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BitInstant CEO Says World Operates "On an Inferior Monetary System"
hypnosec writes "BitInstant's CEO Charlie Shrem and Erik Voorhees were invited to speak about virtual currency at the NACHA (the North American Payments Association) Annual Global Payments Forum held in Rio de Janeiro. At the conference the duo stated that the world operates 'on an inferior monetary system'. One of the more interesting parts of the whole forum was how Bitcoin as a currency and transaction system "works within current legal frameworks." A presentation by Senior Legal Counsel to the Federal Reserve titled: 'The Implications of Dodd-Frank Section 1073' sheds light on requirements that need to be fulfilled by "Remittance Payment Company" (RPC) guidelines. This law requires such companies to disclose a lot of information about money transactions. This is where Bitcoin as a currency and system collide head-on with the law."
person A trying to sell product X, says all other products are inferior to his product
the bitcoin system would require only trivial mods to do remove the privacy and track the "who" as well as the "what".
That's not how it works. First and foremost, the creation of public addresses can be done entirely offline, without connecting to the Internet and without any information leaving RAM. I can request money to be sent to one of these addresses and only the person sending it knows that it belongs to me as there is no other record of its existence. An infinite number of such addresses could be created and there is no way to tie them directly to me.
Secondly, any such non-trivial changes to the network would require nearly everyone on the network to agree, which is EXTREMELY unlikely given Bitcoin's user base and ideology.
1 - Ten minutes max, usually.
2 - Not true, there are several wallet tools now that don't hold the blockchain locally.
I think your comments are fair, but not entirely accurate any more;
I agree with them to a degree, and have raised those issues a number of times in the #bitcoin IRC channel on freenode;
The response to 1) is well, sure, transaction confirmations are not instant. So what? Neither are credit-card transactions. They can take days, even weeks to confirm. The banks agree to go with instant-confirmation based on probability. In a real-world implementation of bitcoin, I suspect that people would accept small transactions without 6 confirms. In fact, in a real-world implementation, I think most stores could do a lot worse than go down the "Starbucks" route; you have an automated payment app on your phone (or accessible via the web, or via a payment machine at the counter that uses your card number etc.). This "starbucks" account is filled by bitcoin, by you, at home. Or in store etc. but the point being that you fill it before you need it, 9 times out of 10. Ergo that reduces the need for instant confirms. Since it's only a small amount of cash in your Starbucks account, it mitigates the worries over hyperinflation & governmental interference that running all your finances in this way would raise.
2) Not every device needs a full copy of the database now. They have thin-use clients. I'm not sure on the exact specifics of how it does it, but I know it's supported, and will become "the norm" for most domestic users; I believe the main such desktop app is called "Electrum". The network as a whole isn't endangered as long as a fair number of clients continue to use the whole block chain apps. And a lot of people will. But on your iPhone or whatever, sure, thin-client, instant usage, no waiting on downloading the block chain.
Really, the way to get BTC into common, physical-world use, is to go down the accounts system aka "starbucks". A lot of retail chains are already set up for such a system, small retailers can easily roll their own thanks to the likes of OpenTransaction, and it makes it very easy to get btc into common usage without the worries over physical terminals, having to accept low confirm levels or make customers wait for ages etc.
Not just interesting. Wonderful.
You could characterize the use of cash exactly the same way. I like paying cash. It would be nice if I could pay cash over the intertubes. If Bitcoin does (the equivalent of) that, lots of people are going to like it for lots of reasons, some nice and some not so nice.
Just like cash.
Alice doesn't put your Oxytocin in the mail until she sees your transaction confirmed by six or seven nodes on blockchain.info -- the people calculating the blocks are validating the transactions against the rules of the system. Once the money passing to Alice is "spent" on the blockchain, all of the peers processing transactions will see your wallet as empty and any attempt to debit BTCs from a wallet that's empty will be rejected.
This can be broken if you get a peer to accept your transaction, stick it in as block and lie that it's validated; but other peers are seeing your transaction too and computing their own blocks against the truth on the chain. Six or seven different nodes have to agree on the validity of your transaction, and you have no control over which nodes will be able to validate a block containing your transaction. If you got some vast percentage of the computing power on the block chain (not a vast amount of power per se, but a commanding proportion of the total cycles computing transactions), you might be able to get enough confirmations to make your false transaction look valid. And that's a problem, and it's a way that a large single guild could possibly create rule changes, but at his time it's probably not a major issue.
Don't blame me, I voted for Baltar.