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Will Legitimacy Spoil Bitcoin?
New submitter F9rDT3ZE writes "Salon writer Andrew Leonard examines the U.S. Treasury's Financial Crimes Enforcement Network's (FinCEN) first 'guidance' regarding 'de-centralized virtual currencies,' noting that Bitcoin's supporters call it a 'currency of resistance,' while others suggest that 'the more popular Bitcoin gets, whether as a symbol of resistance or a perceived safe haven in financially troubled times, the more government attention it will inevitably draw, and the more inexorably it will be sucked into existing regulatory structures.'"
easy enough to make that the quantity can expand to support a growing market
Not even close. They are designed to be hard to make, to only be made at a pre-determined rate, and for new supplies to eventually run out. Bit-coins are designed to be limited in supply.
09F91102 no, 455FE104 nope, F190A1E8 uh-uh, 7A5F8A09 that's not it, C87294CE no. Ah! 452F6E403CDF10714E41DFAA257D313F.
And even then, only possible for a moment.
That processing power - by the way - is currently equivalent to about 613 PetaFLOPS.
"What exactly stops the government from coming up with some other collection of numbers with different properties and claiming that they are also bitcoins?"
Other people agreeing with them? The "properties" of a Bitcoin aren't secret. Claiming something is a Bitcoin isn't something a person does, it is something a computer does. There is a complete transaction trail for every coin back to the moment it was mined including the ability to verify that it qualified at the moment it was mined and every client has a copy of it. When you send me a coin that trail is audited repeatedly by third party miners only becomes part of the audit trail with enough verification.
Every hacker and cryptographer and their dog has been trying to find a way to do what you suggest for the past four years (though most have already given up) and the best they've found is a theoretical way that requires controlling >51% of all mining power. A government that was willing to spend enough money might be able to do that (there is more demand than mining hardware as it stands so you can't just throw money at it) but the community can tell if someone actually has >51% of the mining power.
This is a good question, and a normal thing for the network. You would have a temporary chain fork, and the branch that gets the next block first, wins. If the second blocks on two chains also happen at the same time, the third block will be the decider, and so on. That's why it's standard to wait 6 blocks before accepting the transaction.
So, the longer chain always wins, because, there is a very high probability that more processing power went into it.