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BitCoin, the Most Dangerous Project Ever?
Jamie found a followup to the bitcoin story we've been following awhile. The article talks about the untraceable, un-hackable nature of BitCoin. They can't be locked down like PayPal, and the article predicts that governments will start banning them in the next 18 months.
What a badly written sensationalist story. It's like something from the Daily Mail
Yeah this story is totally credible with stuff like:
Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.
6. Bitcoins will change the world unless governments ban them with harsh penalties.
Why? Because some random guy on a blog says so? And how is the world economy going to function with a currency that maxes out at 21 million? Yes, a hugely small minority of people are using this on the Internet as currency but it is basically insignificant.
TFA reads more like an advertisement for BitCoins than an news article.
Thanks to the nature of bitcoins, clearly the only method of 'banning' them is to prevent them being used on legitimate commercial transactions. Stop trade for money (though in-person cash makes that hard), stop legitimate businesses from accepting them as payment (some excuse about non-taxable yadda-yadda) and then hunt people who generate them by precariously tearing down the illusion of TOR anonymity (hello, echelon mass surveillance tech).
That of course if it somehow becomes a stable currency. Right now, thanks to GPU clients, it's insane to think you'll get a good ROI rather than finding a novel way to launder money by converting electricity into untrackable currency. Since I'm not a crypto guru, is there a serial hashing algorithm that could, if used for a similar currency, avoid the ridiculous advantage of parallel GPU crunching?
Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.
Then it says:
Of course, since bitcoin transactions are untraceable, you would have zero recourse if you sent a dozen bitcoins to someone for a couple of tabs of LSD. Just like you might lose your $10 if you gave it to a kid in the school yard for a dime bag and he never came back.
Well, which is it?
... computational complexity? They serve absolutely no purpose with no possible side usages (like gold). The only purpose they serve is being a resource in contention. So what happens when people just decide to stop contending for it?
I first read about BitCoins on Slashdot a while ago and what intuition I have seems to wager there's a lot of Catch-22s with this pseudo-fiat currency. I mean the value is derived from scarcity but is also tied to what
I think that the title of this article being "BitCoin, the Most Dangerous Project Ever?" is a crude attempt at a self fulfilling prophecy as it's no danger unless people start to use it and actually value the BitCoins at their trading rate. I liked the section titled "BitCoins in Real Life" that says:
In the next year you’ll hear about people in casinos in Vegas buying and sell bitcoins for cash and casino chips.
Riiiiight. I somehow doubt that.
I think this amounts to some very smart people engaging in a cute little experiment that will experience initial success as those with GPU farms get some of this novel currency. But it can never grow very large because you need a pretty expensive infrastructure even to handle BitCoins and the only interests it serves will be those industries that want easy untraceable ways to exchange value for illegal products or to avoid taxation. And once that's exhausted, I suspect it will flounder.
Does anyone honestly think the promise of protection from inflation will cause people to ask for their paycheck in BitCoins?
My work here is dung.
They absolutely DESTROYED their respective economies.
ABSOLUTE DESTRUCTION!!!!
aieeeeeee
Every client has a complete list of all transactions... how can they be called untraceable?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Sounds like something Neil Stevenson might write.
"Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband."
I hate to tell you this, but this has already happened with regular-government issued legal tender.
Look at druglord Mexico, most 3rd-world countries, and the US with its billion-dollar Wall Street bailouts and ponzi schemes. Bitcoin would be a little late to the game.
He who knows best knows how little he knows. - Thomas Jefferson
I still have no clue what this 'bitcons' are. Can anyone give an explanation not stepped in sensationalism?
"Our goal each year should be to increase the number of goals we set for ourselves!"
BitCoin should be banned because we want our currency to be as safe and stable as the U.S. dollar.
It's not untraceable, at least not easily. As I understand it, every user has a copy of the the complete history of every bitcoin. Every coin is explicitly traceable - much more so than cash. The only way in which it is untraceable is that you don't know which bitcoin identities correspond to which real-life identities. Unless you happen to run an exchange, or carry out transactions with known people.
The way around it is by using the http://bitcoinlaundry.com/ which jumbles up the coins, but then you have to trust that they aren't actually run by the FBI/whatever.
I think the banning prediction is right though (although maybe not 18 months). If this becomes popular there's no way it will stay legal. The government will be able to stop it fairly effectively by shutting down exchanges.
I could only read that article with the late night salesguy's "These collector coins can only go up in value!" voice, but the content of the article was all about how it's clearly a scam and the author is obviously in on it.
I read the internet for the articles.
This just means more people will start buying bitcoins, and my reserve will keep increasing in value. And I'm sure the author of this article reasoned the exact same way...
How does "cannot be tracked" come from something in which:
It's been a while since I did anything in crypto ... but if you can verify the signatures, and they're now attached to the coin ... can you just confirm the signatures without knowing who signed it? If it's been signed with my public key, don't you need my public key to verify it?
It seems like either it's traceable, because you can see everyone who has ever held a given set of coins ... or it's not trustworthy because all you have is a signature which you don't necessarily trust because you have no idea where it came from, but you trust the cyrpto.
This sounds like getting cash that has a record of everywhere it's ever been, but maybe I'm missing something here. Won't these 'coins' get large over time as they keep getting signed and passed on? (And the amount of verification needed would get quite long, no?)
I don't think I'm all that interested in a virtual currency whose major benefit is that I can buy escorts and drugs on-line without anybody being able to trace it ... it just seems like there's more motivation for fraud in a system like this. And, it seems like something which is going to start coming under a lot of scrutiny.
I'm just not getting what need this is intended to fill ... and I'm not sure I understand how it's simultaneously untraceable and secure.
Lost at C:>. Found at C.
This might be interesting as well: - https://en.bitcoin.it/wiki/Freenet Bitcoin over freenet. Makes it even more harder to track down people and nodes. Yes unless all isps are instructed to not only filter bitcoin but freenet (and tor) traffic as well.
TFA looks like a biased politically-motivated piece, likely written by someone who works for a bank. It talks all about how operating currency independently from the banks or government, who are there to protect you, is dangerous for you (only criminals would do something like this, right?) and risks toppling the government. Of course it will cause problems for banks; people using it might not have to deal with abuse, fees, or identity theft from a badly broken security model that is our financial system when they close their bank accounts for it. FUD aside, I suppose that in itself is reason for the governments to ban it, since the powers that be have something to lose. At least if they're in the pockets of CEOs like they seem to be as of late...
oh, you're saying you can trust bitcoin?
ok. meaning you can verify transactions?
meaning... drum roll please, it is traceable
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
It has always bothered me that the government does not control modern currency. Instead, Visa, Paypal and large banks do.
It would make sense if a government created it's own electronic currency system and mandated that everyone accept it (within some amount of time).
Creating a naturally deflating decentralized currency is just the first step in making the world a better place. Sure, it might end with Lenin's reanimated corpse ruling the world but at least it cuts out all this bullshit banking middleground that tricks most westerners into thinking they can afford a house & 5 SUVs...
Governments don't need to make Bitcoin illegal. They just need to make it unusably unstable. Ramp up the price, then make it crash. Over and Over. Nobody would use a currency system that swings wildly in value from day to day.
That said, I've already donated to XKCD www.xkcd.com/bitcoin ~S
In the majority of respects, Bitcoins are no different from cash, and that includes the anonymity and untraceability aspects -- anything that lets me get rid of Paypal and Visa shackles is undeniably a good thing! That said, maybe Bitcoins could be banned because with greater uptake (in the very distant future) they could undermine the US dollar as the reserve currency?
In other words: free trade, The Most Dangerous Project Ever.
I thought they wanted to be funny but there was no punch line. If the article wasn't supposed to be funny, it must have been machine generated (like SCIgen). Statements like this give it away:
* Bitcoin is unstoppable without end-user prosecution.
What does that actually mean? Are standard coins and notes "stoppable" and "with end-user prosecution"? Could someone come up with a car analogy so I understand?
Anything with such features will be banned by governments.
Trivial!
Maybe Computers will never be as intelligent as Humans.
For sure they won't ever become so stupid. [VR-1988]
The best way to back this currency would be to trade it for cpu time or bandwidth and start an anonymous decentralized data haven where you need bit coins to use it. Kill two birds with one stone. I2P anyone?
From what I have read, the whole bitcoin thing is a guant scam, and illegal in some countries.
This isn't one of those areas that is a gray area either where congress is finding something else and expanding upon it to expand authority. The Constitution is real explicit in section 8 that congress shall have the power "To coin Money, regulate the Value thereof, and of foreign Coin."
One of the powers congress is clearly granted is control of the currency in the US. Now congress could likely permit other entities to coin money if they wanted to. The language is just that congress has authority over it, not that only the federal government must do it. So I suppose if congress liked bitcoins they could declare them legal tender. However it does mean that if congress doesn't like it, they are the ones with the final say.
That's actually a very good example of a "pseudo-currency".
(Lawn)
I once bought a pizza from Papa Ginos with two Sengir Vampires. (The register guy agreed to repay the pizza out of his own pocket.)
(/Lawn)
The fascinating thing there is how Wizards "tricked itself" by misreading how certain cards form gamebreaker combos. So then they embarked on an elaborate "currency value adjustment" program, aka Type 2. (With all the spinoffs etc. In my areas "1.5" and "Legacy" and so on were never very popular.)
By being relegated to "Type 1" All those power cards were effectively cordoned off into a backwater, and lost most of their effective value. Then as the years rolled on, once cards left Type 2, they also dropped in value like a stone.
What's to keep the BitCoin administration (does that make sense?) from "adjusting" it later to suit some agenda?
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
I assumed you would use whichever operating system would make it easier for you to research libtard talking points and half-assed conspiracy theories.
Ubuntu Linux is too African. Use Confederate Linux, General Lee Edition.
I think its unlikely bitcoin will become popular at least until it is made easier to use for most people. Reading some of the descriptions of this, it sounds like something only a geek could love, it is too overly complex for most people and the user interfaces are probably things only geeks would love. Average people will probably not bother it and it will only be used by a very small geek community. Geeks are smart but they lack understanding of the behaviour of common people and of developing user interfaces that are useable to common people. I call this the Linux effect.
Unbelievable.
Steven
Weird. I was just thinking about how one could steal a lot of money from Mark Zuckerberg in the vein of the opening scene of "Sneakers". After all, a guy with that big an ego needs to be given a healthy dose of humility. With a system like this, in theory all you'd need to do is hack his bank account and buy a ton of bit-coins and then transfer them around the net to various accounts and such which would subsequently get deleted.
As for this sort of thing being illegal, that only pertains if the whole thing is running in the U.S. All you need is a private island. IIRC, Neal Stephenson touched on these subjects in Cryptonomicon.
http://techland.time.com/2011/04/16/online-cash-bitcoin-could-challenge-governments/
That article made a lot more sense to me and had significantly less amounts of fanaticism.
The Bitcoin proponents seem to think this is some really amazing idea that is like Cryptonomicron come to life and think everyone else should get on board. The rest of the world thinks bitcoins are retarded and doesn't use them.
To me this seems like just more hype, but trying to go at it from a scare part: "Oh these things are so amazing and dangerous that the government will ban them!" Trying to play on people's love for things forbidden.
Of course it is also rife with problems, one of the biggest being the whole deflation thing. Deflation is something that strangles an economy badly. People want to spend as little as possible, since you get more for the same money in the future, which of course means there is little spending and little spending means little trade which means the economy goes to shit.
Anyone who is in love the idea of deflation because "My money will be worth more," need to go retake ECON 201 and learn what money really is and why we have it.
Any current that has built in deflation is a really. really, bad idea.
Nobody has really messed with that kind of thing since let's be real: Nobody gives a fuck about bitcoins (other than some wannabe-anarchist geeks). However the scenario you propose seems quite realistic. Perhaps not quite that simple, but I would bet determined people could find a way to duplicate these. Would they get noticed? Probably, but so long as they got what they wanted they are happy. If the anonymity feature of the system really works as promised then they can keep doing shit like this, just hiding under different identities and so on.
I'm curious how many bitcoins the author purchased before releasing the article. I'm going to watch the market at mtgox for the next few days. I suspect a new spike in its valuation to come from this fresh attention. Since bitcoin is a relatively new, fairly unstable currency, just a bit of media attention is enough to drive the purchase price up pretty quickly. A savvy investor would happily plant a sensationalized article, anticipating that their newly purchased coins will rise quickly, then sell before it dwindles again. A fairly safe way to play this market.
Please yank this story and republish April 1st 2012
Thank you
You would have to violate human rights to forbid to using it.
People are saying it's untraceable because you can generate new public keys whenever you want. In this way, you can use a different key for each person/vendor you interact with, or you can use a new key for each transaction if so desired. Whether going to these extremes makes it completely untraceable or not, I cannot say, but it does make it a heck of a lot harder if you do go to such extremes.
Among other things, the article makes two claims about Bitcoin: one, that the coins are untraceable, and two, that because each transaction is cryptographically signed, you can verify the chain of ownership of any Bitcoins you are given.
Doesn't the second point contradict the first?
Why is it that every explanation of bit coin, including your attempt, is incoherent. Given it can't be explained I think it's a scam.
I have many questions in part because the basic schema is not clear. I've watched the videos and read the sites. But there just is no explanation that makes a whole coherent sum and there are contradictions when you piece the various explanations together.
1) On a torrent network, not every node knows where all the slices are. Not all nodes are in communication. Thus what happens if I sent 30 bit coins to Amy and then I sent the exact digital copy of those coins to Brad who is on a network remote from Amy. It sounds like Amy will query the local network to see if I own the coins and so will Brad. But because those queries never intersect on the same node both appear to be valid when in fact I just copied the money. Later on perhaps the system can't reconcile two people owning the same coins but by then I'm gone.
2) Suppose I send money to Alice. then a fraction of a second later Alice tries to send the same Money to Bob. How does Bob determine that Amy owns the coins? No node on BoB's network can validate my transfer to Alice.
3) the description has this trail of signed hashes being appended. Does this grow forever and can it be inverted to follow the money?
4) is each coin signed? or is it transactions?
5) if someone invents a way to make coins cheaply does this doom the system? What regulates the produciton rate? does this work if I have 1 million different user identities? if there is a central signing authority for this then what keeps this from getting cracked or printing their own money to flood the system?
6) what happens if botnets start mining?
how does this actually work, end to end, technically not operationally?
Some drink at the fountain of knowledge. Others just gargle.
So what stops me from using an already existing bitcoin that someone else already "owns" or from reusing one I may own over and over again? (Such as by copying my backup of my bitcoins.)
Why should bitcoin be labelled as the most dangerous project ever, especially by someone as normally even-headed as Taco?
Here is a brief list of far more dangerous projects, where the danger is either to political stability or human life, in no particular order:
1. nuclear weaponry (two smallish bombs caused the unconditional surrender of a decent sized country, and has caused the rest of the world to spend trillions upon trillions of dollars to maintain parity since then)
2. biological weaponry (the appropriate dispersal of appropriate agents, like smallpox or Spanish Influenza, could decimate the world population)
3. chemical weaponry (the appropriate dispersal of appropriate agents could kill an entire city, and thus easily lead to the collapse of a government)
4. rockets (a basis for nearly all modern warfare)
5. inertial guidance systems (ditto)
6. GPS (ditto)
7. hydrocarbon-fueled turbine engines (ditto)
Notice a pattern there? They're all implements of warfare. Those are dangerous things. Those are things that kill people.
That said, I've read a number of pundits who are now suggesting that the large WikiLeaks document release ultimately triggered the pan-Arab unrest we are currently seeing. That's a heapload of powerful mojo.
Put my fist through my alarm clock with its ding-dong death inside my ear. - The Blackjacks.
While I don't believe BitCoin will ever be accepted widely enough to make this happen, there are dangers if it were universally accepted.
I will admit that this is an oversimplification, but in an economic collapse, either the value of the currency falls or wages fall. Austrian school economists don't see a problem with that, but as anybody who's ever bought a more than one tank of gas in the US can attest to: prices are SLOW to respond to the reduction in the price of the inputs. Wages could fall much faster than the prices of things like food... Eventually, there will be surplus goods, causing prices to fall, but that's going to take a while. People need to eat more often than that. The logical response by producers would be to produce less, thereby employing fewer people, leading to further reduction in wages. Lather, rinse, repeat.
On the other hand, if a government can devalue its currency in one fairly dramatic step, you create a situation where goods are temporarily cheap, causing people to consume more. Eventually, the prices of the inputs will go up, and the goods will become more scarce, but if you can borrow consumption from the future, you can head off the feedback loop. This has been used to good effect in the past.
If everybody were paid in BitCoins, devaluing a national currency would be ineffective at heading off a recession, leaving few tools in the toolbox.
Can we use BitConis on FarmVille. I understand many gaming sites also provide their own forms of currency how does that work? Does the congress allow that ?
Alt Currency is just that. It may work for some people in a non formal agreement of value, but otherwise it is worthless. Unless there is a convent way to transfer it, it will remain worthless. Just like casino coins from Vegas would have little more then curio value in Malindi, Kenya (unlike the US dollar or Euro which you can buy food or lodging with) (bonus tip- go to the last resort North of town past the bend in the road, about 2 km, there are bungalows on the beach and a pool if you don't want to swim in shark infested waters). If you can't buy food or gas with it at the corner station it's not money.
They come in the dark, only in the darkest.
but for investigative purposes, guys knocking on your door, absolutely
they will ask you who was using that ip on such-and-such a date. if you have an open wifi, they will ask you nicely if they can bug your base and hang around and triangulate where the guy with the pringle can is. if you refuse, they will look at you with a new sort of interest
oh, you thought "ip!=person so nobody is going to investigate crimes anymore"?
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
Comment removed based on user account deletion
Comment removed based on user account deletion
This is not to say that all Libertarians are ignorant, but that Bitcoin appeals to Libertarian ideals and requires ignorance of how money works to be sold. Bitcoin has no in-built velocity. Taxing authorities won't accept them and having a fixed amount of them means that they don't have a debt-based life-cycle as does the money most of us claim ownership to. Also, even if Bitcoin were to take off, as demand for it increased, it would create its own valuation bubble where it becomes more valuable to hold the money than it does to invest it. Nobody would be able to borrow in Bitcoins at a reasonable rate of interest, real demand drops, then speculators are left holding a bunch of worthless digital currency. If you think that Bitcoin is a good idea, you are likely in need of an education in economics and accounting and need to lay off of the conspiracy theories.
that these "bitcoin" will not turn out to be absolutely worthless and worth less, in fact, than the electricity and CPU time that produced them. CONFIDENT, I say. Oh wait, I mean CERTAIN.
"Outdated business models" is code for "I don't like paying for things, but want them anyway"
To return (sigh) to the case in point:
I fail to see why (or how) Bitcoin is any more reprehensible than any other kind of barter system. Our current taxation systems are primarily geared towards funding government wastage (at best) or blatant pork-barrelling (at worst).
An exchange system that directly benefits the individual parties concerned gets my stamp of approval. Our governments get to piss enough of our money against the wall as it is, and anything we can do to bypass that is just fine by me. The world is ready for anarchy.
Bitcoins might also be considered to NOT be currency, but a tangible asset such as a bar of gold or silver. In that case transactions involving bitcoins are actually barter. While US citizens are not allowed to own gold (or is this no longer true) except for gold coins and makers of jewelry, items made of gold could be owned and bartered. Airline mile credits are a similar tangible asset.
bitcoin is designed to have "diminishing returns" in terms of bitcoin generation. ie: the longer the project goes on, the fewer new bitcoins will be generated. This ignores that the longer the project goes on, especially if it is successful, the fewer bitcoins will usefully exist. ie: not just a counter that says how many bitcoins exist, but the number of bitcoins which are valid and usable, as opposed to being lost due to lost keys, etc.
-- 'The' Lord and Master Bitman On High, Master Of All
Tell me why i should use bitcoins instead of real gold. I find the idea of some currency that has an artificially imposed (vs reality imposed) limit to supply a tad... wrong. Why should we burn cpu power to generate bitcoins when that could be put to better use solving actual problems?
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
I'm sorry. Is this something I should care about?
It deals with virtual money? Or, 'untraceable' transactions online? Oxymoron much?
Reading TFA, it sounds like a Chris Morris satirical piece.
What's the executive summary? WoW gold that can be traded for real life hookers and blow?
If you were blocking sigs, you wouldn't have to read this.
http://en.wikipedia.org/wiki/Tulip_mania
I love Jesus, except for his foreign policy.
As long as I don't have to bail anybody out when their pseudo-currency fails I couldn't care less what two parties choose to use as their medium of exchange. It could be bitcoins, de-circulated $1000 bills, precious metals, livestock or hand-carved wooden nickels. As long as they both see value to it, it doesn't (and hasn't thru all of history) matter.
Wait... that's exactly what they did.
Deleted
That's a good deal. If he wanted your Serra Angels you'd have to get soda and an extra topping.
Agreed. Bitcoins is a real danger to the otherwise rational people who seem to be taking it seriously. To the rest of us, it's just vaguely amusing in an "awww, baby is smearing his poop on his face!" kind of way.
BitCoins are no good out here. I need something more real.
I read the article and felt like the author was full of doom and gloom but it seemed exciting to think that bitcoin is a way to hire prostitutes in Vegas. I'm buying my bitcoins now and losing my virginity as soon as the cyber-black market opens!!!!!
And what happens when the limit is reached? Who replaces the lost bitcoins (think HDD crash)
Also, if the transactions are truly peer-to-peer (as in no cental co-ordinator), what's to stop me from cloning my hard drive to pay my power bill with the original and my (hypothetical) drug dealer with the clone? If the transfer is truly peer-to-peer the party getting the counterfeits will never know.
Additionally, Won't the 'diificulty' of 'mining' for bitcoins significantly reduce with the adoption of quantum computing? (I'm fairly sure the three letter organizations have 'em already; how else would they break SSL en-masse? (They must be, since they decided to declassify it from 'weapons'; old news, but it makes sense))
Both hackable and traceable with sufficient nodes.
Your post says what bit-coins are only in terms of their attributes or *what* they do (e.g. "Binary search trees are ways of efficiently searching"). I think the GP was asking for what they are in terms of their essence or *how* they do (e.g. "Binary search trees are binary trees sorted by their in-order traversal").
After all, if the GP doesn't trust the "sensationalism", then how is he to trust the attributes you ascribe to bit-coins? Your post says what bit-coins do not how they do it. How is the GP to trust that they actually do what you say if he doesn't know how they do it?
"A month ago I heard folks talking online about a virtual currency called bitcoin that is untraceable and un-hackable."
"A payee can verify the signatures to verify the chain of ownership."
If you can verify a chain of ownership then they are by definition traceable.
Is the author missing something? If so what?
I find being offended by me offensive.
This has been done before. See DigiCash, from 1990. "Clouds gather over Amsterdam as I ride into the city center after a day at the headquarters of DigiCash, a company whose mission is to change the world through the introduction of anonymous digital money technology. I have been inundated with talk of smart cards and automated toll takers and tamper-proof observer chips and virtual coinage for anonymous network ftps. I have made photocopies using a digital wallet and would have bought a soda from a DigiCash vending machine, but it was out of order. " - Wired, 1994. See the article for what went wrong.
The soundness of Bitcoin's crypto doesn't seem to have been analyzed by third parties yet. There's nothing in Cryptologia or sci.crypt. Until there's agreement in the crypto community that it's sound, I'd be suspicious. There's also the problem that if the money resides on user PCs and smartphones, the usual attacks on those devices can steal it. Once stolen and used, there's no way to get it back.
Transactions are not very anonymous. If you spend a coin with a server, the server now knows your public key, and can associate it with any other identity information it has for you ( IP address, Facebook login, shipping address, etc.) If Amazon, eBay, Google Checkout, or Facebook accepted bitcoins, they'd be able to collect this info for a sizable fraction of the online world. Since your public key remains associated with the coin for at least the next few transactions, it's possible to follow the money.
Systems like this detect duplicate spending of the same item, but you can't tell if someone has a duplicate but unspent copy of your coins. So you don't know your money been stolen until you try to spend it.
There's also the technical problem that "new transactions are broadcast to all nodes". That won't scale.
I expect that any government that is not technologically backward will end up wanting to try to break the system rather than prosecute against it. The likely hood of someone figuring out how to generate counterfit bitcoins will approach 1 as the potential profit for doing so increases. It will only take one person breaking the system for the entire system to be rendered useless.
Arresting people will cost money. But generating counterfit bitcoins is profitable in the short term and will acheive the longer term goal of getting rid of the system.
END COMMUNICATION
I'm no expert but all of the things you guys are talking about happen with real currency. The only reason a dollar bill has value is because everyone has agreed that it has value. If there was a zombiepocalypse tomorrow cash currency would become worthless next to things like shotguns or flamethrowers. Furthermore, currency's value IS adjusted to suit some agenda via the government set interest rates.
-Xoltri
Wow, I don't understand the hate here for Bitcoin. It is a very clever idea that is trying new ideas out. It used to be that Slashdot would have some interesting comments and debates about such a engineering feat, but I guess the quality of the readers here has dropped quite a bit.
Only to your banking monopoly.
Save a human life - kill a banker.
"Flyin' in just a sweet place,
Never been known to fail..."
cash, which can be transferred from person to person, is untraceable and unstoppable. each person transfers cash by means of physically moving their arms, holding the cash in their hand, and dropping into the hand of the next person.
The fascinating thing there is how Wizards "tricked itself" by misreading how certain cards form gamebreaker combos. So then they embarked on an elaborate "currency value adjustment" program, aka Type 2. (With all the spinoffs etc. In my areas "1.5" and "Legacy" and so on were never very popular.)
By being relegated to "Type 1" All those power cards were effectively cordoned off into a backwater, and lost most of their effective value. Then as the years rolled on, once cards left Type 2, they also dropped in value like a stone.
Well, except that this didn't happen. Yes, a number of cards definitely lost value once they fell out of Type 2 - but the price of the core type-1 power cards has never actually gone down, and in fact Legacy has meant that a number of secondary cards from that era have now skyrocketed. A white-border Black Lotus will set you back more than a thousand dollars; a black-border one you'd be lucky to find under two thousand. All the dual lands are north of $50 in white-border now and more than $200 in black border; half-blue duals are at least $5-600 each in black border. Some of the cards from the earlier sets (esp. Arabian Nights) have seen corrections, but that's more a matter of the market realigning itself around playability rather than just rarity - old out-of-print cards that see any tournament play at all (or even saw tournament play at one point) have skyrocketed (Karakas at $50-60, Sylvan Library at $25, etc.)
Let's just assume, for arguments sake, that all the technical claims are correct. It's untraceable, and verifiable. One can trust that a transaction involving bitcoins behaves like a transaction involving physical objects. The payer had the coins before the transaction, and didn't have them after, the receiver ends up with them and can spend them later. It's as if they are trading in atoms of unobtainium.
Governments will not need to outlaw bitcoin specifically, all they need to do is spread FUD. The existing financial establishment has such a vested interest in preserving the existing system that they will effectively prevent exchange between national currencies and bitcoin. This will involve FUD and freezing out any known bitcoin traders.
If you feel like you are doing business with crooks when you transact in bitcoin then you will not really be motivated to use it for anything but black market items. All I need to say is "Bitcoin is just used by perverts to buy child porn". It doesn't really have to be even close to accurate. It just has to smell plausible.
You know the traditional form of currency used by black markets around the world is US $100 bills.
This is not to say that all Libertarians are ignorant, but that Gold appeals to Libertarian ideals and requires ignorance of how money works to be sold. Gold has no in-built velocity. Taxing authorities won't accept it and having a fixed amount of Gold atoms in the universe means that it doesn't have a debt-based life-cycle as does the money most of us claim ownership to. Also, even if Gold were to take off, as demand for it increased, it would create its own valuation bubble where it becomes more valuable to hold it than it does to invest it. Nobody would be able to borrow in Gold at a reasonable rate of interest, real demand drops, then speculators are left holding a bunch of worthless metal. If you think that Gold is a good idea, you are likely in need of an education in economics and accounting and need to lay off of the conspiracy theories.
This is why the Great Old Ones' seem so godlike to us.
They didn't have a sufficiently long history of stellar nucleosynthesis, and without elements as heavy as gold, they never had currency. Hydrogen wasn't up to the task. It would take billions of years and many generations of supernovas, but Cthulhu and his like had no time to lose and had to get on with their liv-- existence.
Without currency, sophisticated economic systems couldn't develop, which in turn kept leisure time down and inhibited technological development (though that was also retarded by the mineral scarcity). There was nothing to do, but turn to what we can only think of as "magic." Magic -- the other way of doing things -- the thing that people who live in a later universe where heavy elements exist on planets, cannot possibly comprehend.
What beings walk the sky in a universe where wealth is measured, not by the long-awaited output of gravitationally-compressed fusion reactors, but the output of mathematical processes like what BitCoin uses? Not gods, surely. With their immense but illusory "wealth" they never have occasion to draw upon real power, the power that sustains you through unimaginable scarcity. It's not just the billions of years of experience that makes one a badass motherfucker; it's the fact that you were the one of the few who survived those early eons of the universe's overwhelming poverty. When Cthulhu talks about the "Iron Age", he's referring to when the first atoms of iron were created.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
wanna hear Ron Paul on this.
Why do taxing authorities need to accept BitCoins in order for it to be successful? I don't understand what you mean by a "debt based life-cycle". The concept is similar to using a commodity such as Gold or Silver where there is a finite amount that exists. You can exchange fractions of BitCoins (up to 8 decimal places as I recall). Finally, why would it ever be more valuable to hold money and not use it or invest it?
Bitcoins are virtual coins in the form of a file that is stored on your device. These coins can be sent to and from users three ways:
1. Direct with peer-to-peer software downloaded at bitcoin.org
2. Via an escrow service like ClearCoin
3. Via a bitcoin currency exchange
Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.
The benefits of a currency like this:
a) Your coins can’t be frozen (like a Paypal account can be)
b) Your coins can’t be tracked
c) Your coins can’t be taxed
d) Transaction costs are extremely low (sorry credit card companies)
Just a few reactions:
a) Not only can your coin be frozen, but any coin you transferred can also be frozen by identification of your signature - there may be a "cash economy" where bitcoin is exchanged without oversight among iPods, etc., but when it hits a regulated transaction processor, it's even worse than putting cash in the bank.
b) I'm sorry, if your signature can't be tracked, what good is it?
c) The author sorely underestimates taxing authorities, at a minimum, the government can demand that you self report transactions, much as they do for cash and similar instruments today.
d) Credit card companies' transaction costs are also extremely low...
It's something new, in response to the already existing system which is pretty broken. It won't work, indeed even if it stays legal, it will crash on it's own, but after that there will be other tries, other things, eventually we'll get closer to a better system.
You're right about replacement costs. However I was trying to address the idea that overall the number of "Type 1" tourneys being held dropped dramatically, so that at least as I recall the mood in my areas for several years, their broad play value evolved into something like a museum piece on a pedestal. Perhaps the concept I was trying for was something like a liquidity problem.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Wow, I don't understand the hate here for Bitcoin. It is a very clever idea that is trying new ideas out
If it's worthless except as a ponzi scheme it deserves hate.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Whether or not they are legal, there do exist places that exchange in-game currency for $US (as well as other currencies).
If Bit-coin is to be outlawed, all it-game currency should be outlawed as well. The Bit-Coin game is boring -- focusing solely on the generation and transactions of bit-coins, but it is essentially the same as any modern MMO game with transferable in-game currency.
Interestingly enough, Bit-coin makes an excellent in-game currency if you don't mind giving up control over the value of the in-game goods, and require players to purchase their starting in-game currency allotment (otherwise you're giving away free bit-coins).
Or, you can turn the whole in-game currency thing on it's ear and just make a free to play MMO with a game client that doubles as a your own personal distributed Bit-Coin mining operation.
I suppose players could subvert your network protocol and claim the bit-coins that their machines generate, but as long as most people don't do this the idea could be "profitable" (providing you can exchange bit-coin for more than enough than the currency required to run the servers that power the game).
> a debt-based life-cycle ... as opposed to previous "intrinsic value"-based life-cycle monetary systems? How do barter systems that use tokens of value fit into your theories?
How do you differentiate the inflation of a "debt-based currency", either paper inflation or hard-asset inflation, from the inflation of the entirely speculated value of bitcoin valuation? How is a bitcoin bubble different from a housing bubble?
Not trolling for reaction here. You profess an education in economics and accounting, so I'm 'trolling' for answers, if I can get them.
I'm kind of surprised that nobody has yet created a botnet to mine bitcoins.
I'm not saying you're wrong, but I think you need to clarify some of your positions. That said, here are three questions from an ignorant BitCoin proponent:
(1) Why is a debt-based life cycle necessary for a monetary system? I was under the impression that money was a claim to labor. Debt, precious metals, and computer time all fit this description. Keep in mind that no fiat currency in history issued by a single "responsible" central authority has survived longer than 80 years before collapse, the longest-living experiment being the British pound.
(2) I'm surprised that you discount BitCoin's merits as a unit of currency that provides advantages for digital transactions. It makes a lot of sense as a unit of trade for stocks, for example. Why is it necessary that taxing authorities will accept a currency for it to be a useful unit of trade?
(3) BitCoins are currently divisible down to 8 decimal places (currently 1BC=8USD), but the algorithm can in principle be modified to allow BitCoins to be divisible to arbitrarily small precision. Even in the presence of a valuation bubble, then, does that not allow the market to simply rescale the number of circulating coins to allow trade to continue? How is this a larger concern for BitCoin than for real currencies that could be in a valuation bubble?
Slashdot editors: I submitted this EXACT article last night, and it was labelled SPAM by one of you. Why?
For the simple reason they are NOT legal tender. When the federal reserve was formed they ended state banks from issuing legal tender. All foreign currency is recognized but not allowed as payment which is why banks exchange it. Simply put a bitcoin because it lacks intrinsic value is tender and subject to US penalty. Course being a deflationary economy will kill it without a rapid expansion in available currency. It's possible to be neutral (since the expansion isn't exponential s all other currencies are) but it would require a forced time limit on holding coins. If anything this is libertarianism in action and watching it conceptually collapse.
The difference is that the full faith and credit of the US government probably carries a bit more weight than the full faith and credit of an anonymous internet startup
http://www.treasury.gov/connect/blog/Documents/20110516Letter%20to%20Congress.pdf
Hope This Helps.
Deleted
Many of the comments on this post seem to want to discredit this new idea, but I think that it definitely has potential. Most people have far too much computing power for the functions they perform on a daily basis. Dedicating this extra computing power to mining doesn't seem like too much of a waste. I am curious if the computing power dedicated to mining has any other function. I will try the program and see where it goes. Since the computations are largely performed using GPUs does anyone think it would be possible to use a jailbroken PS3 dedicated to this purpose? -Free will is an illusion. Your actions are simply the cause of some other effect.
If there is no God then free will is an illusion.
Wait a minute... The article mentions that if your hardware crashes and you have not "backed up" your bitcoins, then you are SOL and they are gone for good. Sooo if you can actually "backup" or in some way clone your bitcoins, what is stopping you from making infinite copies? As long as one buyer never gets two of the same copy, how will they know the money is counterfeit? Being peer-to-peer there is no centralized server to check dupes against (I assume here).
Did I miss something?
Uh... do you know what a Ponzi scheme is?
You are trying to rules-lawyer a community. There is only one rule, piss us off and we will fuck with you. Switch nicks if you want. Do whatever the fuck you like, but don't expect that you will gain acceptance, respect, or even tolerance. You seem to think that tolerance, acceptance and respect are your birthright, that your own choices and actions should not influence how others see you. This is not the case.
Why do you complain? Who are you whining to? Who do you think is going to swoop in and say, "Hey! Be nice to cpu6502!"? Do you believe that the community simply does not have all the facts, and if we understood your side of the story, we would all love you?
Some people figure out social interaction by watching others and learning. Others figure it out the hard way, by making mistakes, pissing people off, and then learning what not to do. Other people never learn from their mistakes and continue acting in an anti-social manner. It may not seem fair that people will judge you like this, a group imposing its will on an individual, but the alternative is the individual imposing his will on the group, and that is even less acceptable.
We do not have to like you. We are not required to respect you. We don't even have to tolerate you. If you want to be accepted here, then you must earn it through your actions. Despite what Saturday morning television might have told you, you are not the most important person in the whole wide world. You are not unique. You are not special. You are just one of nearly seven billion human beings with an opinion and a big loud mouth.
If you find yourself in a situation where you are not accepted or tolerated by a group, there is a good chance that the problem is with you, not the group.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Obvious problems:
1) Can you say deflation? That's bad, and it's built into a system that has a fixed number of units (that also experiences breakage.) Since the number of units in circulation does not rise with the size of the economy utilizing them, the price of anything bought with it MUST drop over time. This discourages their actual use. Economists do not universally refer to "deflationary spirals" with horror because they are all equally brainwashed.
2) They want to replace credit cards, but the supply is limited to 21M over the next 130 years? That's like an economy where the only transaction unit is shares of Berkshire Hathaway. And people think a $5 minimum credit card purchase is a gross violation of civil rights...
This is broken in so many ways, I don't think the governments of the world are exactly quaking in their shoes and/or writing laws to stop this.
Holy shit. I should open the suitcase I have in my garage then and see if any of it's worth anything. :D
We've already gone over the fact that this guy was a simple scammer trying to defraud people by passing off fake legal tender and then undervaluing the amount of silver in it. Repeating the same falsehoods when everyone already knows the truth may work in your local John Birch group, but most of us here are sane.
Libertarians know how currency works. You're just ignorant of how currency should work.
"I assumed blithely that there were no elves out there in the darkness"
What is a money's "velocity"? And how would it be built in?
My taxing authorities also won't accept Euros. There is an exchange rate between dollars and bitcoins.
I also don't know what a "debt-based life-cycle" is.
Also, even if Bitcoin were to take off, as demand for it increased, it would create its own valuation bubble where it becomes more valuable to hold the money than it does to invest it.
If it takes off, I imagine more people would mine for coins, but yeah, deflation is an issue.
real demand drops, then speculators are left holding a bunch of worthless digital currency.
Yeah, inflation is also a bitch.
I'm not going to lie, economics seems like voodoo to me. I can barely grasp the basics and anything I say on the subject is guesswork and conjecture. But then again, nobody understand the economy, and guesswork is as good as it gets. Anyone saying otherwise is either lying to you or lying to himself.
As a Libertarian, I would disagree with your argument. :) The Fed and Bernanke and your "debt-based life-cycle" manipulate interest rates in order to incentivize companies to spend now instead of saving. This has always seemed to be short-sighted. If the company thinks it best to save, it is probably best for them to save. I tend to believe their analysis of their own financial situation. The Fed, however, thinks that saving is bad and uses inflation to force them to spend earlier than they would have. They think this "keeps the economy going". I think it is more likely to be a wasteful short-term stimulus to the economy. The economy isn't just a chart that we need to keep high, it's a collection of a million million personal/corporate decisions, and forcing those decisions to be less optimal for the individuals in ways that may stimulate the chart does NOT necessarily improve the reality.
21 million, but divisible down to 10^-8 parts. So, consider it 2.1 quadrillion over 130 years; not quite so illiquid as BRKA. Agreed about the built-in deflation, though.
HSJ$$*&#^!#+++ATH0
NO CARRIER
Sounds like the current US housing market.
In the end, it's about acquiring wealth and the tried and true scams will always work on any monetary system.
And don't forget you can make the same point with gold or other "inflation-proof non-fiat" currency. Gold only has value because it is desired. In the case of a zombiepocalypse, if the zombies are at your house and you have two vehicles to escape in and one has 1,000,000 tons of gold in the back and the other a shotgun and 100 shells sitting in the passenger seat, which would you take? Or more to the point, as the non-fiat nutters would actually have, one has a sheet of paper declaring that somewhere in some vault 1,000,000 tons of gold belong to you and the other has a shotgun.
The only time something like gold secures your savings is when the problem is local. You can go somewhere else easily and trade your gold. Note, that doesn't work if you can't travel (in gold rushes, iron has been known to be more valuable than gold, as you could use an iron pick to get more gold, but with gold, you couldn't do anything but look at it or trade it for iron to get more gold, or, of course, give up looking for more gold, take what you had, and travel far away from the gold rush back when travel was slow).
In the case of a zombiepocalypse, if the zombies are at your house and you have two vehicles to escape in and one has 1,000,000 tons of gold in the back and the other a shotgun and 100 shells sitting in the passenger seat, which would you take?
The million-ton-payload vehicle would be one hell of a ride, easily capable of rolling through barricades, zombie hordes, even buildings untouched. It would probably be pretty fast without that cargo, too!
Socialism: a lie told by totalitarians and believed by fools.
I was going to object that there are limits to the amount of cash you can conveniently use ($10k transaction limits before attracting attention, etc)... but then again, BitCoin has similar problems (scarcity, lack of secure options for storage, etc). Really, what is the advantage of BitCoin over plain old cash?
Be reasonable: there's no reason someone couldn't be all three.
Your thesis is that Bitcoin values will go up too much, which will mean that Bitcoin values will go down too much.
You've *almost* made it to a proof-by-contradiction; the only remaining step is to actually notice the contradiction...
I'm not in the same camp of the parent poster, "I haven't seen a coherent explanation".
I'm more curious how something like this got off the ground, given an appraisal of the state of the project itself!
1) there is no complete specification; the (sole!) implementation is the spec. This raises serious red flags, tbh.
2) there is no "libbitcoin" that contains the implementation aspects that are important to the spec.
It seems like this is a solid and elaborate use of cryptography that is being employed in a way that Satoshi could easily be slipping holes through under our noses.
I don't think you should view BitCoins as a replacement for "real" currencies just yet as the article implies. You should see it as investing in gold (but safer since we know exactly how many bitcoins there are). Being able to send money anonymously is it's core value.
Thanks for browsing at -1
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This is broken in so many ways, I don't think the governments of the world are exactly quaking in their shoes and/or writing laws to stop this.
I hope not, at least until it gets wide acceptance.
As synaptik has said in another reply, illiquidity is a RTFM issue. :-) No offense... When you hear "Bitcoin", you directly imagine individual cryptographic coins being circled around. It took me a while to get that there actually are no actual coins and what is being recorded is only transactions. There are many brilliant people using/developing on this, so it can't be *that* problematic at least...
I agree that deflation discourages actual use. I find bitcoin extremely useful, and use it almost daily, but my number of transactions severely decreased with the latest surge of value. On the other hand, it's more useful than any kind of money I use, so I don't think I will have a problem spending it once the prices are more stable, even with deflation. At best, it could make me more provident. :-)
How is a bitcoin bubble different from a housing bubble?
It isn't, and that's the problem. Bitcoins are intrinsicly prone to these kind of bubbles (isn't TFA saying the value's gone up by a factor of 4 in a short time?) because they're deflationary rather than inflationary so speculators will hoard them, and that's not conducive to their being actually useful as a currency. Imagine if selling anything (i.e. "buying money") became as difficult as buying a house was in 2007; that's going to happen periodically with bitcoins, which makes it harder to run a business on them.
I am trolling
This sounds like a massive waste of computational power. A trial and error basis to discover a crypto-key that rewards users with virtual coins thats value is being inflated by hoarding and speculation. Nice.
What these economic libertarian types don't understand is that money isn't useful because it's scarce (ie limited supply like gold, though this does make its value incrase) but rather because it is backed up by a comparative amount of goods and services. To put it plainly, money supply = value of goods and services.
If your economic intention is to create an online bubble currency that will be speculated to zero value like the U.S. dollar than you're on the right track, however if your intention is to create a currency that will provide a stable exchange of goods and services to a rapidly-evolving economy I think a trip back to the drawing board is in order.
Being minted under "the authorization of the U.S. Mint" does not make them legal tender! The mint simply gave them permission to make commorative coins that look like antique legal tender.
Citation needed.
Seriously... just about anything you say, "Jane Q. Public", needs to be followed with a citation from now on. Since you obviously don't know what the hell you're talking about most of the time, and you follow people around trolling them.
No actually... I'LL provide the citation, since I know for a fact that you're wrong. Fuck you and your shit. Here. Straight from the U.S. Mint itself. Bullion coins from the U.S. Mint IS LEGAL TENDER.
http://www.usmint.gov/downloads/mint_programs/am_eagles/AmerEagleGold.pdf
Page 2, under "Easy to buy and sell":
American Eagle Gold Bullion Coins, with their unique U.S. government backing, may be sold for cash at many coin and precious metals dealers worldwide. They are also legal tender.
First of all I have to admit up front I haven't fully studied it. But I think I get the idea. You create a virtual resource by computation and trade in it.
Slight problem is that it doesn't have a natural value/use unlike precious metals. Second there is the possibility of a mathematics breakthrough. A quantum computer would crash the economy only to have it restart with a different algorithm. So it only works best as an intermediate transactional denomination and the place to catch people is when they try to convert it which they will.
What about fractional coins? It doesn't seem like it would scale correctly if it actually caught on.
Last I can see market fragmentation of Bitcoin though clones with slightly different rules and methodologies.
I don't want to think about the electrical energy being burned in computation to generate these virtual coins...
Good enough for gambling though.
Question: As I understand it, a bitcoin represents some fraction of global processing power. What happens, if bitcoins become widely accepted, and someone develops new hardware/software ? Won;t they make a killing ?
Back in the what will we do with spam days, there use to be this very funny post, which went something like
Your proposal for spam prevention won't work because (check all that apply)
(a) costs to much (b) relies on users to know something
etc
where is that list when you need it ?
But transactions at stores should be rounded by law. The time it takes to count change is very relevant. Items should still be priced to the penny but it's only the final bill that should be rounded and only if your paying cash. Stores should be required to accept pennies, but stop giving them out.
The Bitcoin author can't control anything. While he could create a rogue transaction (as could anyone) it would have to check out by other users before it'd be accepted in the block, and a bad transaction in a block would mean nobody would accept that block and build upon it.
Examples are payments from nowhere, from accounts without adequate balance, accounts you don't have the signing key for, etc.
Economics is about the seen and unseen. If relative price starts to decrease it becomes more valuable to use than to keep holding onto. It's an equilibration, not a landslide. And it's not velocity that's important, it's the volume of trade. Bitcoin could work with a 10% velocity. Bitcoin is perfectly countable and all standard accounting procedures may used with it. ( I don't get why you think accounting disproves the idea of bitcoin) Also sense authorities, especially taxing authorities don't track or use bitcoin, there is an incentive to spend rather than hold. Sense no other currency offters this. it may be that for a while on the the largest value of bit coin is it just being bit-coin, but this bauble is only enticing if you ever plan to actually trade with them. And yes Bitcoin won't be a good environment to offer credit in until it stabilizes, but so what? Nobody is going to be using bit coin exclusively until it is used extensively (and it's much more likely to be a stable market at that point). There is no reason why you couldn't get credit in USD, and invest it into capital in order to make bit-coin. In fact doing so, during the initial expansion phase of bit coin is likely to give you higher returns than receipts in USD, because anything you make above what you needed to make the payment would make more interest keeping it in your pocket than what you are losing by not adding it to your bank payment. In fact this high interest you complain about is a signal that investment into production for that market is disparately desired.
How am I to ever understand what bitcoin is without the car analogies ???
If there was a zombiepocalypse tomorrow cash currency would become worthless next to things like shotguns or flamethrowers.
False. Cash dollars are an easily transferable scarce resource. Your shotgun guy would accept it as payment for a shotgun, trade it for gasoline with some guy who would trade it for tinned beans with some guy who would trade it for sexual services from your mom who would trade it for protection from you and your shotgun. Scarcity (and confidince in scarcity) is sufficient for tradeability, and tradeability is value.
Velocity is just how often a currency is exchanged. This is an indirect measure of the value of goods and services produced by an economy. Those who trade more often tend to be more highly specialized, and thus produce higher value products. But this is not necessarily always true, so there are caveats. Specialization and trading more often also creates risk, which is bad. Velocity can be built in by confiscating money via force (taxes) and then re-distributing it. Some delusional retards think this is a good thing for some reason.
"I assumed blithely that there were no elves out there in the darkness"
It seems to be a demonstration and aplication of economy rules and as such it can be viewed as an interesting project. However - as far as I understand - it just creates heavy load on PCs with no real value : as far as I understand, you just hash group of letters + some your combinations and wait until you get nice hash - like starting with several zeroes. What is this good for? Just creating more watts, while you could have analysed molecules or space signals instead....
The only value I see is to inject a hash you need to break to the code and let the large network running for you.
And you get paid like 2$ per day (?) for using hardware that costs 10k$. Maybe this is really useful for people that want to change 10kg of heroin for vouchers to some online service.
Governments = parasites. Public institutions = parasites. You = slaves. Where is this free world ?
Recipes for USA bankrupt - http://tinypaste.com/0d66f dd = dollar deluge (printed in the infinity)
And this is just becoming obvious to you?
This is an interesting point that people have raised, even if you are too stupid to see it.
And this WILL escalate over time
If Google really cared they would fix Android Chrome to reflow text, instead of discriminating
Although current economics have not yet been proven, the system has not yet stood the test of time. Maybe with another 75 years of evolution followed by 150 years of stability could it be claimed that current economic theory is stable and proven.
Yes I understand the money velocity and taxation concerns, however I prefer to think though those problem from the new view point that bitcoin provides than to take the existing economic teaching as a basis of fact to build everything else from. Current economic theory is very broken, but not provably less broken than bitcoin theory.
it doesnt have "built in deflation", the total amount of currency asymptotically approaches a limit so if anything it has a monotonically decreasing inflation.
now in practise people losing their wallet will result in a decrease in the money supply, which would result in deflation. but does this have the same effect as say a currency which is becoming more valuable inhibiting investment and purchase of assets which would appreciate at a lesser rate?
perhaps it will be important and therefore common to secure bitcoins by "backing up" the related cryptographic credentials.
the currency can be split into initially transaction computational cost is provided by clients who benefit by receiving bitcoins in a lottery drawn from the remaining unallocated pool in exchange for providing this computational power needed by the mesh network. once the currency has been mostly allocated transaction fees will be introduced to cover the cost of the required computational power.
I am sorry but I really want to mod you as bullshit +1
Taxing authorities won't accept them
- this I find irrelevant since taxing has nothing to do with economy and also I find taxes illegal in economy where governments can print as much money as they want
they don't have a debt-based life-cycle
- once again, how is this a bad thing?
it would create its own valuation bubble where it becomes more valuable to hold the money than it does to invest it.
- you can create bubbles with any kind of money (bricks, gold, bits) as long as you can persuade (read lie to) consumers that it is good think for them
Nobody would be able to borrow in Bitcoins at a reasonable rate of interest
- once again I find interest rates disgusting since by paying interest you are creating money out of thin air (that is how you make bubbles)
Feel free to ignore arguments I posted above since I myself don't find them relevant, my main argument for bitcoins is the fact that there can be only a definite amount of them (and unlike real money this is not a problem for bitcoins since they are divisible to infinite)
OR do you really want to tell me that when somebody prints 10k it doesn't make everyone using that currency poorer by (10000/x)*y where x is the total amount of money on the market and y is the amount of money you own?!?!
Who cares about this? Bitcoin is crap, and right-wing "libertarians" just want to find some new scheme to destroy the republics they embrace only as long as they give bosses and landlords the kind of power they had during Monarchy, and if they don't get it they do everything they can to undermine and destroy the republics. They are a bunch of crooks and exploiters.
As I understand the system, every transaction gets validated by other machines. The computational cost of this validation is compensated by the award of bitcoins. This means that every time a transaction occurs a miner can profit. Hence a bot net miner is constantly able to make money. The more transactions the more profit.
Next following what I understand to be the logic here. If it appears that the validation is too easy then the price of computation will be increased. This will mean that eventually only miners with the lowest overhead costs -- the bot nets-- will be in the business of validation.
I guess one could look at this and say, "well good, now those tards that click on trojans will be performing a public service and paying for their indilligence". Everyone wins in a way. The tards get to be slothful at a price. the rest of us get our transactions validated. And the botnets are busy doing something actually useful to society.
But another way to look at this is that if you leave out food for rats you get more rats not just occupying the same number of rats. With profit to be made we will get more people in the trojan business.
Some drink at the fountain of knowledge. Others just gargle.
Where is the Bitcoin federal reserve? without that you can have infinite inflation overnight.
I create a bank that pays 5% interest on deposits.
1) player A1 deposits M0 bitcoins in my bank.
2) Player A2 borrows Mo bitcoins from my bank
3) player A2 pays M0 to player A3 for some service
4) Player A3 decides to deposit M0 in my bank
5) the bank now has 2*M0 deposits, and M0 is loaned out.
6) The bank now loans out M0 to A4
7) A4 pays A5 who then deposits M0 back in the bank
8) the bank now has 3*M0 deposits and 2*M0 is loaned out.
repeat forever:
even though there was only M0 bitcoins minted, the money supply has expanded to K*M0 where K is arbitratrily large.
THe federal reserve was set up to prevent this infinite expansion of money.
Who is the federal reserve for the distributed bitcoin system?
Some drink at the fountain of knowledge. Others just gargle.