Oleg Andreev



Software designer with focus on user experience and security.

You may start with my selection of articles on Bitcoin.

Переводы некоторых статей на русский.



Product architect at Chain.

Author of Gitbox version control app.

Author of CoreBitcoin, a Bitcoin toolkit for Objective-C.

Author of BTCRuby, a Bitcoin toolkit for Ruby.

Former lead dev of FunGolf GPS, the best golfer's personal assistant.



I am happy to give you an interview or provide you with a consultation.
I am very interested in innovative ways to secure property and personal interactions: all the way from cryptography to user interfaces. I am not interested in trading, mining or building exchanges.

This blog enlightens people thanks to your generous donations: 1TipsuQ7CSqfQsjA9KU5jarSB1AnrVLLo

You don’t create anything of value

When people ask about how bitcoins are created, you reply that they are “mined” by computing millions of cycles of the same algorithm until a certain result is achieved. Basically, you spend time + electricity to generate new coins.

Then they ask you is it true that you do not create anything of value? And you honestly say, well, yes. Electricity is wasted on generating random numbers without any practical use, so there is no “intrinsic” value being put in the resulting coins.

This is of course not true. I can also burn electricity watching YouTube all day, but that won’t make other people pay me. The truth is what “miners” do is validating and securing transactions. That’s their main job that others are willing to pay for. That’s why Bitcoin has value.

Why is unlocking new coins tied to the block creation (“mining”)? Because, it’s the only logical place to do that. If you have a method to generate money, then people are supposed to do that like crazy provided that someone still processes transactions (which is the only reason to have any interest in the currency in the first place). So if I say, you should do these calculations to get new money, but to make transactions do those other calculations, nobody would care. But when you combine those two things in one single process, then you have a system with a “positive feedback”: people get reward directly and immediately for providing services for themselves and anyone joining later on.

So the value of Bitcoin is not in the cost of electricity, but in the ability to make safe and quick transactions and having a limited money supply. And the miners are not digging money from nothing, they are doing a service to everyone and are being paid for that.