Last week, I talked about bitcoin and tried to explain it in simple terms by comparing it to virtual gold. This week I continue that thread by talking about bitcoin mining. One of the parallels bitcoin has to gold is that it is ‘mined’, and there is a fixed amount of bitcoin available to be mined, just like there is a finite amount of gold on Planet Earth. When bitcoin is mined, the miners first validate bitcoin transactions and then they solve a complex mathematical problem. The first miner to solve the problem gets some bitcoin. In this way, the miners don’t just dig up bitcoin, but they also help make the bitcoin ledger work.
Just like with gold, if someone else finds it first, you are out of luck and must continue working to solve another problem. When the founder, Satoshi Makomoto, first established bitcoin as a digital currency, people began to offer to trade physical goods in exchange for this virtual currency. This gave bitcoin its first valuation. Essentially, things have value because we decide they have value. If someone is willing to trade a pizza for my virtual coin, then my virtual coin is valued at the market price of that pizza. The first “block” of bitcoin was ‘minted’ by the founder, but after that, all coins were ‘minted’ via the mining process. As demand for this currency grew, so did its value. As of this writing, 1 bitcoin is worth about $39,597. On May 22nd, 2010, a person agreed to trade 10,000 bitcoin for two delivered Papa John's pizzas, so that was the market value of bitcoin at the time… based on today’s valuation, that’s some very expensive pizza.
There are several controls around the mining process. For example, the rate of bitcoin mining is reduced over time; it is cut in half every four years. In 2009, you received 50 bitcoin (BTC) for completing 1 block of mining. In 2020, you receive 6.25 BTC for the same work, Essentially, when you complete the mining process, a transaction is recorded on the bitcoin blockchain transferring newly minted bitcoin to you.
Specialized computers have been created to be faster at mining, and these computers can use a lot of electricity. With the value of bitcoin at close to $40,000, many people are willing to pay for the power to run the computers to do the mining. Companies like Stronghold Digital mining are buying entire power plants to power their bitcoin mining operations. As I said, there is also a limit to the total number of bitcoin that can ever be mined. Based on current projections, it expected that all bitcoin will be mined by the year 2140*.
For many, this seems almost “inconceivable!” (To quote Vizzini from the Princess Bride) but it’s true, people are using entire power plants to run specialized computers to solve a math problem and generate a virtual digital currency. What a crazy world!
If you read The Quantum Contingent, you’ll meet an agent with the same name as the country that The Princess Bride is set in (Florin), and you’ll hear a few more Princess Bride quotes along the way.
Speaking of the book, I received my professional editorial assessment back last week and am furiously working on updates based on the insightful feedback from my editor. I am also making many edits based on feedback from my daughter, who is serving as a developmental editor for me. (She had the idea for me to write a novel in the first place!) The good news is that I should be able to get a first pass of these edits in place quickly, so Beta Readers, your copy should be arriving in your email in a couple of weeks.
I hope your weather is as nice as mine is now! Enjoy every moment, and stay healthy and safe,
I was at dinner with friends this week and they asked me to explain bitcoin or cryptocurrency in simple terms in 30 seconds or less. I wasn’t happy with my answer, so I thought I’d try again here. You see, cryptocurrency is a vexing concept for many because it is completely virtual. My 30 second answer is this… crypto is like virtual gold. Gold has value because it is scarce and people are willing to barter with you for it. It is also relatively easy to convert to conventional government-backed fiat currency.
Similar to gold, bitcoin has value because people are willing to trade you money, or goods and services in exchange for it. When the first block of bitcoin was ‘minted’, it was valued because someone was willing to trade something physical in return for the first cryptocurrency. One of the early transactions was exchanging bitcoin for pizza. This put the value of those bitcoin at the market value of the pizza that was provided. As demand grew for bitcoin, its value increased. This is simply the law of supply and demand. If more people want bitcoin than there is bitcoin available, then the bitcoin that is available is worth more! As I write this blog, the value of one bitcoin (BTC) is $39,400. (That’s one expensive pizza)
Bitcoin is usually stored in a digital wallet. It is possible to print out the private and public keys of a bitcoin, but if that paper is lost or destroyed, there is no way to retrieve the bitcoin associated with that account. Think of the keys like your bank account number. Without it, you can’t access your funds. A ledger of all bitcoin transactions is stored in a decentralized network of computers on what is called a blockchain. The blockchain ledger confirms you have the bitcoin you are looking to exchange. You sometimes see news stories of someone losing access to their bitcoin. They have essentially lost their account number, and without it, no one can access it.
Bitcoin offers an alternative to a central bank controlled fiat currency. One advantage is that it can act as a currency in almost any country in the world, and it can be sent to anyone, anywhere in the world, instantly and at very low or no cost. (Traditional currencies can be slow and costly to move across borders!)
To date, bitcoin has often been more of a speculative investment than a currency because of its high volatility and limited acceptance, but it does have many other makings of a good currency. It is secure, scarce and highly divisible. (The smallest unit of a bitcoin is .00000001 bitcoin, or a Satoshi.) More and more businesses are starting to recognize bitcoin as a currency and this will help it become more useful as a currency instead of just an investment.
How does more bitcoin come into existence? Bitcoin is “mined” like gold! My thirty seconds is up for today so I’ll cover mining in next week’s blog. If you’d like to learn more in the meantime, I’d recommend checking out the bitcoin articles @ Investopedia.com.
(and yes, there is Cryptocurrency in my novel, The Quantum Contingent!)
One of the things I've always believed in is that you must be a continuous learner in life. The minute you stop learning, you stop growing. There is an adage, "The more you learn, you the more you realize you don't know." I have certainly found this true in my life. When I started my career at GE Lighting, I had no idea how difficult it was to mass produce something as 'simple' as Edison's light bulb. (It turns out making a million a day of anything is hard) As I learn about what is involved in becoming an author, I discover many detailed alleys of learning that one must traverse on the journey to publishing a book. In today's world, self-publishing is becoming easier and easier, however, it is estimated that >90% of books published today sell less than a hundred copies. In some cases, that is by design. It might be a personal project for a family. However, to fully explore publishing a book and to gain a broad audience to read it is as much of a task as writing the book in the first place! Here's a very abbreviated list of the alleyways I'm exploring relative to publishing a book.
I hope you are enjoying my Quantum Contingent Spotify Playlist and the photo blogs along the journey to publish The Quantum Contingent. I've recently updated the location page and technology page of the website with some new additions. If there is a particular location or technology you'd like featured in a future blog post, please let me know!
Thanks, and have a great week,
An old colleague from Italy messaged me last week that they were looking to buy my book when it came out, so this week, I thought I'd do a photoblog of a few locations in The Quantum Contingent that are in Italy, one of my favorite vacation spots! (If you ever go to Florence, please have some Gelato for me!) The book has a chapter in Florence, multiple chapters in Tuscany, and references Orvieto... Here are some of my photos of all the above! (The Quantum Contingent specifically mentions the three things shown in the middle row of photos)
In The Quantum Contingent, many technologies are used by villain and hero alike to either cause chaos or to prevent chaos. One foundational technology in use is Artificial Intelligence, or AI. AI is an often an overused word, like 'cloud' to describe many different technologies. AI simply represents any technology that attempts to mimic the cognitive function of the human brain. Typically, AI is “narrow” AI as in self-driving cars. In Tesla’s autopilot software, neural nets examine images in real time and do path calculations based on both the images and some other sensor data (e.g. ultrasonics for very close objects). The images are captured by 8 different cameras and stitched together into a 360-degree scene that is examined by the neural nets. Calculations are made as to the velocity of objects based on their movement through time. Autopilot AI doesn't try to decide what stock to purchase, or predict the weather, it is very narrowly focused on driving. General Purpose AI has not yet been achieved. General purpose AI is like Data on Star Trek. It can interact like a human in many different scenarios.
Data is the food that feed the AI beast. We have gotten better at collecting data. 1.4 trillion photos were taken in 2020. As we digitize more and more things, computers get better and better at predicting the future. Imagine what a computer could predict if it had access not only to your photos, but to all your credit card data, your geo-location data from your phone, and more. A paper, Predicting personality from patterns of behavior collected with smartphones, talks about how our digital footprints from our smartphones can predict our primary personality traits.
Unlimited access to data and strong AI Machine Learning algorithms can go a long way in providing accurate predictions for villains and heroes alike. In science fiction, this translates into things like the 2002 movie, Minority Report, where law enforcement attempted to predict before it happened.
So, in The Quantum Contingent, you’ll see some references to AI, but know that there are also many other uses of AI in the book that may go unnoticed. John McCarthy, a professor of mathematics at Dartmouth first coined the term AI. McCarthy had a saying about artificial intelligence: “As soon as it works, no one calls it A.I. anymore." So, when you see a rocket land on a drone ship in the ocean or use a driver assistance program like Auto-pilot, know that AI is at work even if it's not called AI.
Given this novel’s technological bent, and my own interest in AI. I did include one sentence that was entirely generated by AI. In one chapter the sentence: “For a century or so, such longevity has been the stuff of folklore and science fiction. The previous longest-lived human was Jeanne Calment, who died in 1997 at 122 years and 164 days. Physicists have suggested that the limit might be 155 years. A hundred years ago, the average life span in America was around 48” was generated when I provided the prompt “Immortality raises many ethical problems for humanity” to the transformer program at https://app.inferkit.com/demo This program uses a modern neural network to complete the provided prompt using InferKit.
If you’d like to read more on AI, I’ve written several blogs on the topic. You can find them here:
If you’d like to just enjoy a spy novel that has some fun references to technology then skip the technical blogs and just read The Quantum Contingent.
Talk to you soon,
Greg's blog will cover some of the things he learned as well as some of the tech and locations he used in his new novel, The Quantum Contingent.