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Will Legitimacy Spoil Bitcoin?

Posted by timothy on from the biggest-portion-is-the-lion's-share dept.

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.'"

3 of 490 comments (clear)

  1. That's the price you pay by allaunjsilverfox2 · · Score: 5, Insightful

    No matter what you trade, if it has value, the state will look to control it's function.

    --
    Restore the madness of youth's lechery
    1. Re:That's the price you pay by shaitand · · Score: 5, Insightful

      "You have a bitcoin. Great! Now how do you know that it's unique? The transaction was signed? Fine. But how do you know that it was legit before you received it?

      No matter how you slice it, there must be a central authority to indicate which are real, and which are false. A hack there can cause all flavors of theft, fraud, and forgery. If you have no central authority, then you risk fracturing your money supply at the exchange level, with each exchange becoming its own authority."

      Having come up with a decentralized P2P solution to this problem is the reason people are so excited about this Bitcoin thing. ;)

      Every piece of every Bitcoin ever to exist has a transaction trail from it's point of origin to the current address at which it resides. Verifying these trails is what miners do. It isn't simply that you send me some bitcoin and I trust it or I trust the hash. You send me Bitcoin and the network begins validating the transaction from the point it was mined to you to me over and over again with it eventually becoming part of that trail.

      In order to have even the tiniest minute fraction of fake Bitcoin you'd have control >51% of all the mining power. The more people mining, the harder that feat is to accomplish. The Bitcoin network can determine if someone actually has >51% btw.

  2. Legitimacy by Grashnak · · Score: 5, Insightful

    I can't question its legitimacy until I see some evidence that it has any.

    --
    Life needs more saving throws.