Bitcoins won't fail due to a bubble. Maybe not even a hack. They will fail for basically the same reason any fledgling currency of any new country fails: instability. And you're seeing it now -- a pizza that cost once 10k bitcoins now costs 1/15th of one. These are MASSIVE stability swings. There is no stability. The buying power of a bitcoin is, and as far as I can tell, will always be, subject to huge swings. Why? Because there is no mechanism by which supply can ever be calibrated to demand. There are a max of 21MM coins -- that's it, can't expand, ever. Bitcoins will always be a type of speculation / bet -- which is interesting, to be sure, but fails the test for a good digital currency because a fundamental tenant of a good currency, a desirable currency, is it has relatively stable buying power.

But it is fascinating to watch. Bitcoin 1.0 just fundamentally lacks any design considration for price stability, that coupled with an artificially set 21MM total bitcoins, and it is like instability is actually baked into the design.

Bitcoin 2.0 should have a mechanism to improve price stability -- this is no trivial task, however, and if there are any econ folks out there I'd love to hear any ideas on this point. Would require approx equaling supply and demand, but evening knowing when you've done this is tricky.

>> The problem is that Bitcoins have very little intrinsic value. The value of national currencies is based on the stability ogf the government backing it, ultimately reflecting the currency's use for paying taxes and other government charges.

There is no intrinsic value to any fiat currency (except maybe as a fuel to burn). The value of national currencies is NOT based on the stability of the government, it is based on supply and demand for the unit of currency. People want dollars because they are rare, simple as that. Gov't reputation can screw with the stability of the currency by not being dependable on the supply side of the currency, but that is different.

According to your view of the world Picasso's paintings should all cost, oh, about $500 bucks. All 1983 Bordeauxs should cost about $7. All circa 2006 mansions in las vegas built for $1MM (now selling for $500k), should always sell for $1MM. You need to take econ 101. Actually, just about everything in your post is incorrect.

While I don't think full code is all that useful (what if hardware-specific, what compiler, what language, etc. etc. -- if you look @ old patents they have this, and it's really not helpful at all), I do think an actual useful comment /.'ers can make to the USPTO would be to bolster examination of whether the description does include sufficient detail. You could develop that further into an some good feedback... In my 10 years of practice I've *never* seen the USPTO challenge whether there was sufficient disclosure.

>> To look at what you are listing - it has been known since the dawn of computers that a signal does not stick at the two voltages selected in the analog circuit for determining what 0 means and what 1 means - typically ~0.0v and ~0.5v, though some use ~0.0v and ~0.33v too.

I think you're focusing on the layman's explanation rather than the claims. Look @ the claims instead... they have survived a first challenge on prior art grounds. It is not as simple as you're suggesting b/c it would be invalid due to prior art.

The Bilski-like patents are the "bad apples" that cause a lot of bad will towards software-type patents (and so-called business method patents). The two should not be lumped together in my mind. There are hugely innovative, wonderful things being done in software, and socially we'd be silly to disincentivize this part -- the largest company in the world is ... a computer company... I just don't understand how /.'ers can all just assume the system is broken when they've probably all benefited from it (strong job market, for example).

>> Is Europe such a wasteland of software innovation? I don't uncritically accept that proposition. How do you measure that?

Totally anecdotal on my part. I'm looking at my own desktop, the only software from Europe is Avira. What large, innovative software companies can you name (without resorting to Google) that are from western Europe? I'm sure there's a couple... NOTHING like the huge numbers you see in the USA.

>> I also don't buy the idea that excluding others is the way to profit.

That's not really it -- close, but not it. Consider if you had $100MM and wanted to invest, and you had two scenarios. (1) Company ABC that has 50 patents filed on its core algorithms, 10 granted patents. Some will surely be invalid when issued just because, well, the USPTO is still working on quality in examing the software arts... not a perfect art by any means. But some will be valid. Won't be perfect. (2) Company XYZ, identical product offering to company ABC, but has no patents because all of the developers apparently subscribe to the Slashdot notion that all patents are bad ;). The product offering of both companies is quite innovative, but reality as it is, other smart companies could get within 99% of what they're doing by analyzing their product, within about 6 months and with modest investment of about $100k.

Questions:
(1) Which would you, as an investor, be more interested in?
(2) Which would you, as a developer interested in having a job, be more interested in?
(4) Which do you think would be worth more money? Have more profit potential?
(5) Which company would have more interest in further developing the product (knowing it can be reverse engineered w/ modest expenditure)?

To 99% of the /.'ers who out of hand dismiss all patents on software, if they answer this honestly, they'll see they're just silly.

Patents are a mixed bag -- they are hugely beneficial to some, but without question they have a social cost. The question is, though, how to encourage innovation? USA has strong patent rights, and the most innovative companies and labs, as a whole, than any other country in the world. As an experiment, USA tech. is a huge success. I think patent rights has a lot to do w/ that, and the scenario above plays out thousands of times / week everywhere in the world... a lot of places outside the US, however, the ABC co. is the norm -- difficult to attract investors!

>> The software that enables all the wonderful things you describe was built by or directly on all of the advancements made without the supposed benefits of software patents.

This is one theory, but let's explore it a bit further. Obviously it is difficult to prove one way or another. Certainly there must be a population of software innovations that would exist even without the patent system. But there's probably another group that wouldn't exist, also. If you were a software company sitting on a new compression algorithm that will change the delivery of video content, would you be more inclined to invest further in the technology knowing you had some patents on it? It's not too hard to conclude that certainly you would... there are countless other examples that happen every day of companies allocating resources to software development *because* they know if the ideas are novel and unobvious, they might be protected. Investment is what drives a lot of the innovation. Ask Google, which started with a Stanford patent.

So, what you're really likely saying is the universe of innovation that happens *because* of the patent system does not outweigh the innovation that would happen anyway or the innovation that is stifled. This is an interesting argument, but not at all unique to software inventions. If we as a society are to protect innovative ideas, that these ideas are embodied in software should not exclude them (in my mind, anyway).

Or, one could ask if there is a positive correlation between those countries having strong software protection laws and the number of people employed by the software industry. What you'd find is there is a very high correlation, I think. Places like Europe, where software innovations are difficult to protect, hare a desert wasteland of software innovation. Sure, a rouge developer might do something cool now and then, but the vast majority of companies are only going to invest in a technology if they know they can monetize it, and this usually means by excluding others. Highly difficult in Europe; Not so difficult in USA.

I'm not sure what you mean by a "good" software patent. There's obviously been a number of software patents that have been upheld by the Federal Circuit as being valid and infringed. There are others that are close calls. The claim below was just ruled valid and infringed at a lower court... (Carnegie Mellon v. Marvel). Why should the underlying invention there not be subject to protection if it if novel and unobvious?

(from PatentlyO.com):

The asserted patent claims are basically signal processing logic algorithms for determining the value of items coming from a computer memory signal. This is necessary because the "0" and "1" that we normally talk about for binary digital signals is not actually accurate. In particular, the invention indicates that you should apply a "signal dependent" function to calculate the value as a way to overcome noise in the signal. Apparently a key distinguishing factor from the prior art is that the decoding functions used are "selected from a set of signal-dependent functions." The asserted claims do not identify the particular functions used, only that functions are used.

The two infringing claims are as follows:

Claim 4 of US Patent 6,201,839:

A method of determining branch metric values for branches of a trellis for a Viterbi-like detector, comprising:

selecting a branch metric function for each of the branches at a certain time index from a set of signal-dependent branch metric functions; and applying each of said selected functions to a plurality of signal samples to determine the metric value corresponding to the branch for which the applied branch metric function was selected, wherein each sample corresponds to a different sampling time instant.

Depends, is the novel novel?

You are incorrect, sir. You do not need to release the source code. This was true back in like the 1980s (or common practice then, anyway). Nobody release code for their software patents these days b/c it is simply not required. You must describe the general algorithm in sufficient detail to enable one of ordinary skill in the art, without undue experimentation.... this is a far cry from source code.

If they did this they'd get a lot of unhelpful rhetoric.

Most of the comments here echo a prevailing view of most software developers: just ban software patents. A lot of rhetoric, not much in the way of thoughtful analysis.

Consider this: In a few milliseconds, you can search just about every web page that exists in the world, while driving your 55 mpg vehicle to get a magnetic imaging scan @ the hospital, and while waiting there you can use your iPhone to call any other person having a cell phone, in the whole world. All brought to you by innovative software...

But those on these boards don't seem to recognize this -- I think it's a case of a few bad patents spoiling the bunch, frankly. It would be nice to at least have the haters concede some of the good points of software patents. If one can think of none, then the intellectual blinders are on, because without question it is a mixed bag -- there is good, and there is bad that comes w/ time-limited monopolies. A better discussion would focus on the pros and cons and the balance.

Also: is it merely coincidence that the most innovative software companies set up shop in countries where there is the most protection available for software innovations? How many tier 1 software companies exist where there's no protection? (I'm sure there are a few, but the VAST majority of tier 1 software companies are in the USA -- think Google, Apple, MS, Adobe, etc. etc. etc.).

That's a lot of thinking you put into that.