Why did bitcoin programmers release mining code?

Why did anyone ever release bitcoin mining code, aside from promoting bitcoin and eventually raising investor awareness?

Looking at a price chart, bitcoins were valued at just a fraction of a dollar until it was better explained to people. Was this because

a) a lack of trust in fiat currencies during a recession, or
b) release of mining code solely to get bitcoins to have any value in the collective at all.

Was the global liquidity crisis and recession merely coincidence?

I'm curious because bitcoins have offered a really great return for people that were mining before the promotions or at other points in time.

CQM

Posted 2013-03-02T03:08:25.590

Reputation: 1 472

Which bitcoin programmers? – Nick ODell – 2013-03-02T04:45:30.323

Bear in mind we can't know if there is somewhere a closed source hidden miner which outperforms the public ones. – o0'. – 2013-03-02T11:20:41.940

Answers

Bitcoin is a decentralized digital currency. It is meant to be resistant to corruption and external control. That is the reason it was created.

Bitcoin achieves this only through the approach where consensus of the ledger is achieved by performing work.

Bitcoin is vulnerable -- this consensus mechanism can be blocked by anyone with 51% of the mining network capacity. To prevent anyone from having that ability to block, the mining network needs to be large enough so that there it is vastly economically unfeasible for an attacker to disrupt the network.

So to achieve this requirement of being protected with a ginormous amount of hashing capacity, the mining process is subsidized. This subsidy comes from the issuance of new currency. This subsidy helps to bootstrap the currency by putting it into many hands who might be willing to spend the funds for goods and services which draws merchants and service providers into the bitcoin economy.

So the combined goals of bootstrapping the bitcoin economy and ensuring that mining capacity is more than sufficient to dissuade any 51% attack are two reasons to release mining code and letting mining revenues be distributed to those willing to participate.

Because bitcoins aren't always circulating, there must be some willing to hold bitcoins as a store of value at all times. Again, Bitcoin has value only because it is a decentralized digital currency that is resistant to external control. If it doesn't have that then it is simply an online ledger -- no different than what PayPal provides, or what your online banking system provides. There are plenty of other open source ledger software options for this.

Only from the protocol being open (and trusted as being open by having the software being open as well) would an investor that is willing to hold bitcoins be assured that the currency truly is decentralized.

For Bitcoin to be valued, the source code had to be released. If the source code were never released, Bitcoin would never have achieved any value.

Stephen Gornick

Posted 2013-03-02T03:08:25.590

Reputation: 26 118

It's a chicken vs egg problem. If only one person had ever mined, or that one person only enable a small number of people to mine, Bitcoin would have likely never grown at the rate it has. We'd call it a centralized system, and it'd be little different from any other centralized currency contrived in the past several decades.

Its electronic transmission and security would be its primary benefits, but its users would still have to trust the miners to make their transactions official. This establishes a finite number of points of failure, all with an incentive to control mining. To me, this is not a very fair system.

Given your dichotomy, I'd point toward "release of mining code solely to get bitcoins to have any value in the collective at all". A thing can only gain popularity organically if it is exposed to the widest possible audience and those who choose to participate feel fully empowered. Distributed systems are pretty good ego boosters: everyone is equal, everyone can run a full node, everyone can mine.

As for the benefit of early adopters, this is true of just about any system. Those who learn something before it's popular, especially in technology, are the most likely to benefit from it as it gains popularity. This is called invention; this is called emerging technology. I personally like the title "Bitcoin consultant".

Colin Dean

Posted 2013-03-02T03:08:25.590

Reputation: 6 559