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The system is designed in such a way that the mining rate of one block every 10 minutes will be maintained (over the long term average) regardless of how many miners are in operation or what their hashing capability is (over a very wide range). This has worked so far. As miners drop out, the difficulty will likely reduce, meaning that the probability of any one miner getting a reward increases. It doesn't really work the way you think it does.

It is not "progressively harder with time." The hardness is adjusted to maintain a constant mining rate which is independent of hashing power on the network.

It might be a good idea to read the whitepaper which is only 9 pages long.

https://bitcoin.org/bitcoin.pd...

Not exactly. The feedback operates to adjust the difficulty of mining. The way it works is that if blocks are mined faster than once every 10 minutes (on average), the difficulty is increased slightly. If it takes longer than 10 minutes, the difficulty is reduced slightly. As machines go offline due to poor profitability, the difficulty will likely have to decrease to keep the mining rate constant. This has pretty much worked as designed over the inception of bitcoin. Despite all the hash power people have thrown at bitcoin, the rate of new block creation has stayed consistent on average. The difficulty is not updated super often. Here is a chart of difficulty vs time.

https://bitinfocharts.com/comp...

How much bitcoin you get for mining a block (the reward) is pre-determined by the implementation. It goes down by half every so often. Currently, the reward is 12.5 bitcoin. The "reward" represents the creation of new bitcoin. Once all bitcoins are mined, the reward will be zero. In addition to the reward, miners also collect fees from all the transactions contained in the mined block. Eventually, the only incentive to mine bitcoin will be to collect the transaction fees.

If you haven't already read the whitepaper, I recommend it. It is not that long, and not that difficult to understand for people familiar with hashes and cryptography and whatnot. It is 9 pages.

In my opinion, most coverage of bitcoin, even in the technical press, is woefully uninformed. The ONLY reason bitcoin takes so much energy to maintain is because the price rose so high, and the difficulty therefore increased. Now, as some of the mania is dying off, things should be a lot more sane, and non-profitable miners will bow out.

https://bitcoin.org/bitcoin.pd...

Most things can be explained very simply

"For every complex problem there is a simple solution that is wrong."

If you can handle the technical side:

• The original whitepaper that started it
• Mastering Bitcoin
• Bitcoin Source Code

That's all you need.



To address your other points:

Sidechains are divorced from the block so require other layers of trust and are therefore not blockchain.

You're absolutely right. Blockchain was only one of the inventions in the whitepaper. The system doesn't work with it alone. And if you can replace the buzzword "blockchain" with "database" in an application, it's not interesting and adds little to no value.

51% attack is completely possible, in 2 cases especially. ...

Right again. Bitcoin may not be what fintech applications are written on in ten years. But it will be a cryptocurrency that is trust-less, fungible, censorship resistant, immutable, peer to peer, and open. Bitcoin introduced decentralized security through computation that can operate in highly hostile environments. It is currently the most "anti-fragile" cryptocurrency because of size, but another may take its place.

Only 3 of the top 4 pools need to conspire to further their own self interest

This attack has been tried and will be tried again. It's a long story, but the current result is a fork called "Bitcoin Cash". So far it hasn't gained the same traction as the original "Bitcoin".

even if they are able to disrupt the network for their own purposes with 30% of the hash rate

Has most likely been tried very recently. Many suspect that spam transactions that drove transaction rates up for many weeks were exactly this. Transaction rates are lower again. These attacks are very expensive to continue. They require an immense amount of electricity.

Maybe there is a simply a spam attack possible that delays all transactions for many hours or days.

same as above

Maybe there is a trust attack where proof appears from multiple sources.

You mean a Sybil attack. Currently highly unlikely based on how the code works. Read through the source code.

When does a classic man in the middle attack become 'worth it', impersonate the work originator.

If you're talking about the network, it doesn't. With the amount of electrical power required, it's always much more profitable to simply mine bitcoin.

If you're talking about individuals, many are doing this right now and draining people's wallets. It's one user at a time. It does not affect the whole network. Crypto allows the user to be their own bank. This carries significant risks at the moment. I wouldn't recommend it to the masses yet.

if its not regulated out of use by governments in short order anyways

Some governments can make it go underground (like in Venezuela). But it's impossible to stop (like in Venezuela). Unless you destroy every computer on the planet that runs a full bitcoin wallet.


I encourage you to be skeptical. Be highly skeptical. If you dig into it, you'll see that your ideas on compromising this system are not new. You'll find a multitude of other attacks that have been accounted for as well. Bitcoin has been under attack since day 1.

It is actually fun the minimal amount of people who know the very least what they are talking about on all these comments.

While you are no troll, and express a legitmate doubt, bitcoin and each of the other crypto-currency coins are not "I think that", rather, their behavior are carefully described in documentation and implemented in code. In the case of bitcoin, this is addressed in a very prominent way in the whitepaper that defined the protocol - https://bitcoin.org/bitcoin.pd... (just ctrl+f for "difficulty").

On the software implementation itself, however, this is mostly interesting: since the whole blockchain thing is based on cryptographical hashes, "mining" a block comprises exactly of assembling a block which hashes to a number that is _lower_ than the current difficulty. And the difficulty is simply an unsigned 256 bit integer that gets closer to zero the higher the difficult is. The information that composes a block are the picked transactions that are taking place and couple fields the miners can change in the block headers. The first one to get a full block with transactions + all headers that hashes lower than the current difficult just "mined" the block.
And this difficult number is set in the protocol to be adjusted every two weeks or so.

You are confounding that with the rewards for each block, which halve every 4 years, which is were the 21 million bitoin to be ever created amount come from: at a certain point, when the halving takes place, the block reward will be smaller than the smallest bitcoin fraction (1/ 100 million biticoin = 1 satoshi). From these, 16 million have already been created.

Bitcoin Releases Version 0.3
Posted by kdawson on Sunday July 11, 2010 @09:09PM from the nobody-to-prosecute dept.
Teppy writes
"How's this for a disruptive technology? Bitcoin is a peer-to-peer, network-based digital currency with no central bank, and no transaction fees. Using a proof-of-work concept, nodes burn CPU cycles searching for bundles of coins, broadcasting their findings to the network. Analysis of energy usage indicates that the market value of Bitcoins is already above the value of the energy needed to generate them, indicating healthy demand. The community is hopeful the currency will remain outside the reach of any government."
Here are the FAQ, a paper describing Bitcoin in more technical detail (PDF), and the Wikipedia article. Note: a commercial service called BitCoin Ltd., in pre-alpha at bitcoin.com, bears no relation to the open source digital currency.

WikiLeaks, Money, and Ron Paul
Posted by Soulskill on Sunday December 12, 2010 @01:16PM from the headlines-that-will-make-some-people-mad dept.
Another day, another dozen WikiLeaks stories, several of which revolve around money. PayPal has given in to pressure to release WikiLeaks funds, though they still won't do further transactions. Mobile payment firm Xipwire is attempting to take PayPal's place. "We do think people should be able to make their own decisions as to who they donate to." PCWorld wonders if the WikiLeaks' money woes could lead to great adoption of Bitcoin, the peer-to-peer currency system we've discussed in the past. Meanwhile, Representative Ron Paul spoke in defense of WikiLeaks on the House floor Thursday, asking a number of questions, including, "Could it be that the real reason for the near universal attacks on WikiLeaks is more about secretly maintaining a seriously flawed foreign policy of empire than it is about national security?" The current uproar over WikiLeaks has prompted Paul Vixie to call for an end to the DDoS attacks and Vladimir Putin to break out a metaphor involving cows and hockey pucks.

Online-Only Currency BitCoin Reaches Dollar Parity
Posted by timothy on Thursday February 10, 2011 @06:59PM from the computationally-intensive dept.
IamTheRealMike writes
"The BitCoin peer to peer currency briefly reached exchange parity with the US dollar today after a spike in demand for the coins pushed prices slightly above 1 USD:1 BTC. BitCoin was launched in early 2009, so in only two years this open source currency has gone from having no value at all to one with not only an open market of competing exchanges, but the ability to buy r

Bitcoin Releases Version 0.3
Posted by kdawson on Sunday July 11, 2010 @09:09PM from the nobody-to-prosecute dept.
Teppy writes
"How's this for a disruptive technology? Bitcoin is a peer-to-peer, network-based digital currency with no central bank, and no transaction fees. Using a proof-of-work concept, nodes burn CPU cycles searching for bundles of coins, broadcasting their findings to the network. Analysis of energy usage indicates that the market value of Bitcoins is already above the value of the energy needed to generate them, indicating healthy demand. The community is hopeful the currency will remain outside the reach of any government."
Here are the FAQ, a paper describing Bitcoin in more technical detail (PDF), and the Wikipedia article. Note: a commercial service called BitCoin Ltd., in pre-alpha at bitcoin.com, bears no relation to the open source digital currency.

WikiLeaks, Money, and Ron Paul
Posted by Soulskill on Sunday December 12, 2010 @01:16PM from the headlines-that-will-make-some-people-mad dept.
Another day, another dozen WikiLeaks stories, several of which revolve around money. PayPal has given in to pressure to release WikiLeaks funds, though they still won't do further transactions. Mobile payment firm Xipwire is attempting to take PayPal's place. "We do think people should be able to make their own decisions as to who they donate to." PCWorld wonders if the WikiLeaks' money woes could lead to great adoption of Bitcoin, the peer-to-peer currency system we've discussed in the past. Meanwhile, Representative Ron Paul spoke in defense of WikiLeaks on the House floor Thursday, asking a number of questions, including, "Could it be that the real reason for the near universal attacks on WikiLeaks is more about secretly maintaining a seriously flawed foreign policy of empire than it is about national security?" The current uproar over WikiLeaks has prompted Paul Vixie to call for an end to the DDoS attacks and Vladimir Putin to break out a metaphor involving cows and hockey pucks.

Online-Only Currency BitCoin Reaches Dollar Parity
Posted by timothy on Thursday February 10, 2011 @06:59PM from the computationally-intensive dept.
IamTheRealMike writes
"The BitCoin peer to peer currency briefly reached exchange parity with the US dollar today after a spike in demand for the coins pushed prices slightly above 1 USD:1 BTC. BitCoin was launched in early 2009, so in only two years this open source currency has gone from having no value at all to one with not only an open market of competing exchanges, but the ability to buy r

Bitcoin Releases Version 0.3
Posted by kdawson on Sunday July 11, 2010 @09:09PM from the nobody-to-prosecute dept.
Teppy writes
"How's this for a disruptive technology? Bitcoin is a peer-to-peer, network-based digital currency with no central bank, and no transaction fees. Using a proof-of-work concept, nodes burn CPU cycles searching for bundles of coins, broadcasting their findings to the network. Analysis of energy usage indicates that the market value of Bitcoins is already above the value of the energy needed to generate them, indicating healthy demand. The community is hopeful the currency will remain outside the reach of any government."
Here are the FAQ, a paper describing Bitcoin in more technical detail (PDF), and the Wikipedia article. Note: a commercial service called BitCoin Ltd., in pre-alpha at bitcoin.com, bears no relation to the open source digital currency.

WikiLeaks, Money, and Ron Paul
Posted by Soulskill on Sunday December 12, 2010 @01:16PM from the headlines-that-will-make-some-people-mad dept.
Another day, another dozen WikiLeaks stories, several of which revolve around money. PayPal has given in to pressure to release WikiLeaks funds, though they still won't do further transactions. Mobile payment firm Xipwire is attempting to take PayPal's place. "We do think people should be able to make their own decisions as to who they donate to." PCWorld wonders if the WikiLeaks' money woes could lead to great adoption of Bitcoin, the peer-to-peer currency system we've discussed in the past. Meanwhile, Representative Ron Paul spoke in defense of WikiLeaks on the House floor Thursday, asking a number of questions, including, "Could it be that the real reason for the near universal attacks on WikiLeaks is more about secretly maintaining a seriously flawed foreign policy of empire than it is about national security?" The current uproar over WikiLeaks has prompted Paul Vixie to call for an end to the DDoS attacks and Vladimir Putin to break out a metaphor involving cows and hockey pucks.

Online-Only Currency BitCoin Reaches Dollar Parity
Posted by timothy on Thursday February 10, 2011 @06:59PM from the computationally-intensive dept.
IamTheRealMike writes
"The BitCoin peer to peer currency briefly reached exchange parity with the US dollar today after a spike in demand for the coins pushed prices slightly above 1 USD:1 BTC. BitCoin was launched in early 2009, so in only two years this open source currency has gone from having no value at all to one with not only an open market of competing exchanges, but the ability to buy r

Bitcoin Releases Version 0.3
Posted by kdawson on Sunday July 11, 2010 @09:09PM from the nobody-to-prosecute dept.
Teppy writes
"How's this for a disruptive technology? Bitcoin is a peer-to-peer, network-based digital currency with no central bank, and no transaction fees. Using a proof-of-work concept, nodes burn CPU cycles searching for bundles of coins, broadcasting their findings to the network. Analysis of energy usage indicates that the market value of Bitcoins is already above the value of the energy needed to generate them, indicating healthy demand. The community is hopeful the currency will remain outside the reach of any government."
Here are the FAQ, a paper describing Bitcoin in more technical detail (PDF), and the Wikipedia article. Note: a commercial service called BitCoin Ltd., in pre-alpha at bitcoin.com, bears no relation to the open source digital currency.

WikiLeaks, Money, and Ron Paul
Posted by Soulskill on Sunday December 12, 2010 @01:16PM from the headlines-that-will-make-some-people-mad dept.
Another day, another dozen WikiLeaks stories, several of which revolve around money. PayPal has given in to pressure to release WikiLeaks funds, though they still won't do further transactions. Mobile payment firm Xipwire is attempting to take PayPal's place. "We do think people should be able to make their own decisions as to who they donate to." PCWorld wonders if the WikiLeaks' money woes could lead to great adoption of Bitcoin, the peer-to-peer currency system we've discussed in the past. Meanwhile, Representative Ron Paul spoke in defense of WikiLeaks on the House floor Thursday, asking a number of questions, including, "Could it be that the real reason for the near universal attacks on WikiLeaks is more about secretly maintaining a seriously flawed foreign policy of empire than it is about national security?" The current uproar over WikiLeaks has prompted Paul Vixie to call for an end to the DDoS attacks and Vladimir Putin to break out a metaphor involving cows and hockey pucks.

Online-Only Currency BitCoin Reaches Dollar Parity
Posted by timothy on Thursday February 10, 2011 @06:59PM from the computationally-intensive dept.
IamTheRealMike writes
"The BitCoin peer to peer currency briefly reached exchange parity with the US dollar today after a spike in demand for the coins pushed prices slightly above 1 USD:1 BTC. BitCoin was launched in early 2009, so in only two years this open source currency has gone from having no value at all to one with not only an open market of competing exchanges, but the ability to buy r

https://bitcoin.org/en/develop...

What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

While not explicitly stated as a goal in Satoshi's paper, the system was designed to be decentralized in order to protect its integrity.

The fact of the matter is that one cannot (for all practical purposes) transact in bitcoin without using a trusted third party, and that mining has become highly centralized. In this respect, one can only conclude that bitcoin is an abject failure when it comes to it's stated objectives. If anything, bitcoin proved that trusted intermediaries are a requirement for any system of electronic currency.

Or you can read Nakamoto's paper which says things like "What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party." -- and which then goes on to describe a system which solves that problem.

Because bitcoin is not anonymous?

Avoiding card charges isn't what bitcoin was originally marketed for. "Privacy" was its main thrust.

Sigh. You have it exactly backwards.

Read the Satoshi paper. Avoiding the need for trusted intermediaries (i.e., banks/card companies) when processing electronic transactions over the internet was what bitcoin was originally "marketed" for.

Privacy is mentioned in the paper, but only in so much as to show that the system might actually afford less privacy than the traditional banking model.

The value of bitcoin has value because private entities with fiat currency is backing it.

No, I say again: bitcoin has value because you can buy stuff with it, and its value is measured in terms of what you can buy (including other currencies.)

Support from any entities (public or private) does not create that value -- it merely helps to stabilize it.

There's more about why bitcoin has value in the bitcoin FAQ.

Strictly speaking, every currency is a fiat currency because we decide what it's worth based on how we feel about either it, or what's backing it.

On this, we agree. But note the "or" in your sentence.

I once heard someone describe bitcoin as a "collective hallucination" that assigns a value to an abstract concept. But in the next sentence, the same person said that all currencies are the same kind of collective hallucination.

They're at it again. Bitcoin XT/Unlimited/Classic developers are shilling emotionally charged rhetoric declaring the failure of Bitcoin. These blog posts are promoted by their connections in the (((international media))) to try to spread fear, uncertainty, and doubt around the status of Bitcoin and bully people into accepting their suicidal "solutions" to problems that don't really exist involving block size limits.

Histrionic whining on Medium and Reddit is not the proper way to present engineering solutions. Their campaign looks more like some sort of intelligence operation than a patch submission. There's a reason for this: it is.

I have a lot of skin in the game on this issue. I am a target of the United States government, and as such I have a very hard time receiving money. It doesn't matter that I have left the United States because of continuing persecution there. Their control over wire transfers between all countries with Rothschild banks is complete. The United States seizes money on lawful transactions between EU states over things as insignificant as Cuban cigars, despite none of the countries involved participating in the US embargo against Cuba. I've had my bank accounts, payment processing services, and brokerage accounts shut off. Bitcoin is the only way I can engage with any financial services. If it is centralized and subject to controls similar to SWIFT wires and credit card processing, my continued existence would no longer be feasible. Bitcoin is the the most important development in human rights in centuries.

Here's the facts: Gavin Andresen and Mike Hearn want you to switch to something called Bitcoin XT or Bitcoin Unlimited or some other fork of Bitcoin that is under unilateral control so that they can centralize Bitcoin to a dangerous degree-- enough to put it under the control of a government hostile to liberty like the United States. While they do this, they hilariously complain about "oppression" and "censorship" on forums that clean away their bullshit altcoin spam postings.

There are two likely incentives for doing this:
1) They have placed short positions against Bitcoin.
2) They are funded by people that wish to see Bitcoin less free.

Now reflect for a moment that the only major industry supporter of the Bitcoin XT proposal is Coinbase whose gigantic series C round was lead by the New York Stock Exchange. I doubt their financial interests are aligned with a free and unregulated global marketplace.

The good news is that they seem to have lost most of this battle. Consensus on the network is determined by the nodes people run on it. Bitcoin XT only has about 500 nodes. Bitcoin Core, the real Bitcoin software, has about ten times that. The majority of the mining capacity is in China, and Chinese people have little incentive to centralize Bitcoin for the convenience of US intelligence and enforcement organizations. So I must celebrate China's shrewd rejection of XT today.

If you love liberty you should call XT's shilling and spamming out for what it is. If you are invested in Bitcoin you also must do so. If XT gets their way and centralizes Bitcoin, Bitcoin will lose its primary feature of freedom from centralized authorities and thus lose its source of value. You can also support Bitcoin's continued freedom by running a full Bitcoin Core node, and buying and saving Bitcoin.

Bitcoin transaction fees going up is not the end of the world. It's good for miners, and necessary to protect a limited resource like space on the blockchain. I'm willing to pay higher fees to see Bitcoin stay free from government control (and we're literally talking transaction fees of a few extra cents here), and everyone else who loves Bitcoin should be so willing as well.

Wasn't "Satoshi Nakamoto" an unknown author before publishing "Bitcoin: A Peer-to-Peer Electronic Cash System"?

Or am I missing a joke?

Which can only be true if Bitcoin serves its intended purpose as a useful store of value.

Intended purpose? There is absolutely no mention of "store of value" in the Satoshi paper.

There's a lot of people like you who want to claim this or that as the "intended purpose" of bitcoin...you comprise an endless parade of ideologues trying to hijack a revolutionary idea and fit it into your preconceived notions of how the world works. Sad.

https://bitcoin.org/en/you-nee...

Lots of things work in theory but not practice.

To be "anonymous" with Bitcoin, you basically have to use a different address for every single transaction, and never cash out.

To be anonymous with Dollars, you... pay for stuff with Dollars, and you don't have to use a different wallet every time you buy something.

Cash wins.

https://bitcoin.org/en/you-nee...

Bitcoin is not anonymous

  All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address.

Yea, yea, I know the paragraph goes on to state that each address should only be used once for that reason, but since we're talking about ubiquitous acceptance - Dude. C'mon. We can't even get the Normals to use GPG on their emails, you really expect them to use a different, difficult-to-remember address for every single transaction they make?

Meh, I'll stick to cash.

Bitcoin used a vulnerable version of OpenSSL and required an update to Bitcoin Core to stop it from revealing the contents of it's memory to a remote attacker. That is why 0.9.1 came out in such short order after the disclosure of the Heartbleed vulnerability. See the Bitcoin Foundation's website: Heartbleed

But all the early-adopters / ponzi-schemers kept insisting that it was impossible.

No one except trolls like you claims that 51% attack is impossible, on the contrary, the danger of it is explicitly mentioned even in the original bitcoin white paper. Maybe you should read it before spreading misinformations:

Proof-of-work is essentially one-CPU-one-vote. The majority
decision is represented by the longest chain, which has the greatest proof-of-work effort invested
in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the
fastest and outpace any competing chains. To modify a past block, an attacker would have to
redo the proof-of-work of the block and all blocks after it and then catch up with and surpass the
work of the honest nodes. We will show later that the probability of a slower attacker catching up
diminishes exponentially as subsequent blocks are added.

https://bitcoin.org/bitcoin.pd...

...Bitcoin will not fulfill its promise: keeping cash flow untaxable, allowing people to hold on to their hard-earned income instead of the state taking it away from them at gunpoint.

Bitcoin makes no such promises. The only "promises" (goals, really) bitcoin purports to make are centered around the current trust-based model of payment processing and it's unnecessarily high transaction costs. Only people (like you, apparently) with an agenda/ax to grind believe bitcoin promises anything else.

Maybe I'm confused, but it sounds to me like what 'DarkMarket' is doing is irrevocably marking some transactions as being associated with DarkMarket. That strikes me as much like writing 'I was used to buy drugs' on a $50 note except that someone can check the entire transaction history of the $50 note back to the beginning of time.

I guess it will be interesting for researchers assess the proportion of BC that is being used for dubious purposes (unless you actually believe things like 'banned books' are going to be traded on DarkMarket except at the very margins), and feds who want to find people selling drugs (because BC itself is not anonymous).

Bitcoin doesn't really work like that. A bitcoin is a generation event plus a chain of transactions, it's not a chunk of self contained data. You can read the original paper for the details.

https://bitcoin.org/bitcoin.pd...

Mod this up - the link has factual information instead of the typical OMG Ponies! bitcoin commentary..

The ledger and the mining process are not separate things. Each ledger entry has a generation of 25 coins plus a long list of transactions affecting existing coins. You need to generate a hash within strict conditions in order to create a valid ledger block and the difficulty of that task adjusts to ensure a consistent block generation rate.

The original paper will explain all this better than I ever could.

https://bitcoin.org/bitcoin.pd...

Bitcoin doesn't really work like that. A bitcoin is a generation event plus a chain of transactions, it's not a chunk of self contained data. You can read the original paper for the details.

https://bitcoin.org/bitcoin.pd...

Regarding binary and source code distribution, there's nothing to fix really - both source and binaries are already protected by X.509 certificates by virtue of being hosted on SSL-using websites: https://www.mail-archive.com/b... Secondly PGP keys are hosted on https://bitcoin.org/ which gives users a manual way to get them securely, verified by X.509. We should check that certificate pinning is being used, and it'd be good to have a second code repo beyond github, but we're in pretty good shape already. I'm willing to call a spade a spade: Mike's loud pronouncement about how this is proof that PGP sucks is trolling.

As for payment authentication, keep in mind I'm a consultant. I act as official Chief Scientist for Mastercoin, and unofficial "chief scientist" for a whole bunch of other projects. My job is to advise other people who are doing the actual work; if I tried to fix everything directly myself I'd be wasting my time. Heck, right now I'm writing an (private) email outlining some ideas on the specifics of OpenPGP/X.509 integration to one of my clients and I expect we'll start to see this stuff get actually implemented in the future. It won't be my code, but I'm happy to have done my part in guiding others building secure systems.

"Bitcoins are like cash."

I really REALLY wish people would stop saying this

Uhhh, I hate to break it to you, but...

> Not sure if there is any way to possibly verify this.

I dunno, teach yourself a bit of cryptography and read the fine paper, may be?

> The real problem here is the notion that bitcoin is a currency.

Yeah, where would all these morons get a stupid idea like that? Oh, right...

"Bitcoin is... a new kind of money."

That is LITERALLY the first thing they say, front and center at the top of their home page, following only their logo and nav links.

> The same things that make gold less than idea as
> an actual currency (or a backer to a currency) apply
> to bitcoin.

If people want to steal my gold, they at least need to know a) that I have it, b) where I keep it, and then c) come and get it, in person, by force.

To play Bitcoin, you have to trust your Bitcoin exchanges.

Simply incorrect. You could "play" Bitcoin easily without ever touching an exchange. Exchanges are used to... well exchange other currencies for Bitcoin. You can still provide goods and services for bitcoin, purchase goods and services with bitcoin, or mine bitcoin, without ever touching an exchange.

Also, the real issue with MTGox's collapse was not that it was a popular exchange, it was all the people who lost bitcoin because they were storing it there. Storing your money in an online wallet is not required. There's several software wallets, and the source code for the protocol is available so you could even write your own if you'd like.

There may be issues with Bitcoin (deflationary, monopolized network, etc) but lack of regulation in exchanges is a problem manufactured by people that don't really understand the currency.

Perhaps - at the present, it is 14 GB (source: https://blockchain.info/charts...)
BUT, to have a bitcoin wallet and participate in bitcoin commerce, it's not required to have a local copy of the blockchain.
Further, if you look at the original whitepaper ( https://bitcoin.org/bitcoin.pd... ) you'll see section 7 has an explanation of how sufficiently old transactions COULD be removed from the blockchain without corrupting the hash of each bitcoin.

I just read a very interesting article, that proposes the thought that BitCoin is not money, it's the internet of money. If the writer is correct, bitcoin's protocol and scripting system has the potential to break every government's (and banking system's) monopoly on the control of financial transactions. It could have a similar effect on financial transactions to the effects HTML and HTTP have had on information 'ownership' and transfer. IOW, their business models may have already been sunk. This has enormous unintended - really unknown - consequences.

For those who have not read the original Sakamoto Bitcoin paper, see Bitcoin: A Peer-to-Peer Electronic Cash System. According to my company's head, who _really_ knows this stuff, almost nothing you read about Bitcoin is really correct - this paper lays it all out in very concise, complete detail. And he agrees (at least in principle) with the first article.

As for my particular interest in space development and space commerce, the bitcoin protocol may be one of the enabling technologies for space commerce, as it allows provable transactions and related actions over a remote data link - no need to ship a piece of paper, or a fax, to confirm a contract.

Let's hear you explain why it is.

Here is Satoshi's original whitepaper, and the source code to the main Bitcoin client is available here. Please point to the bits where it tries to scam you.

1) Enough already. I hear so much hype about it, it's almost as bad as the never-ending election coverage I have to suffer through for 18 months before the elections. I know about it, am not interested, and would rather not see reminders about it every-fucking time I blink.

Just set-up blacklist on "bitcoin" tag in your preferences and you want be bothered anymore.

2) It over-promises and under-delivers (at least as reported on in every story I read, and implemented in the real world). A world changing innovation that will revolutionize currency and break our dependence on evil national governments and usher in a new era.... except that it won't because it's so fundamentally broken on so many levels.

Can you quote some real promises from bitcoin.org website or from the original http://bitcoin.org/bitcoin.pdf whitepaper which are not true? What you state in your post is your wrong perception of bitcoin which you maybe gained from slashdot discusions.

3) I would love to see a viable cryptocurrency take off and break or loosen the hold that evil leviathan government has over the world today. The reality of Bitcoin, however, is that it is a bubble/ponzi scheme/lottery that enriches the lucky few early adopters at the expense of public trust in cryptocurrency, and once the Bitcoin bubble has come and gone, the odds of a fair, viable cryptocurrency being widely accepted by the public go way down. The fact that such a badly broken system is what's going to be equated with all cryptocurrency by the public and the media shatters any hopes I have of actually seeing a meaningful adoption of purely digital, non-government backed currency transactions for the foreseeable future.

Bitcoin is not ponzi scheme. Read up the definition of ponzi on wiki. It's maybe volatile but not bubble (people has been talking about bubble several times in the short history of bitcoin, how long would bitcoin need to survive to be considered non-buble?). It's not lottery either, you are probably talking about mining, which is based on luck but the mechanism is open and documented. it indeed enriches early adopters. that's feature of every sucessfull project. What alternative, which would enrich late adopters or everyone equaly, do you propose?

Not really "the system" so much as the current client implementations. There is provision (Section 7, "Reclaiming Disk Space" in the original whitepaper) for reducing the size of the blockchain by discarding transactions where all the outputs have been spent again and those subsequent transactions themselves are buried under enough blocks. This lets you pare down the size of the blockchain considerably.

It's just that, AFAIK, no clients currently implement this.

Bitcoin is an innovative payment network and a new kind of money.

How about reading their their FAQ where it specifically says Bitcoin is a cryptocurrency? You might learn something.

The system would allow people to pay bills anonymously over the Internet through an electronic transfer of funds â" just like Bitcoin.

Bitcoin isn't anonymous.

It would allow for micropayments without processing fees â" just like bit coin.

Processing fees are common with Bitcoin.

And it could kill off wire transfers through companies like Western Union â" just like Bitcoin.

Wire transfers are largely an oddity of the USA. Most of the rest of the world doesn't use wire transfers anyway.

The system would allow people to pay bills anonymously over the Internet through an electronic transfer of funds â" just like Bitcoin.

Bitcoin isn't anonymous.

It would allow for micropayments without processing fees â" just like bit coin.

Processing fees are common with Bitcoin.

And it could kill off wire transfers through companies like Western Union â" just like Bitcoin.

Wire transfers are largely an oddity of the USA. Most of the rest of the world doesn't use wire transfers anyway.

People who say Bitcoin a currency don't know shit about it, Bitcoin is more like gold or silver (read this http://bitcoin.org/bitcoin.pdf). gold prices have jumped up and down million times in history. Bitcoin might be overpriced now (or maybe not) but it is a brilliant technology that will make our life much easier.

Let's pick this nonsense apart.

> "Economist Edward Hadas writes in the NYT that developers of bitcoin are trying to show that money can be successfully privatized but money that is not issued by governments is always doomed to failure because money is inevitably a tool of the state.

Money is a tool of trade, valuable because it is sanctioned by its users in society. The success of money is determined only by whether people other than the holder accept it.

Bitcoin seems to be riding a hype, but doing okay just in terms of growing acceptance as a payment scheme for actual products and services.

> 'Bitcoin exemplifies some of the problems of private money,' says Hadas. 'Its value is uncertain, its legal status is unclear, and it could easily become valueless if users lose faith.'

Uncertain value and becomes useless if users lose faith? Sort of like fiat currencies? Except without "quantitative easing" causing inflation to kick the can on fiscal failures from decades of overspending.

The legal status is an open question, and a valid concern. Personally I think it's probably a red herring, but I'd keep an eye on the legal landscape if I was going deep in this.

> Besides, if bitcoin ever really started to take off, governments would either ban it or take over the system says Hadas.

How? What is his criteria for "take off"?

> The authorities might be motivated by a genuine concern about the stability of a shadow monetary system or they might act out of self-preservation because tax evasion would be too easy in a parallel economy.

Didn't this guy just say it would be less stable than official sector currencies? Anyway, tax evasion may be harder with Bitcoin since transactions are public record.

> 'Part of the interest in virtual currencies like bitcoin is that their anonymity can provide a convenient cloak for criminal activity. Part is technological â" this is a cool idea. And part is speculative â" gamblers bet that bitcoin's value will increase,' concludes Hadas.

Part of the interest in legitimate trade is that it provides a convenient cloak for criminal activity.

I think Bitcoin has less anonymity than the author asserts, and protecting privacy on Bitcoin is non-trivial for the average user.

> 'Truly private money is an inferior alternative to the money that comes with the backing of a political authority. After all, no bank or bitcoin-emitter can be as public-minded as a government, and no private power can raise taxes or pass laws to unwind monetary excesses.'"

Gold. It's private, not backed by any authority other than natural scarcity, and was the dominant reserve currency for hundreds of years before modern fiat currencies. We have only had our modern fiat currencies since Bretton Woods in 1971 years and it is already unravelling.

I'm all for valid criticisms of Bitcoin e.g. criticisms of the mathematics behind the artificial scarcity or a murky legal landscape. This guy's comments strike me as vacuous.

Edit: correct link: http://bitcoin.org/bitcoin.pdf

Wasnt the whole point that people wanted an unregulated currency with no government involvement?

Bitcoin has many points (see bitcoin.org) and this was never one of them. One of the many purposes of bitcoin is to have currency without central authority which could cause monetary inflation at will, but that in no way means that bitcoin should stay completely outside of any government influence and bitcoins thefts should be ignored by law enforcement.

The proponents of BitCoin claim that it was untraceable

I don't know what "Bitcoin proponent" told you that, but you could have just checked the Bitcoin FAQ to see that not only is that not an actual claim anyone knowledgeable about the project is making, but that they remind you of the exact opposite.

http://bitcoin.org/en/you-need-to-know

Bitcoin is not anonymous

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsability to adopt good practices in order to protect your privacy.

This crap is so old it's actually mentioned in the bitcoin FAQ:

http://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationary-spiral

There is lots of academic research that indicates the "deflationary spiral" doesn't happen like that.

Bitcoin having a fixed final size is just fine - it means when the economy grows, everyones money becomes worth a little bit more, i.e. prices fall a bit. Things get cheaper. That's sort of what you expect from progress, isn't it?

Another reason why Bitcoin and services accepting it rock.

The issue has already been resolved. http://bitcoin.org/en/alert/2013-08-11-android

From the tippy-top of the bitcoin.org website:

Bitcoin is an innovative payment network and a new kind of money.

Now, IANAL, but I suspect walking into court with an argument that bitcoin isn't a new kind of money when its creators clearly and demonstrably assert that it is a new kind of money is likely to fail pretty hard.

And yes, I'm well aware of the of the distinction between money and currency. Gold bugs, sufferers of Fed derangement syndrome and others spend a lot of time proselytizing about this stuff. The thing is that the SEC and the courts don't, which is why no one has ever succeeded in evading financial laws by attacking the legitimacy of fiat money.

At least not without an army.

http://bitcoin.org/en/bitcoin-for-individuals

"Mobile payments made easy

Bitcoin on mobiles allows you to pay with a simple two step scan-and-pay. No need to swipe your card, type a PIN, or sign anything. And all you need to do to receive Bitcoin payments is to display the QR code in your Bitcoin wallet app and let your friend scan your mobile, or touch the two phones together (using NFC radio technology).

Fast international payments

Bitcoins can be transferred from Africa to Canada in 10 minutes. There is no bank to slow down the process, level outrageous fees, or freeze the transfer. You can pay your neighbors the same way as you can pay a member of your family in another country.

Works everywhere, anytime

Just like with email, you don't need to force your family to use the same software or the same service providers. Just let them stick to their own favorites. No problem there; they are all compatible as they use the same open technology. The Bitcoin network never sleeps, even on holidays!

Secure transactions

Bitcoin transactions are secured by military grade cryptography. Nobody can make a payment on your behalf or charge you money without having a copy of your wallet. So as long as you take the required steps to protect your wallet, Bitcoin provides a nice level of protection against many types of fraud.

Almost free to use

Bitcoin allows you to send and receive payments for free. Except for special cases like very tiny micro-payments, there is no enforced fee. You can, however, choose to pay a small voluntary fee to increase your transaction priority and to remunerate the people who operate the Bitcoin network.

Pseudo-anonymous online payments

Anonymous payments are a part of our everyday lives - most real life purchases are done without the requirement to provide proper identification. Bitcoin now introduces the same freedom to the online world. It allows you to buy services or make donations without the hassle of being passed under x-ray. However, you should note that full anonymity requires special efforts."