What were the Phillies thinking when they extended Ryan Howard?

I wrote this blog post back in 2010 at a blog my friend and I shared. That blog is no longer active and alive in the world so I decided to re-publish it here for posterity sake. 

Original publish date: May 2, 2010

It's been a few days since news broke that the Phillies had signed a 5-yr extension with their 1B Ryan Howard.

Details of the deal:

  • Term: 5 yrs plus 1 yr team option ($10M Buyout)
  • Money: $125M (includes $10M Buyout)
  • It begins: After Howard's current deal is up after the 2011 season, when Howard is 32
  • It ends: After 2016 season (or 2017 season with option exercised), when Howard is 37 (or 38)

I have been confused to no end about the amount of money given to Howard in this deal not to mention that number of years involved - All for an aging hulkster who can't hit lefties, lacks plate discipline and patience, and depends solely on his power for his value to the team. I'm not here to talk about WHY this deal is good or bad. I'm here to talk about, or rather theorize what the Phillies (GM Ruben Amaro) was thinking when he made this deal.

1) Huge play on inflation of the US dollar: Let's face it. The US government is printing money quicker than any time in history. There's bound to be some inflation in the future. I think Ruben Amaro is banking on an HUGE inflation rate - somewhere in the neighborhood of 100-200% per year.

Here are the present day value of the contract based on inflation rates of 3%, 100%, and 200%:

3%: $110M
100%: $10.3M
200%: $3.4M

There you have it. If inflation is 200% per year for the next 7 years, Amaro is a genius, only paying Howard $3.4M of today's dollars.

2) Casey Close, Howards' agent, has blackmail on Ruben Amaro: This kind of stuff happens all the time in the movies. Why not in real life? Casey Close has pictures of Ruben Amaro getting hot-n-heavy with with Mr. Met. If those pictures got out, he would be the laughing stock of not only Philadelphia but the entire baseball community.

3) Ruben Amaro wants to proves baseball's stat community wrong: Ruben Amaro said in an interview recently that he does not value the opinions of sabrmetricians (sabrmetrics is the study of baseball statistics). In a huge 'All-In' moment, Amaro bets his teams' financial future on 1 player. Even though Howard's extension has received much criticism from the baseball community (both stat-heads and executives), Amaro truly believes in his player and he is willing to put his reputation on the line.

Baltimore Orioles Application

Back in 2013, I was in the middle of a 3-month endurance studying period for the GMAT. During this time, the Baltimore Orioles reached out to me to apply for their 2014 Internship. As part of their application, they provided a series of Baseball Analytics questions for me to answer. Here are those questions and answers. This was so much fun to do even though I did not receive a position with the Orioles. I thought I'd be fun to share this with you all.

Baltimore Orioles 2014 Internship Questionnaire

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Please answer either of the following two questions in about 400 words or less.

1) What is the best way to use a pitching staff? We know this question is vague; take it in any direction you like.

2) Which of the following two players would you prefer? Explain your thought process, but also focus on one aspect to compare and contrast most specifically. Assume both are 27-year-olds.

Player A: 
A LHH who is above-average defensively at RF & LF
.255/.330/.415 in 2,000 career PA
.260/.350/.430 in 700 PA vs. RHP in 2012-13
.227/.250/.330 in 300 PA vs. LHP in 2012-13
.245/.305/.385 over his last 150 PA
Career Pitches/PA: 3.70

Player B:
A RHH who is average defensively at 3B/2B
.250/.320/.400 in 2,000 career PA
.241/.309/.387 in 700 PA vs. RHP in 2012-13
.270/.345/.430 in 300 PA vs. LHP in 2012-13
.265/.350/.460 over his last 150 PA
Career Pitches/PA: 4.10

Please answer the following four questions. For questions 4-6, feel free to use bullet points or incomplete sentences.

3) Please propose an analytics project that you think would be of assistance to the Baltimore Orioles’ front office. Be as specific as possible: What question would you be attempting to answer? What data would you use? How would you go about collecting that data? What programs and statistical techniques would you use to analyze the data? How do you foresee this project helping the front office? 600 words or less.

4) In your opinion, what area represents the next potential source of competitive advantage for MLB front offices? Just identify it and explain it briefly in roughly 50 words or less.

5) Please list 4-5 of your favorite baseball-related websites or books. For each item in the list, include a note or two explaining why you find this source interesting or informative.

6) Please list the programs, computer languages, and foreign languages in which you are fluent. For each one, what is your comfort level on a scale of 1-10? No further explanation is necessary.
1 = very basic familiarity, 10 = completely fluent.
Example: Excel (7)
SQL (3)
Spanish (6)

Question 7 is completely optional. You will not be penalized for skipping it; in fact, it is our hope that many – if not most – candidates leave it blank. Our aim is not to take up hours of your time, but if there’s something you’d like to add that we haven’t yet covered, this is your space.

7) Is there anything else about you we should know? Be creative.

My Answers

Question 2

The following analysis assumes that unspecified attributes of the situation (e.g., team need, player cost, etc.) are the equal for both players.

Defense

We are presented with two options: 1) an above average defensive RF/LF and 2) an average defensive 2B/3B.

Baseball positional defensive ability is inversely proportional to availability of positions’ players. With the low supply of SS and C, teams are more willing to accept less offensive performance since there is an inherent scarcity premium. Using results from a study on defensive positional value[1], 2B/3B positional values were worth +2.5 runs above average per season and RF/LF were at -7.5 runs above average per season.  Thus, an average 2B/3B produces 10.0 more runs than an average RF/LF.

However, it must be noted that the option presented is an above average RF/LF. For this analysis, I will define “above average” to mean a player who produces defensive value above average equal to the 75th percentile of his position data sample. For the 2012-2013 season, an above average RF/LF translates to approximately 7-10 runs per season compared to an average RF/LF [2]. Given the small range of values and the margin of error, I am compelled to state that an above average defensive RF/LF is worth about the same as an average 2B/3B.

Conclusion: Push

Offense

Over their 2000 PA, Player A bests Player B in all triple slash categories (AVG, OBP, SLG). Additionally, we are also given platoon data (700 PA vs R, 300 PA vs L) and his most recent 150 PA data. 150 plate appearances is not nearly enough of a sample size to reliably evaluate a player’s true talent level for the statistics used (AVG, OBP, SLG) [3].  For that reason, these 150 PAs will be weighed very low on the decision matrix. In 2012-2013, 29% of all PAs were vs L and 71% were vs. R [4].  Both players were essentially used as a “regular” (non-platoon) player. This means that the players were used primarily as “regular everyday” players. Assuming this use continues, one can combine both the 700PA vs R and the 300 PA vs L as one sample of 1000 PAs. This yields an interesting result. Both players have exactly the same triple slash line (.250/.320/.400) for the 2012-2013 seasons. For the 2012-2013 seasons, the league average triple slash was .254/.319/.401. Over the past 1000 PAs, both players produced the same offensively and both were decidedly average at that.

In 2013, the average Pitches/PA was 3.85; Player A was below average and Player B was above average. A recent study[5] suggests that “running up pitch counts” is becoming less effective as pitchers are throwing more strikes and issuing fewer walks and taking advantage of batters’ passivity. As such, Pitches/PA does not tell us much in regard to forecasting.

Conclusion: Slight edge to Player A for better career numbers

Summary

The difference in value between these players on paper is negligible as both players approximately equal in defense and offense over 2012-2013 seasons. Without knowing more team factors, I would pick Player A. He has a better career triple slash line, so for forecasting purposes, I would regress him to his mean, which would provide a slightly higher forecast than Player B, who has a lesser mean. Also, since he is a lefty and there are substantially more vs. R Plate appearances, his strength would be focused on, while minimizing his weakness. 

Question 3

Since 1994, when the league expanded to 6 divisions with the addition of the Central Division in each league, the AL East has the highest average win total required to win the division at approximately 96 wins, whereas the NL West has just over 90 wins as its average wins required to win the division [6]. That is a 6 Win Difference! The Baltimore Orioles have played in the most competitive division over the past 20 years. For my research, I would do everything in my power to compile a comprehensive proposal to realign the divisions to level the playing field and provide all teams an equally competitive landscape to compete in.

I don’t foresee this happening in the near future so my analytics project would center on a different topic. In the current landscape of baseball, more teams are locking up their young talent earlier and longer and not allowing them to leave via free agency until past their primes [7]. This has caused the talent pool for free agency to dry up, increasing salaries for the players who go to free agency, which makes it even more important to lock up the young valuable players you control.

This year, the name Manny Machado has started to be used in the discussion of top position players in the game right now along with the other two top young talents, Mike Trout and Bryce Harper [8].  Prior to his injury this year, he was profiling as the type of player you lock up for many years. However, this injury injects significant risk into this proposition. But does it have to?

The risk that is encountered when we are discussing injury is the risk of the unknown. What will the future bring for Machado? How long will it take for him to recover? What will his future production look like? Will he ever be the same? Can he stay at a premium position of 3B or shortstop? Can he remain an elite defensive player? All of these questions boil down to “how can we reliably predict his future production?” If you could reliably predict his future production, you could project his value and in turn, know what kind of contract to offer.

For this analytics project, I would focus on building a medical database that includes data about injuries that baseball players suffer from most. I would look at both the general population for this data and also a specific subset for baseball players; assembling data from other sports too could be a potential third sample set of data and collecting data on recovery time, failures, repeat injuries, related injuries, and many other items. For baseball players, I would look at the production of players with similar injuries and how they performed pre- and post-injury.

To gather data, I would scour medical journals and databases for every piece of data I can pull out. Working with the Baltimore Orioles medical staff and medical consultants would be a necessity. Once the information has been gathered in one repository, I would use statistical tools like JMP to see which variables are correlated most with the output factors useful for us (recovery time, post-recovery performance vs. pre-recovery, etc.).

                                                                                    
Although this research project would have a broad scope of injuries, my focus would be on Machado. If we were to develop a probabilistic model of the potential outcomes for Manny Machado’s recovery and future production, we could answer two major questions for the evaluation of a contract extension for Machado:

1) Do we know enough to mitigate risk from this injury to sign him long-term?
2) What terms should we favor in contract negotiations? Information asymmetry between the Orioles and Machado’s representation could provide a favorable negotiating position.

The most difficult challenge of this project is gathering the information all in one place. Once it is stored locally, the other members of the Orioles organization would have access to it and be able to perform their own analysis, which would greatly stimulate the propagation of ideas.

Question 4

I think teams will begin to exploit holes/technicalities with the relatively new CBA. Some teams have already enacted some strategies to use more money on over-slot picks and gain savings on later rounds with under-slot. One scenario is sign and trade deals similar to the NBA. In the MLB version, it could work for teams with a protected pick sign a player and trade to a team who has an unprotected pick (note: I’m not sure if this is legal per CBA).

Question 5

  • Fangraphs (website: fangraphs.com)- This is a staple of the sabrmetrics community. The diversity and depth of the analysis is exceptional.
  • Crashburn Alley (website: crashburnalley.com/) - I’m a native Philadelphian and this site has by far the best writers and analysis for Phillies baseball.
  • Moneyball (book) - Michael Lewis is one of my favorite writers. Any book that combines one of my favorite writers with one of my passions (baseball) is an instant favorite of mine.
  • The Book (book) and Inside The Book (website: insidethebook.com) - In my opinion, Tom Tango, provides some of the best analysis of baseball online.
  • Brooks Baseball (website: brooksbaseball.net) - Dan Brooks continually improves his BrooksBaseball website allowing the masses to view PitchFX data though a terrific GUI.

Question 6

Microsoft

  • Excel(10)
  • Powerpoint(10)
  • Word(10)
  • Project(10)
  • Visio(7)

Autocad(7)
Pro/Engineer(7)
mySQL(6)
Python(3)
Matlab(10)
C++(3)
VBA(7)
HTML(7)
Labview(3)
Mathematica(3)
Linux(5)
JMP Statistical Analysis(5)
German(3)
Spanish(2)

Footnotes:
[1] MacAree, Graham (Unknown). Positional Adjustment. Fangraphs. Retrieved October 27, 2013, from http://www.fangraphs.com/library/misc/war/positional-adjustment/
[2] Team runs saved per position data gathered and complied from fangraphs.com database
[3] Carleton, Russell A. (2012, July). Baseball Therapy -It's a Small Sample Size After All. Baseball Prospectus. Retrieved October 29, 2013, from http://www.baseballprospectus.com/article.php?articleid=17659
[4] Vs R PA and vs L PA data gathered and complied from fangraphs.com database. 108,162 PAs vs L; 260,890 PAs vs R in 2012-2103 seasons
[5] Verducci, Tom (2013, June). Wedge Issue: Why plate discipline has now gone too far. Sports Illustrated. Retrieved October 28, 2013, from http://sportsillustrated.cnn.com/mlb/news/20130604/dustin-ackley-eric-wedge-sabermetrics/
[6] Data gathered and compiled from Baseball Databank (years 1994-2010) (http://www.baseball-databank.org) sql database and from Fangraphs (years 2011-2013) (http://www.fangraphs.com)
[7] Cameron, Dave. (2012, May) Orioles Wisely Lock Up Adam Jones. Fangraphs. Retrived Novemer 7, 2013, from http://www.fangraphs.com/blogs/orioles-wisely-lock-up-adam-jones/
[8] Baseball Prospectus. (2013, May). The Lineup Card -Making the Case for Harper, Machado, or Trout. Baseball Prospectus. Retrieved November 7, 2013 from http://www.baseballprospectus.com/article.php?articleid=20734

 

 

Protect Your Bitcoin Wallet After You Die

Original Post Date: May 13, 2013 on thegenesisblock.com (now Tradeblock.com)

Estate planning is an essential consideration for everyone that has assets to pass onto their beneficiaries. Since bitcoin functions as a store of value, it is important to treat bitcoin similar to any other asset.

One of the goals of a bitcoin wallet owner is to secure his/her wallet so others cannot gain unwanted access to it. This security also prevents your loved ones and beneficiaries to gain access to your bitcoins in the event of your death unless you have planned for it. For this reason, it is very important to consider the options you have to plan for this situation. In this article, we’ll show you five different ways to solve this problem.

Create a copy of your bitcoin wallet file

Creating copies of a wallet file can allow for multiple people to have access to the same funds. This is the quickest and easiest method to pass your bitcoins on; however, it is also the least secure.

Advantages:

  • The entirety of your wallet is inherited by your beneficiary; not just specific addresses.
  • It is easy and quick to do.

Risks:

  • Whoever has a copy of your wallet file needs to be just as vigilant maintaining security of the file as the original owner. If access to your wallet file is gained by an untrusted 3rd party, all of the wallet’s funds can be stolen.
  • The beneficiary has access to your wallet at all times, so a great level of trust is needed between the original owner and the beneficiary.
  • Depending on the bitcoin client being used, the beneficiary will only have access to the addresses that were available when the wallet was copied.

M-of-N Transactions

Within the bitcoin protocol, there is the ability to send transactions where multiple signatures are required. M-of-N transactions are transactions where N parties are eligible to sign the transaction, but only M signatures are required to validate a transaction. One specific application of this is used in dispute mediation, where 3 parties are involved: the sender, the receiver, and the mediator. If the sender and the receiver agree to the transaction, the funds are sent to the receiver. If the sender or the receiver are not satisfied, they can see the dispute mediator and the mediator can sign off with whichever party it chooses based off the circumstances.

For estate planning purposes, you can send a transaction to your beneficiary that requires 2 of 3 parties to sign. The parties involved can be you, your beneficiary, and a 3rd party (e.g. a company that specializes in wills). If you pass away, your beneficiary and the 3rd party can sign and the bitcoins will transfer to your beneficiary. If you are still alive, your beneficiary signing it without the 3rd party will leave the transaction in an invalid state.

Advantages:

  • After your death, a will service company and your will executor make the decision to execute this order only after you die. (proof via death certificate, etc.)
  • The transaction type already exists in the bitcoin protocol, so it is easy to implement immediately. There is nothing stopping you from creating this transaction yourself.
  • M-of-N allows for more than just 3 parties. You can have as many parties’ signatures as you want.
  • Wallet security – The receiver of this transaction does not have access to the bitcoin wallet; only this transaction.

Risks:

  • The bitcoins would need to be “frozen” in this address.This method requires a sending address and receiving address to be written into the transaction. In order for this bitcoin transaction to be able to be validated in the future, the sending address can’t be used.
  • The parties involved need to secure their keys. If these keys are lost or compromised, the transaction may not be able to be validated in the future

Dead Man’s Switch

Expanding on the M-of-N solution, one of the parties in this type of transaction could be a computer server that verifies if a user-provided expression is true. This type of computer server is known as an oracle. The oracle has its own unique key and has the ability to sign a bitcoin transaction. The oracle can evaluate whether a person is dead or alive by checking death certificate databases. If it finds a death certificate for the person it is looking for, it will sign a transaction transferring the bitcoins to the beneficiary.

Not these oracles.

Not these oracles.

 

A very simplistic oracle example is a dead man’s switch. This program will email you at a specific interval asking if you are alive. If you are, you respond by clicking a link in the email. If not, the program will wait and email you again. If you don’t respond after a number of tries, the oracle will activate the switch and sign the transaction to transfer the bitcoins.

Advantages:

  • Wallet security – The receiver of this transaction does not have access to the bitcoin wallet; only this transaction.
  • The beneficiary simply has to broadcast the transaction. You don’t need any other parties to sign the transaction since it already has been signed when you created it.
  • The transaction type already exist in the bitcoin protocol, so it is easy to implement immediately. there is nothing stopping you from creating this transaction yourself.

Risk:

  • This method requires a sending address and receiving address to be written into the transaction. In order for this bitcoin transaction to be able to be validated in the future, the sending address can’t be used. This effectively means that these bitcoins would need to be “frozen” in this address.
  • If the granddaughter loses the transaction and cannot broadcast it, the bitcoins will never be transferred. The security of the transaction is of utmost importance.

Lock time transactions

A lock time transaction can be submitted to the network but won’t be accepted until the time specified on the transaction is valid. Think of this as post-dating your checks with a future date.

If a grandmother wants to leave an inheritance to her granddaughter, she can create a lock time transaction with a lock time of 1 year from the current date. The grandmother could broadcast the transaction right away but the nodes of the bitcoin system may decide to drop transactions that are locked to a date so far in the future. For this reason, the grandmother should sign the lock time transaction with her private key and provide the transaction to her granddaughter to broadcast to the bitcoin network when it is valid. If the grandmother is still alive when the transaction lock time is valid, the grandmother can cancel the validity of the transaction by transferring the bitcoins from one bitcoin address to another. Since the original lock time transaction is defined by specific input address/es and output addresses/es and a specific amount of bitcoins, changing the status of the input addresses/es will invalidate the transaction. At this point, the grandmother can create a new lock time transaction for 1 year from today. This cycle can be repeated until the grandmother passes away and the granddaughter broadcasts the valid lock time transaction to the bitcoin network and the bitcoins are transferred.

Advantages:

  • Bitcoin wallet security – The receiver of this transaction does not have access to the bitcoin wallet; only this transaction.
  • The beneficiary simply has to broadcast the transaction. You don’t need any other parties to sign the transaction since it already has been signed when you created it.
  • The transaction type already exist in the bitcoin protocol, so it is easy to implement immediately. there is nothing stopping you from creating this transaction yourself.

Risk:

  • This method requires a sending address and receiving address to be written into the transaction. In order for this bitcoin transaction to be able to be validated in the future, the sending address can’t be used. This effectively means that these bitcoins would need to be “frozen” in this address.
  • If the granddaughter loses the transaction and cannot broadcast it, the bitcoins will never be transferred. The security of the transaction is of utmost importance.

Shamir’s Secret Sharing

This is a form of secret sharing popular in the cryptography community. For the technical details, please see a white paper on it.

It is possible to divide a wallet file into N pieces so that to obtain the keys, all N pieces must be brought together. The individual can give out these pieces to people they trust (spouse, children, grandchildren, etc.) and upon the individual’s death, the pieces can be brought together to form the wallet. Once fully constructed, the wallet file can be used to transfer the bitcoins from the original owner to the beneficiary.

Divide your wallet into many pieces and then create a series of books and movies about it

Divide your wallet into many pieces and then create a series of books and movies about it

Needing all N pieces to form the wallet creates risk that one person could lose his/her piece, which means the wallet could never be rebuilt. Shamir’s Secret Sharing solves this all-or-nothing risk. Using Shamir’s Secret Secret, you can identify a certain threshold M that, if reached, will allow the wallet to be rebuilt. As an example, let’s say a wallet is broken into 11 pieces; the threshold may be set at 6, so that any 6 pieces brought together can build the wallet.

Advantages:

  • The beneficiaries will have access to the entire wallet; not just specific addresses.
  • By itself, each piece does not have the ability to gain access to the bitcoin wallet.
  • These secret pieces could be hidden and provide a fun adventure for your beneficiaries when you die.
Let’s search for bitcoin treasure!

Let’s search for bitcoin treasure!

Risk:

  • Depending on the bitcoin client being used, the beneficiary will only have access to the addresses that were available when the wallet was copied.
  • If enough of the parties provided secret pieces wish to access the funds prematurely, they can collude together and create the wallet and disburse the funds.
  • As of today, there are no companies that specialize in estate planning, so it is up to the individual. These options are not mutually exclusive; you can use one of them or multiple options at once. With 1 BTC valued at $100-150, you may wish to start thinking about this topic.

Bitcoin merchants: Paying rent and finding a date

Original Post Date: Apr 17, 2013 on thegenesisblock.com (now Tradeblock.com)

Bitcoin as a currency increases in utility as it becomes widely accepted and easy to use. As more and more people realize the inherent advantages of this modern currency, the number of merchants is growing every day. During the last week two major companies added bitcoin payments.

Paying your rent

Alvic Property Management, a property management company based in New York City, has begun accepting bitcoins as payment for rent and maintenance at their properties. Alvic specializes in cooperative, condo and multi-family properties in the New York real estate market.

Property Management Companies, or landlords, have been slow to accept new payment methods in my experience. When they do accept payment methods other than check or money order, typically they pass the costs of the alternate payment method onto the tenant. As an example, if you pay with a credit card, sometimes you will need to pay a 3% fee.

If only you could do something about the price of your rent

If only you could do something about the price of your rent

In their press release, there was a very important quote that strikes a chord with one of the major selling points of Bitcoin. Michael Lacsa, head of client relations, states that Alvic is “…always looking for ways to increase income while cutting expenses…” and “…Bitcoin provides this opportunity.” That quote right there is the one of the major drivers for why Bitcoin can succeed. Bitcoin lowers the transaction costs of transferring money from one party to another. The consumer wins. The merchant wins. As time goes on and more companies begin accepting bitcoins, expect to see this quote or a variation of it used when explaining their reason for entering into the Bitcoin payment system.

Finding a date

Not only will you be able to pay rent with bitcoin, but you will also be able to find a date with bitcoin. OkCupid, a popular online dating service, is now accepting bitcoins as payment from its premium users.

OKCupid’s CEO Sam Yagan appears to be a big Bitcoin supporter, going as far to say that “these digital currencies are going to be the future.” He explained that only a few people  asked him to accept bitcoins as payment at OKCupid; however, he believes this is only the beginning and he wants to be one of the early adopters from the merchant marketplace.

pbj_proposal.gif

This OK Cupid example shows that even a small amount of people requesting for bitcoin to be accepted as payment can have a huge impact. If you own bitcoins or believe in its future, please reach out to businesses you regularly transact with and ask them if they accept bitcoins. If they have not heard about it or are confused by what Bitcoin is, become an advocate for Bitcoin. Check out our Bitcoin 101 courses; these courses do not require you to know anything about Bitcoin going into them. These courses will help you explain to someone with no or limited knowledge of Bitcoin the basics of Bitcoin in laymen terms.

Tutorial: How to pay with bitcoins online?

Original Post Date: Apr 24, 2013 on thegenesisblock.com (now Tradeblock.com)

A frequent question people have about bitcoin is ‘what can I spend them on?’ There are many merchants that accept bitcoins, and this number is increasing every day. Since Bitcoin was first adopted by the tech community, spending bitcoins on electronic equipment seems like a good place to start. I needed a new computer monitor and I thought this would be a perfect opportunity to document my transaction and share it with you.

I decided to search through Bitcoinstore.com, an online retailer that only accepts bitcoins as payment.  Bitcoinstore.com functions similarly to other online retailers (Newegg.com, Amazon.com, etc.); you can select from different categories, search for a specific product, filter based on price, etc. All prices are listed in USD and BTC; the price in bitcoins is calculated in real-time from the current USD-equivalent market price.

Again, using Bitcoinstore.com is similar to every other online retailer. I click the “Add to Cart” Button

Click on the “Checkout” button on the Shopping Cart tile. This will begin the checkout process. You have the option to create an account or you can checkout as a guest. As you can tell, a pattern is emerging here. Commerce via Bitcoin, in most cases, will be exactly like what we are all accustomed to.

Alright, now we arrive at the point where a Bitcoin transaction differs from a typical online transaction. For Bitcoinstore,com, there is only one payment option – bitcoins. The user selects “bitcoins” and is presented with the following instructions.

You are instructed to send X.XXXX bitcoins to a specific bitcoin address. This address is unique to your order. This allows the merchant to verify exactly when a payment is initiated. With these instructions, there are actually 3 different options you can take to send bitcoins depending on what kind of wallet you’re using. For information about wallets and bitcoin storage, check out our Bitcoin 101 course on Bitcoin Storage. Option 1 – Wallet is stored within a software client on your computer – For this option, simply send X.XXXX bitcoins to the bitcoin address listed. Option 2 – Wallet is stored on a mobile app on your phone – For this option, you can scan the QR code and send the proper amount of bitcoins. Option 3 – If you have an account with BitPay, you can click on the “Click to Pay” button and follow the instructions Once the transaction is sent out to the bitcoin network, Bitcoinstore.com will recognize it and automatically finalize the order.  

You are instructed to send X.XXXX bitcoins to a specific bitcoin address. This address is unique to your order. This allows the merchant to verify exactly when a payment is initiated. With these instructions, there are actually 3 different options you can take to send bitcoins depending on what kind of wallet you’re using. For information about wallets and bitcoin storage, check out our Bitcoin 101 course on Bitcoin Storage.

Option 1 – Wallet is stored within a software client on your computer – For this option, simply send X.XXXX bitcoins to the bitcoin address listed.
Option 2 – Wallet is stored on a mobile app on your phone – For this option, you can scan the QR code and send the proper amount of bitcoins.
Option 3 – If you have an account with BitPay, you can click on the “Click to Pay” button and follow the instructions
Once the transaction is sent out to the bitcoin network, Bitcoinstore.com will recognize it and automatically finalize the order.

 

It’s as easy as that. Spending bitcoins with an online merchant is can be just as easy as buying anything else online. The real difference comes at the end when you go to the pay the bill. Instead of inputting your credit card number or logging into paypal, you simply go to your wallet to send the funds.

Good luck with your purchases, and feel free to share your experiences using bitcoin stores.

History of Bitcoin

Original Post Date: Apr 7, 2013 on thegenesisblock.com (now Tradeblock.com)

The origin of Bitcoin is shrouded in mystery. We know the concept of Bitcoin was first released to the world in October 2008 via a white paper and that this white paper was written by Satoshi Nakamoto. However, no one knows who Satoshi Nakamoto is. He could be one person or a group of people. There have been investigations trying to find Nakamoto, but there have been no confirmations yet.

A few months later, on January 3, 2009, the Bitcoin system explained in Satoshi’s white paper came to life. The first Bitcoins in existence were released to the world in the first block, the Genesis Block (it’s where our blog’s name comes from as well). A block is a file that has a recording of all recent Bitcoin transactions. Each block is appended to the previous history of blocks. All of these blocks together form what is called the blockchain. Think of the blockchain as a ledger of every Bitcoin transaction to ever happen. Bitcoin Block Explorer provides real-time information about the current transactions on Bitcoin and allows you to explore the entire Blockchain.

In our current world, nearly all currencies (US Dollar, Euro, Yen, etc.) are controlled by a central bank. In these currencies – called fiat currencies – the government controls when and how many units of money to release to the overall money supply. Bitcoin is designed around the idea that the money supply does not need to be decided by these central banks and governments.

With Bitcoin, there is an algorithm that defines how much currency will be created and the rate of creation. For the first 4 years of its existence, 50 new Bitcoins were created roughly every 10 minutes. After 4 years, that rate will be halved (1st 4 years = 50 coins/10 minutes, 2nd 4 years = 25 coins/10 minutes, 3rd 4 years = 12.5 coins/10 minutes, and so on). This decaying rate of Bitcoin creation yields a maximum of 21,000,000 Bitcoins.

As interest in Bitcoin has spread, more and more inventions revolving about Bitcoin have been imagined and created. One of the most important creations was an online Bitcoin exchange (Mt Gox , Bitfloor ) where you can exchange established world currencies (US Dollar, Euro, Yen, etc.) for Bitcoins and vice versa. Think of this as a currency exchange booth at the airport that you use when you travel overseas. In Bitcoin’s case, the exchange is online and it is used to exchange well-known currencies (USD, Euro, Yen, etc.) into Bitcoins or to trade your Bitcoins in for USD, Euro, Yen, etc.

The number of retailers that accept Bitcoins has been growing steadily; the most notable of these retailers, as of the writing of this post, is WordPress and Reddit. As Bitcoin grows in popularity, more and more retailers will accept Bitcoins.

The Bitcoin protocol is well established, so the rules for Bitcoin creation and payment transactions will not change much, however, there is much opportunity for development outside of this protocol. The developments by third-party Bitcoin businesses is where the majority of the innovation will come from. As of this writing, there are many companies creating new and innovative ways to use and exchange Bitcoins, such as Bitcoin wallets on your cell phones and Bitcoin ATMs (where you can can deposit USD, Euro, Yen, etc. into the machine and your wallet is credited with Bitcoins and also withdraw Bitcoins from your wallet and exchange them for the local currency). These innovations are only scratching the surface of the potential of Bitcoin.

Bitcoin is still in its very early stages of existence and no one knows what the future will hold. We, here at The Genesis Block, will be updating our audience with Bitcoin’s history as it is happening in real-time. It is a very exciting time for Bitcoin and we hope to enjoy the ride with you.

Bitcoin Involvement

Back in 2012-2013, I was heavily involved in the Bitcoin community. Along with two of my friends, we started a Bitcoin blog called The Genesis Block. I wrote under the pseudonym Wayne Parker, which was a combination of Bruce Wayne and Peter Parker. This blog ultimately spun off into a real start-up called Trade Block; however, I didn't follow the others on this path.

While my work is still featured on their blog, I wanted to take this opportunity to share the links and ultimately, I will re-publish my blog posts on this site for posterity purposes.

History of Bitcoin
Apr 07, 2013

Bitcoin merchants: Paying rent and finding a date
Apr 17, 2013

Tutorial: How to pay with bitcoins online?
Apr 24, 2013

Protect Your Bitcoin Wallet After You Die
May 13, 2013

RemoteU - Hacking Medicine Pitch Deck

A few weeks ago I participated in a Hacking Medicine Hackathon here at MIT. I worked with a team of young engineers who are MIT undergrads. It was an amazing experience with such bright, young minds. For our project, we focused on the long-term care services market with the aim to make the life of elderly people and their families better by facilitating more interaction between them.

As always, I'd love to hear any feedback you have. Please leave me a comment!

The Daily You - Machine learning geared towards your communications flow

I recently put together a start-up funding deck for an idea that I have been developing with another Sloanie. This deck was used for my communications class and it leverages some graphics/ideas from the Hacking AI Slide Deck that I was involved with last month. 

The idea was born from me being inundated with information from the many communication channels that I use in 2016 (Whatsapp, Slack, Email, Facebook, Twitter, Instagram, School Groups, etc). I had missed some important events that I was very interested in and the only reason I missed them was because I couldn't stay on top of my massive communication inflow.

If you have any comments or feedback, I'd love to hear it. Please leave a comment below.

Hacking AI with IBM Watson Event - September 26, 2016

I participated in my first Hackathon ever - Hacking AI with IBM Watson.  I was able to interact with IBM Watson, which was incredible!  

On September 23, IBM Watson will provide their best engineers and technology to demo their Cognitive Computing capabilities and API. Diverse teams of 3-6 people will form to take advantage of IBM Watson technology, engineering, design, and business skills to solve a challenge of your choice.

My team consisted of 3 MBA students (myself, Malli Gupta, and Randy Capocasale), a MBA Fellow (Aejaz Zahid) and an Integrated Design and Management (IDM) Graduate student (Jin Wu).

Here is the slide deck for the idea we developed. It is a productivity tool that consolidates and schedules events by leveraging AI/Machine Learning APIs from IBM Watson (Natural Language Classifier, Text-to-Speech, Speech-to-Text).

Squarespace only lets you embed images so I had to convert our powerpoint presentation into jpeg files. I'd thought I'd share how to do this since I had to figure out this functionality in Microsoft Powerpoint.

  1. After opening up the PPT file you wish to export to jpeg images, click File -> Save As.
  2. Click browse to identify the folder you want to save the jpeg files to
  3. Click on "Save as type:" drop-down and select "JPEG File Interchange Format"
  4. It will prompt you to decide between all slides or just this one slide.
  5. Select "All slides"
  6. Powerpoint will notify you that "Each slide in your presentation has been saved as a separate file in the folder XXXX.