the security property of a digital cash system that matters here is the protection against double spending.
That's exactly what I was talking about.
Again you demonstrate that you don't actually understand how Bitcoin works.
That is probably the most annoying part about Bitcoin: not only is it insecure, but we've known how to solve the same problem in a secure way for decades.
What's stopping you from releasing your own, superior, cryptocurrency? It's what all cool kids are doing right now and plenty of people who think they can do better than Bitcoin are actively trying to prove it.
1. The blockchain size is increasing exponentially at the moment because the number of Bitcoin users is also increasing exponentially.
Because the number of Bitcoin users is increasing exponentially, and also because known optimizations which will greatly reduce the amount of data needed to be preserved have not yet been implemented, because the need to do so does not yet exist.
A bitcoin is a number that has a SHA-1 hash of a particular form.
By design, you do not need to know what the number is to recognize someone's claim to have it; similarly, you do not need to know what someone's private key is to know that they know it. Bitcoins are not the only numbers like this.
Incorrect.
There are no discrete bitcoins. There are only transaction outputs which have spent by having been included as an input to a new transaction and transactions which have not yet been spent.
Every valid unspent output is verifiably traceable back to a valid coinbase via a hash chain.
Is "a billion" supposed to impress anyone with any amount of experience in cryptography? Would you use a cipher that could be defeated by a billion modern CPUs?
If you think the security we are talking about has anything whatsoever to do with cryptography you don't understand how Bitcoin works.
The issue here is not the cryptographic security of transaction signing, but rather the process by which nodes arrive at a consensus regarding the ordering of transactions. An attacker would need the ability to calculate 55 trillion SHA256 hashes per second in order to have a 50% chance of successfully asserting a different ordering than the rest of the network agreed to in the most recent block. The odds of altering history decrease exponentially with each prior block.
Except in this case Bitcoin miners built a network that would take about a billion quad core i7 processors to match. Right now the only credible attackers would be those who have an entire chip foundry at their disposal, and the window for that kind of attack to be viable is gradually closing.
as I understand it, the Bitcoin mining chain is designed to release about the same amount of coins per unit time to the mining network
This is true, but that is not the only source of income for miners and is intended to decline over time. Once the network grows to about the size of PayPal's transaction rate miners will get half their revenue from optional transaction fees that users pay to speed up processing time. As the network grows beyond that the introduction of new bitcoins will become increasingly insignificant and miners will be more properly thought of as being in the transaction processing business.
Bitcoin miners use GPUs, which are orders or magnitude better than CPUs at Bitcoin mining.
Miners are moving to ASICs, which are an order of magnitude more efficient than the FPGAs they replace which were already an order of magnitude more efficient than GPU mining.
GPU mining was how things were done a year ago, but in terms of the speed at which Bitcoin is evolving "last year" means "back in ancient times".
There's a small possibility it could be beneficial if they have an arrangement with the power company that would give them extremely low rates in exchange for using power during off-peak times, but even then it would make more sense to buy ASICs or FPGAs as throttleble loads to arbitrage electricity rates with.
From what I have gathered, mining via CPUs is, at this point, not cost effective.
They aren't even close to being cost effective any more. Two years ago this would have been a good plan, but now even the best general purpose CPUs are three technological generations behind the state of the art.
Unless you are getting your electricity at extraordinarily low costs, close to free, the increase in your electric bill will exceed the revenue you can bring in by an order of magnitude or two.
Even if all your computers had the best ATI graphics card that you could use to mine with it you'd be lucky to break even.
A year ago I would have provided links for you, but now I'll just suggest the burden of proof rightfully belongs to anyone claiming that a project larger than Bitcoin exists.
Right now, the most powerful private supercomputer for commercial use is the Hermit
Except for that 600 petaFLOP private supercomputer for commercial use which also happens to be the most powerful computer ever constructed by mankind for any purpose.
Lots of people are being caught offguard by Bitcoin.
The negativity seems to stem from an inner conflict struggling with issues surrounding the foreign concept of monetary freedom.
It is like you open the cage door on a chimp that has been locked up for decades, basically they go nuts... they look at the door and their eyes tell them it is open but their brain cannot comprehend it because it has never seen the cage door open. Soon the will poke their noses out of the cage (buy a saotshi or two), run around a little and them run back inside the cage (USD)... observing it makes for great lolz, the big, bold freedom campaigners confronting a possible freedom they never really believed in, just like to talk about.
It's rare to see someone post something so perfectly opposite of the truth.
Herbert Hoover spent over $3 billion via the Reconstruction Finance Corporation to bail out Wall Street cronies, instead of letting them go bankrupt as Warren Harding did in 1920. That's why the 1930s depression did not end until a significant fraction of Europe's population was murdered and their industrial production destroyed while the 1920 depression only lasted 18 months.
Unsurprisingly, Herbert Hoover was the Treasury Secretary in 1920 who argued for bailouts at the time but was ignored. When he was in charge and able to implement exactly what he advocated a decade before the Great Depression was the result.
Politicians bribe government workers in exchange for votes with benefits that are paid for by money taken from other people who have no say in the matter.
In all the discussions about the evils of the "private" sector one factor is conveniently overlooked: large institutional investors in the form of public sector pension funds which are desperately seeking excess profits to make good on political promises to government retirees. Most of these funds based their actuarial projections on permanent 8% growth, which anyone who knows what an exponent is can tell you is impossible. An investment that grows at a rate faster than the economy would eventually need to be more than 100% of the economy.
You want to know where the push to increase margins at all cost and quarter-by-quarter thinking came from? Large institutional investors demanding the impossible because somebody thought it was possible to legislate math.
4.) Simutaneously, between steps three and four - supply chains are formed in the bitcoin economy entirely priced in bitcoin, severing the relationship to the currencies it will replace.
This is already beginning to happen. Online stores have been able to use payment processors for a while now to accept Bitcoins from customers anywhere in the world. Now it's possible for that store to pay for its hosting and domain registration directly in Bitcoins, without needing to convert to local currency.
People are adopting BItcoin because it's the only way to store savings in a form that can not be arbitrarily diluted, frozen, or remotely confiscated. They are adopting Bitcoin because it gives them the ability to transfer arbitrarily large amounts of cash instantly and inexpensively to any place in the world free from any possibility of prior restraint. They are adopting it because it allows them to accept payments from customers anywhere without the risk of payment fraud. Everyone knows the deflationary spiral theory is bunk, because somebody bought the computer you are using right now even through they knew it would be cheaper in the future, so that's not very effective as a scare tactic.
Slashdot Mirror
It's about making it prohibitively expensive for an attacker to rewrite history.
That's exactly what I was talking about.
Again you demonstrate that you don't actually understand how Bitcoin works.
What's stopping you from releasing your own, superior, cryptocurrency? It's what all cool kids are doing right now and plenty of people who think they can do better than Bitcoin are actively trying to prove it.
Because the number of Bitcoin users is increasing exponentially, and also because known optimizations which will greatly reduce the amount of data needed to be preserved have not yet been implemented, because the need to do so does not yet exist.
Incorrect.
There are no discrete bitcoins. There are only transaction outputs which have spent by having been included as an input to a new transaction and transactions which have not yet been spent.
Every valid unspent output is verifiably traceable back to a valid coinbase via a hash chain.
Nobody can create valid UTxOs out of thin air.
If you think the security we are talking about has anything whatsoever to do with cryptography you don't understand how Bitcoin works.
The issue here is not the cryptographic security of transaction signing, but rather the process by which nodes arrive at a consensus regarding the ordering of transactions. An attacker would need the ability to calculate 55 trillion SHA256 hashes per second in order to have a 50% chance of successfully asserting a different ordering than the rest of the network agreed to in the most recent block. The odds of altering history decrease exponentially with each prior block.
Except in this case Bitcoin miners built a network that would take about a billion quad core i7 processors to match. Right now the only credible attackers would be those who have an entire chip foundry at their disposal, and the window for that kind of attack to be viable is gradually closing.
This is true, but that is not the only source of income for miners and is intended to decline over time. Once the network grows to about the size of PayPal's transaction rate miners will get half their revenue from optional transaction fees that users pay to speed up processing time. As the network grows beyond that the introduction of new bitcoins will become increasingly insignificant and miners will be more properly thought of as being in the transaction processing business.
And just how many CPUs would you need to calculate 30 trillion SHA256 hashes per second?
Miners are moving to ASICs, which are an order of magnitude more efficient than the FPGAs they replace which were already an order of magnitude more efficient than GPU mining.
GPU mining was how things were done a year ago, but in terms of the speed at which Bitcoin is evolving "last year" means "back in ancient times".
Is that really the most efficient use of the laptop battery?
There's a small possibility it could be beneficial if they have an arrangement with the power company that would give them extremely low rates in exchange for using power during off-peak times, but even then it would make more sense to buy ASICs or FPGAs as throttleble loads to arbitrage electricity rates with.
They aren't even close to being cost effective any more. Two years ago this would have been a good plan, but now even the best general purpose CPUs are three technological generations behind the state of the art.
Unless you are getting your electricity at extraordinarily low costs, close to free, the increase in your electric bill will exceed the revenue you can bring in by an order of magnitude or two.
Even if all your computers had the best ATI graphics card that you could use to mine with it you'd be lucky to break even.
A year ago I would have provided links for you, but now I'll just suggest the burden of proof rightfully belongs to anyone claiming that a project larger than Bitcoin exists.
I'm sure that every supercomputer can be broken down until you get a subassembly that is not capable of anything worthwhile by itself.
Bitcoin, as the largest distributed supercomputing project ever, is doing an increasing amount of useful commercial work every day.
Except for that 600 petaFLOP private supercomputer for commercial use which also happens to be the most powerful computer ever constructed by mankind for any purpose.
Non-falsifiable accusations are a pretty standard way unethical people use to silence dissent when the truth is not on their side.
Lots of people are being caught offguard by Bitcoin.
No, I'm an atheist. I gave up on prayer along with other assorted superstitions.
It's rare to see someone post something so perfectly opposite of the truth.
Herbert Hoover spent over $3 billion via the Reconstruction Finance Corporation to bail out Wall Street cronies, instead of letting them go bankrupt as Warren Harding did in 1920. That's why the 1930s depression did not end until a significant fraction of Europe's population was murdered and their industrial production destroyed while the 1920 depression only lasted 18 months.
Unsurprisingly, Herbert Hoover was the Treasury Secretary in 1920 who argued for bailouts at the time but was ignored. When he was in charge and able to implement exactly what he advocated a decade before the Great Depression was the result.
Exactly which part of what I said is not true?
Politicians bribe government workers in exchange for votes with benefits that are paid for by money taken from other people who have no say in the matter.
In all the discussions about the evils of the "private" sector one factor is conveniently overlooked: large institutional investors in the form of public sector pension funds which are desperately seeking excess profits to make good on political promises to government retirees. Most of these funds based their actuarial projections on permanent 8% growth, which anyone who knows what an exponent is can tell you is impossible. An investment that grows at a rate faster than the economy would eventually need to be more than 100% of the economy.
You want to know where the push to increase margins at all cost and quarter-by-quarter thinking came from? Large institutional investors demanding the impossible because somebody thought it was possible to legislate math.
This is already beginning to happen. Online stores have been able to use payment processors for a while now to accept Bitcoins from customers anywhere in the world. Now it's possible for that store to pay for its hosting and domain registration directly in Bitcoins, without needing to convert to local currency.
People are adopting BItcoin because it's the only way to store savings in a form that can not be arbitrarily diluted, frozen, or remotely confiscated. They are adopting Bitcoin because it gives them the ability to transfer arbitrarily large amounts of cash instantly and inexpensively to any place in the world free from any possibility of prior restraint. They are adopting it because it allows them to accept payments from customers anywhere without the risk of payment fraud. Everyone knows the deflationary spiral theory is bunk, because somebody bought the computer you are using right now even through they knew it would be cheaper in the future, so that's not very effective as a scare tactic.