and server side scripts build and compile the new coin. NautilusCoin is based on Litecoin – a Bitcoin clone, and uses the scrypt algorithm for mining. Unlike Bitcoin’s double SHA256 algorithm.
Usually the coins are benign. In rare cases some of them have enough marketing that they garner a following of folks who buy in to the dream. When the honeymoon phase of the altcoin ends and the price inevitably falls the coin gains a new asset: Bag Holders, the unfortunate folks who got in at the top and have no choice but to stay in the game.
In this chrysalis stage for Bitcoin, people already have and will continue to position themselves as voices, figures or representatives. All attention is good attention. However, in the spirit of Bitcoin I hope that we judge these individuals based on their effect and impact instead of their intentions.
I welcome Mr. Kelly’s interest and look forward to reading his book. His years of financial experience will be a strong voice for our community and I look forward to his thoughts on the changing financial landscape.
What do you think? Comment Below
Images from Wiley, CNBC.com and Shutterstock.