I don't know where you get your information from. Shavers took deposits in bitcoins, promising to pay out again in bitcoins, with 7% or so weekly interest. The payouts went out for quite some time, presumably funded by new deposits, and then Shavers simply did a runner with the bitcoins he had accumulated. So it was very much a classic Ponzi scam.
That's what happens in an outbreak - a transmissible disease gains sufficient foothold in a community to spread wider than it usually does. It doesn't happen all the time, otherwise it wouldn't be unusual. Herd immunity provides protection when circumstances otherwise would conspire to allow for a disease to suddenly spread across a population.
I fully agree. However, there's a difference between saying your backups will be lost to you if you forget your password and saying the data will be properly encrypted with a key known to you alone...
But the curve doesn't provide any answers! There's no method for deciding where on the curve we are at the moment, although the author seems to have arbitrarily decided on a point.
I wouldn't say mixing services are only for the really paranoid. I think it's a good idea for anyone with significant funds in bitcoins to put some distance between their long-term storage and their spending wallets. You wouldn't want that bar owner in Kreuzberg to see you have thousands of dollars or more worth of bitcoins just because you paid them for a beer. If Bitcoin keeps gaining traction and people do not start mixing their coins, someone will get hurt because of this - mark my words.
Yes, and that's true, although in a pretty technical sense. Bitcoins are entries in a public ledger, the blockchain. They are quite resilient to destruction. The private encryption keys that allow one to transfer ownership of those coins, however, can be lost. The coins remain, but are for all practical purposes unspendable.
The AC in question was making a technical point about the difference between bitcoins and encryption keys. They did not claim personal backups aren't necessary, or that the blockchain is of help to a user who has lost their keys. I'm not sure it was a very pertinent point - the original claim was that bitcoins would "run out". They won't, but it's not because the blockchain is what it is. It's because there's no reason the software can't be modified to allow arbitrary divisibility. As long as even a fraction of a bitcoin is usable, any amount of trade can be conducted with it by dividing the coin up into smaller pieces.
Also, you can, of course, let others store your bitcoins for you. It's just not a particularly good idea at this time, since there is not, and in fact can not be, any company reputable enough to act as a bank for bitcoins. In my view, anyway. Later on, assuming Bitcoin continues to gain traction, I expect that problem will be remedied. The simplest solution would be for an existing financial institution to start offering Bitcoin banking, although I expect bitcoin deposits won't have the same kind of legal protections as fiat deposits do for quite a while to come.
If someone breaks the encryption:
Hard to say, exactly. Assuming a full breach of SHA256, things would be pretty bad, the worse the longer it takes for the breach to be publicized. Once it is, the consensus would likely be to cease accepting Bitcoin transactions until a fix is issued - likely moving to a different algorithm, and considering all or some transactions since the breach retroactively invalid. There would be a lot of drama over this, understandably, and I don't know how long such a fix would take to implement technically. It would be a big deal and Bitcoin might not survive it, but that's not a given. Then again, being able to break SHA256 at will would be quite remarkable and would have serious repercussions for a lot of people quite apart from Bitcoin users. I'm not at all convinced breaking Bitcoin would be the best way to use such a trump card.
If someone steals and publicizes "decryption keys": I assume you mean people's private keys used to control their bitcoins? This is like any other theft - if someone steals large amounts of cash and decides to redistribute it, robin-hood style, the victims are left without their money and some other people have more money than before, and a moral dilemma to go with the funds.
The title is misleading. Bitcoin transactions aren't being taxed, as far as I can tell. Sales denominated in bitcoins are subject to VAT (or similar), and government-currency-denominated gains from selling bitcoins for other currency will be taxed. Sending bitcoins from one wallet to another isn't, per se, subject to tax. As far as I can tell.
I stopped making assesments of the balance of the bitcoin market long ago, but generally we agree. Except: I think if people pounce on mining, the cost of producing a coin will go up. Why would an increase in miners cause a decrease in bitcoin valuation?
I suspect if potatoes were trivial to transport anywhere, they'd be OK as currency. I fully expect to see a pretty big rethinking of the difference between barter and currency-mediated trade as computerized, unfalsifiable bookkeeping systems like bitcoin make it easier to transfer value between different physical places.
"Last I checked (which wasn't very long ago), it was costing in the neighborhood of around $30 to mine a bitcoin, if you add up the amortized equipment cost, time and electricity. Yet Bitcoins went up as high as $250. "
Currently miners find 3600 new bitcoins a day, on average, however much resources they expend in the process. Some fraction of those are held, some are sold immediately or close to it. If daily global demand for bitcoins is more than the fraction of new coins sold, a price above the cost of mining is inevitable. That doesn't mean there isn't a bubble right now, but it's pretty clear the "proper" price of a bitcoin is determined by more than just the cost of mining.
The people who rely on "illicit" transactions probably don't find the dollar quite as convenient for some purposes. Ask Wikileaks how well that worked out for them.
As for the ponzi allegations - again - there's no ponzi here. A ponzi is where someone fraudulently promises returns on investment, and uses the money received to pay investors the promised returns in order to make it appear as if the business were functioning. There is no promise of return on investment with Bitcoin. There isn't even anyone to make such a promise, so calling it a ponzi is a bit daft.
Please, do criticize the system as much as you can. Just please also stick to the facts.
Define "produced".
Bitcoin aims to offer a better way to transfer wealth than we had today. To a lot of people, that is "of value".
As for the end of new minting - Your optimism is commendable, but seeing as that won't happen this century, you're not likely to be alive to see it. In any case, the currency has been deflating as it is - The market value has been rising faster than the supply. I'm not seeing a spiral.
Slashdot Mirror
Preventing economic growth seems like a solid environmental move.
I'm pretty sure most USians will turn into card-carrying communists any time if that's what it takes to keep fuel prices down.
I don't know where you get your information from. Shavers took deposits in bitcoins, promising to pay out again in bitcoins, with 7% or so weekly interest. The payouts went out for quite some time, presumably funded by new deposits, and then Shavers simply did a runner with the bitcoins he had accumulated. So it was very much a classic Ponzi scam.
2,000 g is 2 kilograms, surely? 2 milligrams would be 0.002 g. Perhaps you meant "mg" instead of "g"?
Is it?
That's what happens in an outbreak - a transmissible disease gains sufficient foothold in a community to spread wider than it usually does. It doesn't happen all the time, otherwise it wouldn't be unusual. Herd immunity provides protection when circumstances otherwise would conspire to allow for a disease to suddenly spread across a population.
I fully agree. However, there's a difference between saying your backups will be lost to you if you forget your password and saying the data will be properly encrypted with a key known to you alone...
And you would trust the encryption implementation to protect your data?
"Stopped thinking at birth", you mean.
But the curve doesn't provide any answers! There's no method for deciding where on the curve we are at the moment, although the author seems to have arbitrarily decided on a point.
Could you tell me where you got your crystal ball, I'd like one, too!
The fact that they can even tell the difference
How is that a fact? How would one readily tell whether a transaction has come from, say, a Silk Road wallet?
Sorry, pla, you were actually making a different point than I meant to reply to. In any case... hide your coins, folks, one way or the other!
I wouldn't say mixing services are only for the really paranoid. I think it's a good idea for anyone with significant funds in bitcoins to put some distance between their long-term storage and their spending wallets. You wouldn't want that bar owner in Kreuzberg to see you have thousands of dollars or more worth of bitcoins just because you paid them for a beer. If Bitcoin keeps gaining traction and people do not start mixing their coins, someone will get hurt because of this - mark my words.
Yes, and that's true, although in a pretty technical sense. Bitcoins are entries in a public ledger, the blockchain. They are quite resilient to destruction. The private encryption keys that allow one to transfer ownership of those coins, however, can be lost. The coins remain, but are for all practical purposes unspendable.
The AC in question was making a technical point about the difference between bitcoins and encryption keys. They did not claim personal backups aren't necessary, or that the blockchain is of help to a user who has lost their keys. I'm not sure it was a very pertinent point - the original claim was that bitcoins would "run out". They won't, but it's not because the blockchain is what it is. It's because there's no reason the software can't be modified to allow arbitrary divisibility. As long as even a fraction of a bitcoin is usable, any amount of trade can be conducted with it by dividing the coin up into smaller pieces.
Also, you can, of course, let others store your bitcoins for you. It's just not a particularly good idea at this time, since there is not, and in fact can not be, any company reputable enough to act as a bank for bitcoins. In my view, anyway. Later on, assuming Bitcoin continues to gain traction, I expect that problem will be remedied. The simplest solution would be for an existing financial institution to start offering Bitcoin banking, although I expect bitcoin deposits won't have the same kind of legal protections as fiat deposits do for quite a while to come.
Replying to your what-happens:
If someone breaks the encryption:
Hard to say, exactly. Assuming a full breach of SHA256, things would be pretty bad, the worse the longer it takes for the breach to be publicized. Once it is, the consensus would likely be to cease accepting Bitcoin transactions until a fix is issued - likely moving to a different algorithm, and considering all or some transactions since the breach retroactively invalid. There would be a lot of drama over this, understandably, and I don't know how long such a fix would take to implement technically. It would be a big deal and Bitcoin might not survive it, but that's not a given. Then again, being able to break SHA256 at will would be quite remarkable and would have serious repercussions for a lot of people quite apart from Bitcoin users. I'm not at all convinced breaking Bitcoin would be the best way to use such a trump card.
If someone steals and publicizes "decryption keys":
I assume you mean people's private keys used to control their bitcoins? This is like any other theft - if someone steals large amounts of cash and decides to redistribute it, robin-hood style, the victims are left without their money and some other people have more money than before, and a moral dilemma to go with the funds.
Quantum computers:
I'll point you to the Bitcoin wiki entry on the issue: https://en.bitcoin.it/wiki/Myths#Quantum_computers_would_break_Bitcoin.27s_security
There's no indication the fork and the price crash are related.
If you burn your cash, can you call someone to get it back? At least you can have backups of your Bitcoin wallets.
The title is misleading. Bitcoin transactions aren't being taxed, as far as I can tell. Sales denominated in bitcoins are subject to VAT (or similar), and government-currency-denominated gains from selling bitcoins for other currency will be taxed. Sending bitcoins from one wallet to another isn't, per se, subject to tax. As far as I can tell.
I stopped making assesments of the balance of the bitcoin market long ago, but generally we agree. Except: I think if people pounce on mining, the cost of producing a coin will go up. Why would an increase in miners cause a decrease in bitcoin valuation?
I suspect if potatoes were trivial to transport anywhere, they'd be OK as currency. I fully expect to see a pretty big rethinking of the difference between barter and currency-mediated trade as computerized, unfalsifiable bookkeeping systems like bitcoin make it easier to transfer value between different physical places.
"Last I checked (which wasn't very long ago), it was costing in the neighborhood of around $30 to mine a bitcoin, if you add up the amortized equipment cost, time and electricity. Yet Bitcoins went up as high as $250. " Currently miners find 3600 new bitcoins a day, on average, however much resources they expend in the process. Some fraction of those are held, some are sold immediately or close to it. If daily global demand for bitcoins is more than the fraction of new coins sold, a price above the cost of mining is inevitable. That doesn't mean there isn't a bubble right now, but it's pretty clear the "proper" price of a bitcoin is determined by more than just the cost of mining.
The people who rely on "illicit" transactions probably don't find the dollar quite as convenient for some purposes. Ask Wikileaks how well that worked out for them.
As for the ponzi allegations - again - there's no ponzi here. A ponzi is where someone fraudulently promises returns on investment, and uses the money received to pay investors the promised returns in order to make it appear as if the business were functioning. There is no promise of return on investment with Bitcoin. There isn't even anyone to make such a promise, so calling it a ponzi is a bit daft.
Please, do criticize the system as much as you can. Just please also stick to the facts.
Define "produced". Bitcoin aims to offer a better way to transfer wealth than we had today. To a lot of people, that is "of value". As for the end of new minting - Your optimism is commendable, but seeing as that won't happen this century, you're not likely to be alive to see it. In any case, the currency has been deflating as it is - The market value has been rising faster than the supply. I'm not seeing a spiral.