Bitcoin and halacha

The Bitcoin cryptocurrency has recently been in the news as its price continues to escalate. I was lucky enough to hear a friend of mine, a religious computer scientist named A., give a shiur on the halachic aspects of Bitcoin. Here is a summary based on my notes.

1. KINYAN

Mishna Bava Metzia 4:1 discusses the case of using money to buy goods. It specifies, using several examples, that the kinyan must be done on the goods and not the money. For example, one may do "meshicha" on a utensil, which transfers ownership of the utensil to one party and the money to the other party. The reverse does not work: doing a "kinyan" on the money does not transfer ownership of the utensil.

(The gemara explains that the law was originally different. On a deoraita level, transactions are in fact done via money rather than goods. However, rabbinic law reversed the procedure. This was done to avoid the situation where the money had been transferred, making the transaction valid, but the goods were still with their original owner. Were the goods to be endangered due to a fire or similar disaster, the possessor of the goods would not exert himself to save them, since they no longer belonged to him. Chazal did not like this possibility, so they changed the law to make the transaction dependent on transfer of goods.)

The upshot of these discussions is that one cannot take for granted that one's commercial activity has automatic halachic validity. If you want your transaction to be halachically valid, you must look closely at how you are performing it. So, for example, waving a lulav bought with a credit card might be halachically problematic. To perform the mitzvah on the first day of Sukkot, the lulav must halachically belong to you, but was the credit card transaction valid? Was it you paying the lulav seller, or the credit card company?

Sometimes this type of question is resolved by government regulation - "dina demalchuta dina". But this is not the case with Bitcoin, where the transactions happen online independent of any government, and generally without any government policy on their validity.

In this case, we might turn to "situmta" ("custom of the merchants") - an accepted commercial practice which halacha recognizes, even though it differs from the Torah's laws of transaction.

The key question regarding bitcoin transactions is: at what point does the transaction go through?

Imagine the case of a dishonest person who has $10 in their bank account, and writes $10 checks to two separate people. One of the checks is cashed, and their bank account goes down to $0. From now on, the second check will bounce rather than go through.

This works because there is a centralized authority - the bank - keeping track of how much money people have. However, no such authority exists regarding Bitcoin. You can send money to two different people, even if you don't have it. After some time, one of the transfers will be "confirmed", and the other is not.

In fact, it's possible for BOTH transactions can be confirmed. This causes the transaction record to "fork", as half the network thinks that one transfer went through, and the other half thinks that the other transaction went through. So there are two, mutually contradictory "histories" held by Bitcoin miners on the internet.

What happens in this situation? When the next transaction occurs, the network's nodes will each choose one of the two histories, generally the more popular one. So one of the two histories will come to dominate the network, while the other becomes less and less prevalent until it disappears. This process occurs at an exponential rate, with one history spreading very quickly. Generally, the rule of thumb is that if your transaction is still recognized as valid after 6 other transactions, it is safe to assume that the Bitcoin network has reached equilibrium, and the entire network recognizes it as valid.

But even after 6, or 50, or any number of transactions you can never know for sure that the transaction is valid. There is still an infinitesimally small chance that it will be rejected in the future. From a halachic perspective, this is the interesting bit - there is no real finality to any transaction, unlike "normal" transactions, where an object is physically transferred at a particular moment. At what point, then, does halacha recognize a Bitcoin transaction as a valid kinyan?

It is hard to come up with an objective answer to this. But perhaps the rule of "situmta" applies - the 6-transaction rule is the accepted practice of Bitcoin "merchants", and therefore halacha accepts it as well.

2. CHALIFIN

In the "chalifin" kinyan, one party takes a object from the other, and that causes the entire kinyan to be valid. For example, if one is trading a donkey for a cow, one can take possession of the donkey, and ownership of the cow will be transferred at the same moment.

There is a rule (Bava Metzia 45b) that "a coin cannot be used for chalifin", because "its imprint may be nullified" ("tzurta avida devetala"). That is to say, a coin is "fiat currency" which derives its value (primarily) from the government stamp of approval rather than from the metal it is made of. So if the government decides no longer to recognize the coin, its value disappears. The gemara considers this to be mutually incompatible with being the object transferred in chalifin.

(Note: the shiur giver referred me to an article by R' Asher Meir on the Gush website, asserting that in the time of mishna the value of a coin equalled the value of the silver in it, while by the gemara's time a coin's value was already mostly by the fiat of the government. I was not able to find the article offhand, but this is interesting historical context.)

What about Bitcoin? Bitcoin is a distributed currency that no government has the power to devalue. So perhaps it is usable for chalifin?

3. RIBIT

The Torah prohibits loaning money with interest.

In addition, the rabbis prohibited lending "seah beseah" (one measure of wheat now, in exchange for one measure of wheat in the future), because the price of wheat changes with time, so the value you return may be greater than the value you borrowed, resembling the payment of a loan with interest. Some amoraim extended this prohibition to lending "zahav bezahav" - gold for gold, at a time when money was typically silver.

The exchange rate of Bitcoin fluctuates very quickly, so it would seem that lending Bitcoin and returning an equal amount of Bitcoin would be problematic.

4. SHMIRAH

For a Bitcoin transaction to take place, one must provide a cryptographic "signature" to ensure they are the owner of the money they are transferring. There is also a concept called "multisignature", by which multiple signatures must be provided before money can be sent. Alternatively, an account can be set up so that the approval of *either* partner, rather than both, is sufficient to send money.

Just like a physical object can be entrusted to another person for guarding, one can imagine Bitcoins being entrusted to multiple people for guarding. If so, the halachic laws of shmirah might would need to be applied in new ways.

5. AVEDAH

In halacha, lost objects must be returned if they have an identifying sign ("siman") that allows them to be returned to the correct owner.

Bitcoin value is accessed by a "private key", a unique randomly generated string of numbers. If you forget the number, your value is lost forever, since with current computing resources it's essentially impossible to regenerate the string.

Since this number is so unique, one could imagine that it is the best type of "siman" imaginable.

However, in the case of "avdah mimenu umikol adam" - when it seems essentially impossible for any person to recover the object, for example if it was washed away by a river - there is no requirement to return the object, even if it has a siman.

Since it is so difficult to recover a lost Bitcoin signature, one might think that it falls in this category, of objects that do not need to be returned if they are somehow found.

Attention Google Maps

This caption is weird/creepy. Please change it.

Uncanny valley

Computer graphics people like to talk about the uncanny valley - the idea that making an animation character look sufficiently realistic can make people dislike the character - because suddenly they see it as a flawed human, rather than as a fictional character skillfully evoking a human. Thus the reaction quickly becomes negative, not positive.

I think the same effect occurs with actual humans - specifically teenagers.

There are basically three kinds of humans: adults, kids, and teenagers. Adults are useful to other adults - they "speak" a common psychological language, which makes it easy to communicate with them and easy to get things done together with them.

Kids, on the other hand, are pretty much useless to adults, but they are cute. The "cuteness" factor is not exclusive to kids - we also find many animals to be either cute or just entertaining. Apparently with both kids and animals, we recognize them as different from us, and accept them as fine examples of whatever they are, and thus end up liking them.

Teenagers have neither advantage. They are sufficiently different from us that they are rarely useful. But they are too similar for us to appreciate them as different. And thus we, the adults, simply find them annoying.

Office assistant

Deep inside a long email thread I am having with my co-workers (yes I am now seeing university research as a "job"), somebody wrote the following sentence to somebody else: "Please join us on Monday at 9:30."

And lo and behold, GMail puts the following suggestion on the sidebar:

Would you like to...
Add to calendar
Shalom,
Mon Oct 6, 2008 9:30am

It feels like Microsoft's Clippy, except a thousand times more sophisticated and useful. (Even though I don't use the GMail calendar.)

By the way, that would be tomorrow morning at 9:30am when I give a long presentation to a leading Israeli defense contractor about the device I've been developing. Wish me luck...

UPDATE: My part, at least, of the presentation went quite well. Whew.

livesContentsk

Ever see the word "livesContentsk" before?

Apparently Microsoft Word, or some version of it, is stupid enough to think that every occurrence of the letter sequence "toc" must refer to a table of contents.

In honor of Parshat Balak

A quote from an online chat room...

*** Now talking in #christian
[Word_of_God] Welcome Abstruse to #christian I am a Bible Bot. For more info type: /msg Word_of_God !info
[Abstruse] !kjv numbers 22:21
[Word_of_God] Numbers 22:21 -- And Balaam rose up in the morning, and saddled his ass, and went with the princes of Moab. - (KJV)
*** SageRider sets mode: +b *!*@c211-30-208-111.rivrw3.nsw.optusnet.com.au
*** Word_of_God was kicked from #christian by SageRider (Please dont Swear)
[Abstruse] I know I'm never going to be able to come back in this channel again after this, but damn was it worth it to see that...

Again from the took-30-seconds-to-write-it post department

I'm constantly getting announcements from various campus organizations advertising their events or whatever. It fills up my inbox, it's sort of annoying. And they ALWAYS feel the need to change the time or location or agenda or contact info just a little, and then send out another email to inform everyone of the changes.

I have a feeling that they do this on purpose, because they know that 90% of people delete the email without even reading through it, and if they can get us to read two emails with essentially the same content, then the chances of somebody seriously considering at least one of them are much higher.

The things you learn

I wanted to check that I was using a certain Hebrew technical word correctly. So I went to Google Images and typed it in, to see if the pictures would match what I was thinking of.

Oops.

Apparently, the most popular usage of that word online is on porn sites, as a description for part of the female anatomy.

Shabbat Guard

A program which automatically shuts down your web site at different times for different people, based on the location of the person visiting the site.

As the site says, "When a visitor comes from a place that's already Shabbat - your web site will be closed for him, while for one that arrives from a place that it is not yet Shabbat - your web site will be opened."

The obvious question is: The only people likely to buy this are Orthodox Jews, and how can they be sure that it works? Wherever they go to test it, if they themselves aren't breaking Shabbat, there will be no indication that the software is running! (The obvious answer: learn to use SSH.)

Sometimes, Google ads are interesting enough to click on even when you know you won't buy anything. I clicked this time, and this is what I found.

Woah

For the first time in... ever?, I have zero messages in my Gmail inbox. Incredible.

I might be going to Brovenders

Prepare for the Yomim Tovim by joining either or both of these pilot shiurim
of ATID's Web Yeshiva. Learn Torah over the Internet, while seeing and
interacting with your teachers and fellow students, from the comfort of
your own computer.

ROSH HA-SHANA, YOM KIPPUR & SUKKOT IN THE GEMARA with Rabbi Chaim Brovender
Sundays, Tuesdays & Thursdays
5:00 PM Jerusalem Time (for 1 hour)
Preparation in advance strongly recommended.
Advanced Gemara Shiur with Rishonim for men, learning assorted sugyot
me-inyanei de-yoma.
Starts Sunday, August 26th until Sukkot.

RAMBAM'S HILKHOT TESHUVA with Rabbi Jeffrey Saks
Mondays and Wednesdays
4:00 PM Jerusalem Time (for 1 hour)
Preparation optional.
Open to men and women regardless of previous background. Exploring
Maimonides' classic Laws of Repentance. Starts Monday, August 27 until
Sukkot.

ATID's Web Yeshiva is a fully interactive learning experience. Join now for
one or both of these shiurim being offered for free during our early pilot
phase, and be a pioneer of the Web Yeshiva wherever you may be in the world.
TO REGISTER, PLEASE CONTACT RABBI YEDIDYA RAUSMAN, DIRECTOR OF WEB YESHIVA,
AT RAUSMAN@ATID.ORG OR CALL 02-567-1719.

Requirements:
* Internet connection
* Webcam
* Headset with microphone
* Sefarim are not necessary (texts provided online)
After Sukkot, Web Yeshiva will be expanding with programs for men and women,
offering shiurim in English on Gemara, Tanakh, Jewish Thought, and Halakhah.

Computer programming awards

The Good:
When I searched a thesaurus site for the word "pattern", it showed me Google ads for anti-baldness treatment - in Hebrew. I'm quite impressed that they manage to detect where I am, and come up with a non-obvious but sensible targeted offer based on the word I looked for. (Of course, what's even better is that I've set up my home computer to block ads on web pages, so outside work I wouldn't see the ad at all. And no I'm not going bald.)

The Bad:
Whenever I log out of any of the Microsoft Windows computers in my lab, it forgets all the settings that I have changed. Or rather, it intentionally overrides them when I log in again. Thus, every time I log in and start up my usual programs, I need to deal with at least 15 (literally, I wrote up a list) popups and questions and error messages until the system gets to a basic state of usability. Everything from the web browser warning me that it's dangerous to search Google, to the simulation program forgetting where to store temporary files, to Microsoft Office trying to install its stupid paper clip (which somehow wasn't installed the first time, but even if it was, I would have had to turn it off every time). The first time you log in this annoyance is expected. The 30th time, it's just ridiculously frustrating.

The common thread in my Good and Bad is that they aren't questions of brilliant cutting-edge innovation, but simply of having a tiny bit of thoughtfulness in the design process. The lesson can be summarized very simply: Lazy people make crap. People who care may not be smarter, but are conscientious enough to make good products. And guess which I prefer to use.

Hebrew Codepage Convertor

Does the Hebrew text you see on a web page or in an email look like this: àéæä éåôé ääîøä äöìéçä?

If so, then you probably want to fix it at the site I just wrote.

I was getting important emails with the text messed up like this, and decided to do something about it.

Google-bombed

Whenever I visit GMail from my apartment, my internet connection goes down. I have disconnect, wait a couple minutes, and reconnect. Really, really, really, annoying.

Google understands Ashkenaziss

When you search Google for the word "Shabbat", it also finds pages which don't include "Shabbat" but do include "Shabbos".

See for example the following search.

Pretty cool, and I wonder how many other examples of this exist. And if this is hand-coded or if there's an algorithm to find search terms that are determined by users to have the same meaning.

Inconceivable

My usual way of resolving grammatical uncertainties is to plug the two options into Google and see which comes up with more hints. But what do you do when the options have the exact same number of hits? And seriously, what are the chances of that happening?

UPDATE: the first time I tried it, I got the same number of hits for both; now the number is slightly different.

Useful references sites

Want to translate a technical term which does not appear in your dictionary? Go to Wikipedia, find the term, and click on the side bar to get the equivalent page in a different language. And if you need a good dictionary, look here.

Need the Israeli equivalent of Google-Maps? Try Mapa. (No Google Maps API though, I asked them, although if you pay for a subscription you can get a partial equivalent.)
.

Anonymity II

What implications, if any, does the merging of Blogspot and Google-ID usernames have for anonymity of blogs?

Anonymity policy

To make it official: I don't really intend for this blog to be anonymous. I've mentioned enough personal details that a careful reader could probably piece together a lot of my biography, and figure out who it is. I do intend for it to be ungooglable. Thus I avoid identifying names, and in the rare instance that someone would write a comment using identifying info, I'd delete that too.

Idiots

I recently received an email which included the following line (paraphrased):

"If you are not receiving this email, here is how to get onto our mailing list..."

There is really no need to comment; the line speaks for itself.