Worse. Let's say that you accept Bitcoin payment years from now and it turns out that that money was part of the MtGox heist. Congratulations, you've now received stolen property, which in many jurisdictions means that it may be taken away from you at any moment, all quite legally.
What you are suggesting makes no legal sense. If you own physical USD that was once used in a crime(99.9% of greenbacks) do you automatically forfeit the assets? At most you have to prove how you legally obtained it under asset forfeiture laws if you are suspected and than its returned to you. Judges in the US have already legally defined bitcoin as Money FYI.
= = = Bitcoin is regulated. It is regulated by the users and the protocol rather than a central authority than can be corrupted or one in which sociopaths naturally gravitate to. = = =
Yeah, as I noted that system ("regulated by the users") was tried from 1500-1880. It didn't work so well, for exactly the reasons now afflicting Bitcoin.
sPh
Correct, but the system you refer to wasn't able to solve the Byzantines' general dilemma as bitcoin can. This technology is balanced so it can work. Time will ultimately tell as to whether we are right or not. Ultimately, most of you may begin using it anyways as a protocol or for escrow services, or because the store gives you a 5% discount like many stores are now, or because some other internet technology using the security of the blockchain for some other service like a DAC .
There are a couple decentralized multi-sig exchanges popping up but they are still new and ultimately if you are trying to invest in bitcoin with fiat you must temporarily trust the exchange until you withdraw the bitcoins.
The correct way to invest in Bitcoin is the following:
1) Localbitcoins.com to find someone locally to purchase from.
2) Start accruing bitcoins by accepting them as payment for services or when you sell things
3) Use a trusted and well regulated exchange like coinbase.com in the US and than transfer the bitcoins out from them to your own wallet in cold storage
The fact that there exists individuals who live exclusively using Bitcoin as a currency is testament to the amount of items you can buy with it directly or you could always buy gift cards with gyft or egifter(I.E. amazon) for free to be able to fill in the gaps of possible items you can buy.
Fuel, cars, land, and other big ticket items are now sold directly with Bitcoin.
So, you're saying that the majority of the community drove Mt Gox into bankruptcy?
Why would you suggest a 10 person company equals a majority of the community? No, I was referring to the inherent theft which is a feature of fiat currencies were your savings are devalued by 5-13% per year in "stable" countries and 20-60% per year in countries with hyperinflation.
It takes 51% of the users to change Bitcoin monetary policy with a hard fork and even after the fact there could exist 2 separate currencies where the other users aren't effected by the theft through inflation, bail outs, and quantitative easing policies. With fiat currencies a few people can make this decision on behalf of everyone even against their wishes.
Wallets only ask for passcodes when you spend or create new transactions so even if you have an infected computer it is very difficult to capture the passcode. The trojan would have to find and actively monitor the target for some time and thus is why such thefts are extremely rare at the moment.
Cold storage makes bitcoin safe from all trojans and viruses. This is what I refer to when following a few basic rules that are easy for geeks but too complicated for my grandmother. This is why there is a role for multisig hot wallets to remove risk and hardware wallets in the future to eliminate these risks and still be usable by the technically illiterate.
The value of real money is in being a by-currency for minerals and materials with actual, practical utility. Where is the practical utility for bitcoin?
The practical utility of Bitcoin:
1) Provides a deflationary currency in a sea of inflationary options. Useful if you live in a country with mild inflation like the US, extremely useful in countries with hyperinflation like Argentina.
2) Allows you to use escrow for free and remove all counter party risk with mutisig authentications- bitrated.com is one example.
3) A much cheaper and secure payment protocol where you can reduce merchant processing fees 2-7% lower than credit cards and not even worry about the volatility because you instantly transfer into fiat of your choice. - bitpay.com
4) No chargeback risk is great for merchants.
5) No risk of frozen accounts for consumers or businesses.
6) Provide an option in third world banks for the unbanked or underbanked
7) Ability to instantly send money around the world instantly and not have to wait days for wires or ACH payments.
8) Cost to send money is half a cent to nothing for almost any amount you can think of.
9) International currency that gives you the option of not worrying about merchants banning you. An option of free speech where you can donate to non-profits like wikileaks.
10) Smart contract systems, Time locks, DAC's , Oracles, ect....
The list is much larger than this but the important take away is that Bitcoin isn't just a currency but a new technology which is extremely useful because it has over a billion dollars worth of infrastructure behind it and efficiently solves the Byzantines' generals dilemma. It is likely that Bitcoin will be used by most in the future whether they are even aware of it or not because of what it can accomplish just like how most use HTTP and TCP/IP protocols daily and have no idea what they are.
Doesn't this story of MtGox completely invalidate the idea of Bitcoin? It was made to appear safe due to an algorithm, but obviously it can disappear without a trace and then what? There was never any sovereign authority behind that currency. Thus no international muscle to go track down the bad guys or figure out what happened. If anything, the international banking community will simply say "told you so..."
Exactly the opposite. Mtgox's failure stresses the need for the original purpose of Bitcoin; removing the need for counter-party trust. Storing your assets in any third party or hot wallet goes against the intention of the Bitcoin protocol and is foolhardy. Bitcoin is just as susceptible to being stolen by con artists, governments, and corporations as greenbacks are. Some users learned the hard way that Bitcoin is as safe or dangerous as you choose to make it.
"And then after a while we throw those records out."
"...so all I've got to do is conceal my theft until the records get purged?"
"Pretty much!"
"..."
This is factually incorrect. Transaction pruning or using Simplified Payment Verification clients like electrum only is an option for those not wanting to run a full node and download the whole blockchain. Many run full nodes and there will alway be distributed full records of all transactions.
In itself, bitcoins have no value. The only value comes from what other values people exchange bitcoins for. It's a parasite economy that depends on non-bitcoin money for backing.
By this logic, paypal, western union, moneygram, ect.. are all worth nothing and the stockholders are being fleeced.
We've already got a currency that robs its holder of 2% of its value every year by design, why would we need another?
USD actually robs users of 7-13% a year; 2-4% inflation is a ruse. The CPI was "adjusted" to not include tracking inflation from items such as fuel and food, which IMHO are essential to us all. USD and the Euro are far better than many other currencies which further emphasizes the need for Bitcoin because it isn't just about solving first world problems but lending assistance to countries with hyper-inflation or the unbanked.
Interesting bit of revisionism if you are implying that spreadsheets and regulations are more efficient at preventing theft. Con-artists and Sociopaths naturally will manipulate and steal from traditional investors and the Bitcoin community alike. The difference with Bitcoin is that it takes a majority of the community to steal wealth from the economy(and thus irrationally devaluing their own savings) vs less than 1% that routinely manipulate and steal with fiat.
Bitcoin is regulated. It is regulated by the users and the protocol rather than a central authority than can be corrupted or one in which sociopaths naturally gravitate to.
And if you don't want to rely in third-party gatekeepers, how most people will use it? In your phone? in your (for the majority, windows) pc?
Once you begin to use wallets on smartphones and your personal computer you begin to realize how much easier it is and more secure(If you follow a few basic rules) than anything else. It is easier, more flexible, and a lot more inexpensive than online banking.
The problem with Bitcoin right now is that it is still in its early developmental stages where even though I find it extremely easy to secure, my grandmother doesn't without relying on a third party. Software and wallets are becoming more user friendly for the less technical people everyday and pretty soon hardware wallets will shrink down to the size of a key chain attachment and be found everywhere.
Bitcoin is interesting, but for something so libertarian requires way too much third-party interaction in order to practically use it, and those third-party gatekeepers are the perfect targets.
Bitcoin was designed to remove the need to use gatekeepers or third parties. There is absolutely no need to use any exchange once you enter the ecosystem. Once you have some bitcoins and accept bitcoins for payment there is no need to store your assets in hot wallets or exchanges especially since you can purchase almost anything directly with bitcoin right now.
The United States of America has 314 million people with a near 100% literacy rate, a highly educated workforce, diversified economy, and 5,000 nuclear weapons. What does bitcoin have?
Bitcoin is an open source concept and codebase. A public ledger that solves the Byzantines' generals problem. A protocol with some groundbreaking uses to remove the need for counter party trust.
A useful idea is stronger than the full force of any military and not so easy to destroy. Government backed currencies have always shown to eventually fail. Cryptocurrencies are here to stay as they are merely more efficient tools.
The government can and has made bartering commodities as tender illegal in the past -
http://en.wikipedia.org/wiki/E...
At least with bitcoin they can't so easily seize your assets as gold.
It's funny how they want it both ways, eh? No regulation, but then they want dependable banks.
Choose one or the other. You do not need to use an exchange, just like you don't need to use a bank.
The beauty of bitcoin is that you can have it both ways . Banks could be setup to only store 1 key in a multi-sig authentication wallet and thus preventing any corporation, government, or hacker from stealing funds and at the same time as having the convenience of added piece of mind that you can lose one of the milti-sig private keys stored locally and still control your funds.
This is already being done with escrow services - http://bitrated.com/ which eliminate any counter party risk.
It is not fair to make gross generalizations that we all want to store our assets in a vulnerable central authority. To many of us this defeats one of the main purposes of Bitcoin strengths.
Yes, its called bitcoin. Bitcoin is as private or public as you choose it to be. It is secure or insecure as you choose it to be. It is fairly easy for most slashdot readers to secure their bitcoins using either multi-sig authentications, time locks, cold storage, or even signing their identity to a wallet.
You ultimately have the choice as to how you want to treat your assets, or use a combination of the above to get benefits of security and privacy. The problem with bitcoin is with the users unfamiliarity and with the lack of user friendly tools being developed to assist those in need.
Uh, does the underlying Bitcoin format and protocol make this P2P arrangement necessary to mine any new coins? Can it be fundamentally changed to do so? No?
Anyone can solo-mine. The advantage of mining in a pool is you can get quicker payouts and collaborating to mine allows you to have a small advantage and get greater rewards because of the rapid rise in difficulty thus being rewarded a fraction of a solved block earlier is more profitable than waiting to solve your own as the hash-rate difficulty rises.
Here is an easy way to understand the difference between a p2p mining pool and centralized one.
1)GHash.IO is like a union of independent contractors who can come and go at anytime and the operators can choose to damage bitcoins reputation if their union membership ever increased over 50%. It would be irrational for them to do so but not impossible. Double spending has been done a couple times before during the last hard fork with one transaction of ~10K but the user returned the money. If the operators of GHash.IO decided to perform this attack they would slightly ruin bitcoins reputation and cause a mass exodus of their miners which would instantly stop their behavior by the loss in hashing power.
2) P2P mining pools are like a union of independent contractors without any leaders who can execute double spend attacks even if their hashing power exceeds 50%. They get the same benefits of cooperative mining but are restricted in a framework where no one can manipulate the blockchain.
They've prototyped, flight tested, build and deployed whole squadrons of stealth aircraft without much evidence in the public domain, if they wanted to do this, they could.
Many of the Bitcoin users are anarchists and libertarians, or in other words some of the most paranoid crowd around. It doesn't take many leaks or information for this crowd to freak out and start taking steps to protect the network if any rumor gets out. The government cannot keep much of a secret anymore as evidenced by wikileaks.
But the real question is, *why* would they want to? I don't think they care.
I think you are right. Bitcoin is insignificant and a joke in most of their eyes. This is good news for bitcoin as the network stability and security needs a few more years to mature without outside intervention to insure its current growth rate. At this stage its unlikely to be stopped by anyone but it certainly can be slowed.
Payment exchangers like bitpay who facilitate merchant processing show the highest amount of purchasing activity of actual goods during periods where bitcoin is rapidly rising in value. This contradicts claims made from economists who support inflationary models who predict that deflation will encourage hoarding and thus drive down spending. While individuals using deflationary currency may be more likely to save and spend their money on items that they really need(One would think these are good behaviors, right?), they still feel the wealth effect of their new found savings and therefore are more likely to spend and be generous during times where bitcoin is rapidly appreciating with planned deflation.
Perhaps Smart people actually occasionally need to buy things when they need them?
Slashdot Mirror
Fact eh? What's the name of this individual then?
Started with a reporter doing it for a week, than a newly married couple doing it for 100 days- http://lifeonbitcoin.com/
Worse. Let's say that you accept Bitcoin payment years from now and it turns out that that money was part of the MtGox heist. Congratulations, you've now received stolen property, which in many jurisdictions means that it may be taken away from you at any moment, all quite legally.
What you are suggesting makes no legal sense. If you own physical USD that was once used in a crime(99.9% of greenbacks) do you automatically forfeit the assets? At most you have to prove how you legally obtained it under asset forfeiture laws if you are suspected and than its returned to you. Judges in the US have already legally defined bitcoin as Money FYI.
Yeah, as I noted that system ("regulated by the users") was tried from 1500-1880. It didn't work so well, for exactly the reasons now afflicting Bitcoin.
sPh
Correct, but the system you refer to wasn't able to solve the Byzantines' general dilemma as bitcoin can. This technology is balanced so it can work. Time will ultimately tell as to whether we are right or not. Ultimately, most of you may begin using it anyways as a protocol or for escrow services, or because the store gives you a 5% discount like many stores are now, or because some other internet technology using the security of the blockchain for some other service like a DAC .
There are a couple decentralized multi-sig exchanges popping up but they are still new and ultimately if you are trying to invest in bitcoin with fiat you must temporarily trust the exchange until you withdraw the bitcoins.
The correct way to invest in Bitcoin is the following:
1) Localbitcoins.com to find someone locally to purchase from.
2) Start accruing bitcoins by accepting them as payment for services or when you sell things
3) Use a trusted and well regulated exchange like coinbase.com in the US and than transfer the bitcoins out from them to your own wallet in cold storage
HAHAHAHAHAHA!!!! Oh wait...you're serious, aren't you?
The fact that there exists individuals who live exclusively using Bitcoin as a currency is testament to the amount of items you can buy with it directly or you could always buy gift cards with gyft or egifter(I.E. amazon) for free to be able to fill in the gaps of possible items you can buy.
Fuel, cars, land, and other big ticket items are now sold directly with Bitcoin.
So, you're saying that the majority of the community drove Mt Gox into bankruptcy?
Why would you suggest a 10 person company equals a majority of the community? No, I was referring to the inherent theft which is a feature of fiat currencies were your savings are devalued by 5-13% per year in "stable" countries and 20-60% per year in countries with hyperinflation.
It takes 51% of the users to change Bitcoin monetary policy with a hard fork and even after the fact there could exist 2 separate currencies where the other users aren't effected by the theft through inflation, bail outs, and quantitative easing policies. With fiat currencies a few people can make this decision on behalf of everyone even against their wishes.
Wallets only ask for passcodes when you spend or create new transactions so even if you have an infected computer it is very difficult to capture the passcode. The trojan would have to find and actively monitor the target for some time and thus is why such thefts are extremely rare at the moment.
Cold storage makes bitcoin safe from all trojans and viruses. This is what I refer to when following a few basic rules that are easy for geeks but too complicated for my grandmother. This is why there is a role for multisig hot wallets to remove risk and hardware wallets in the future to eliminate these risks and still be usable by the technically illiterate.
Good point. There is a role for trustless decentralized exchanges and muti-sig exchanges here.
The value of real money is in being a by-currency for minerals and materials with actual, practical utility. Where is the practical utility for bitcoin?
The practical utility of Bitcoin:
1) Provides a deflationary currency in a sea of inflationary options. Useful if you live in a country with mild inflation like the US, extremely useful in countries with hyperinflation like Argentina.
2) Allows you to use escrow for free and remove all counter party risk with mutisig authentications- bitrated.com is one example.
3) A much cheaper and secure payment protocol where you can reduce merchant processing fees 2-7% lower than credit cards and not even worry about the volatility because you instantly transfer into fiat of your choice. - bitpay.com
4) No chargeback risk is great for merchants.
5) No risk of frozen accounts for consumers or businesses.
6) Provide an option in third world banks for the unbanked or underbanked
7) Ability to instantly send money around the world instantly and not have to wait days for wires or ACH payments.
8) Cost to send money is half a cent to nothing for almost any amount you can think of.
9) International currency that gives you the option of not worrying about merchants banning you. An option of free speech where you can donate to non-profits like wikileaks.
10) Smart contract systems, Time locks, DAC's , Oracles, ect....
The list is much larger than this but the important take away is that Bitcoin isn't just a currency but a new technology which is extremely useful because it has over a billion dollars worth of infrastructure behind it and efficiently solves the Byzantines' generals dilemma. It is likely that Bitcoin will be used by most in the future whether they are even aware of it or not because of what it can accomplish just like how most use HTTP and TCP/IP protocols daily and have no idea what they are.
Doesn't this story of MtGox completely invalidate the idea of Bitcoin? It was made to appear safe due to an algorithm, but obviously it can disappear without a trace and then what? There was never any sovereign authority behind that currency. Thus no international muscle to go track down the bad guys or figure out what happened. If anything, the international banking community will simply say "told you so..."
Exactly the opposite. Mtgox's failure stresses the need for the original purpose of Bitcoin; removing the need for counter-party trust. Storing your assets in any third party or hot wallet goes against the intention of the Bitcoin protocol and is foolhardy. Bitcoin is just as susceptible to being stolen by con artists, governments, and corporations as greenbacks are. Some users learned the hard way that Bitcoin is as safe or dangerous as you choose to make it.
"And then after a while we throw those records out." "...so all I've got to do is conceal my theft until the records get purged?" "Pretty much!" "..."
This is factually incorrect. Transaction pruning or using Simplified Payment Verification clients like electrum only is an option for those not wanting to run a full node and download the whole blockchain. Many run full nodes and there will alway be distributed full records of all transactions.
In itself, bitcoins have no value. The only value comes from what other values people exchange bitcoins for. It's a parasite economy that depends on non-bitcoin money for backing.
By this logic, paypal, western union, moneygram, ect.. are all worth nothing and the stockholders are being fleeced.
We've already got a currency that robs its holder of 2% of its value every year by design, why would we need another?
USD actually robs users of 7-13% a year; 2-4% inflation is a ruse. The CPI was "adjusted" to not include tracking inflation from items such as fuel and food, which IMHO are essential to us all. USD and the Euro are far better than many other currencies which further emphasizes the need for Bitcoin because it isn't just about solving first world problems but lending assistance to countries with hyper-inflation or the unbanked.
Interesting bit of revisionism if you are implying that spreadsheets and regulations are more efficient at preventing theft. Con-artists and Sociopaths naturally will manipulate and steal from traditional investors and the Bitcoin community alike. The difference with Bitcoin is that it takes a majority of the community to steal wealth from the economy(and thus irrationally devaluing their own savings) vs less than 1% that routinely manipulate and steal with fiat.
Bitcoin is regulated. It is regulated by the users and the protocol rather than a central authority than can be corrupted or one in which sociopaths naturally gravitate to.
And if you don't want to rely in third-party gatekeepers, how most people will use it? In your phone? in your (for the majority, windows) pc?
Once you begin to use wallets on smartphones and your personal computer you begin to realize how much easier it is and more secure(If you follow a few basic rules) than anything else. It is easier, more flexible, and a lot more inexpensive than online banking. The problem with Bitcoin right now is that it is still in its early developmental stages where even though I find it extremely easy to secure, my grandmother doesn't without relying on a third party. Software and wallets are becoming more user friendly for the less technical people everyday and pretty soon hardware wallets will shrink down to the size of a key chain attachment and be found everywhere.
Bitcoin is interesting, but for something so libertarian requires way too much third-party interaction in order to practically use it, and those third-party gatekeepers are the perfect targets.
Bitcoin was designed to remove the need to use gatekeepers or third parties. There is absolutely no need to use any exchange once you enter the ecosystem. Once you have some bitcoins and accept bitcoins for payment there is no need to store your assets in hot wallets or exchanges especially since you can purchase almost anything directly with bitcoin right now.
The United States of America has 314 million people with a near 100% literacy rate, a highly educated workforce, diversified economy, and 5,000 nuclear weapons. What does bitcoin have?
Bitcoin is an open source concept and codebase. A public ledger that solves the Byzantines' generals problem. A protocol with some groundbreaking uses to remove the need for counter party trust. A useful idea is stronger than the full force of any military and not so easy to destroy. Government backed currencies have always shown to eventually fail. Cryptocurrencies are here to stay as they are merely more efficient tools.
Your metaphor is apropos if you include the nutritional benefits from digesting it. There are many utilitarian benefits to bitcoin.
The government can and has made bartering commodities as tender illegal in the past - http://en.wikipedia.org/wiki/E... At least with bitcoin they can't so easily seize your assets as gold.
It's funny how they want it both ways, eh? No regulation, but then they want dependable banks.
Choose one or the other. You do not need to use an exchange, just like you don't need to use a bank.
The beauty of bitcoin is that you can have it both ways . Banks could be setup to only store 1 key in a multi-sig authentication wallet and thus preventing any corporation, government, or hacker from stealing funds and at the same time as having the convenience of added piece of mind that you can lose one of the milti-sig private keys stored locally and still control your funds. This is already being done with escrow services - http://bitrated.com/ which eliminate any counter party risk. It is not fair to make gross generalizations that we all want to store our assets in a vulnerable central authority. To many of us this defeats one of the main purposes of Bitcoin strengths.
Yes, its called bitcoin. Bitcoin is as private or public as you choose it to be. It is secure or insecure as you choose it to be. It is fairly easy for most slashdot readers to secure their bitcoins using either multi-sig authentications, time locks, cold storage, or even signing their identity to a wallet. You ultimately have the choice as to how you want to treat your assets, or use a combination of the above to get benefits of security and privacy. The problem with bitcoin is with the users unfamiliarity and with the lack of user friendly tools being developed to assist those in need.
Uh, does the underlying Bitcoin format and protocol make this P2P arrangement necessary to mine any new coins? Can it be fundamentally changed to do so? No?
Anyone can solo-mine. The advantage of mining in a pool is you can get quicker payouts and collaborating to mine allows you to have a small advantage and get greater rewards because of the rapid rise in difficulty thus being rewarded a fraction of a solved block earlier is more profitable than waiting to solve your own as the hash-rate difficulty rises. Here is an easy way to understand the difference between a p2p mining pool and centralized one. 1)GHash.IO is like a union of independent contractors who can come and go at anytime and the operators can choose to damage bitcoins reputation if their union membership ever increased over 50%. It would be irrational for them to do so but not impossible. Double spending has been done a couple times before during the last hard fork with one transaction of ~10K but the user returned the money. If the operators of GHash.IO decided to perform this attack they would slightly ruin bitcoins reputation and cause a mass exodus of their miners which would instantly stop their behavior by the loss in hashing power. 2) P2P mining pools are like a union of independent contractors without any leaders who can execute double spend attacks even if their hashing power exceeds 50%. They get the same benefits of cooperative mining but are restricted in a framework where no one can manipulate the blockchain.
They've prototyped, flight tested, build and deployed whole squadrons of stealth aircraft without much evidence in the public domain, if they wanted to do this, they could.
Many of the Bitcoin users are anarchists and libertarians, or in other words some of the most paranoid crowd around. It doesn't take many leaks or information for this crowd to freak out and start taking steps to protect the network if any rumor gets out. The government cannot keep much of a secret anymore as evidenced by wikileaks.
But the real question is, *why* would they want to? I don't think they care.
I think you are right. Bitcoin is insignificant and a joke in most of their eyes. This is good news for bitcoin as the network stability and security needs a few more years to mature without outside intervention to insure its current growth rate. At this stage its unlikely to be stopped by anyone but it certainly can be slowed.
Deflation is bad because SMART people stop buying things that will be cheaper tomorrow
The data shows this is not the case. https://blockchain.info/charts/n-transactions http://blog.bitpay.com/2013/12/bitpay-drives-explosive-growth-in.html
Payment exchangers like bitpay who facilitate merchant processing show the highest amount of purchasing activity of actual goods during periods where bitcoin is rapidly rising in value. This contradicts claims made from economists who support inflationary models who predict that deflation will encourage hoarding and thus drive down spending. While individuals using deflationary currency may be more likely to save and spend their money on items that they really need(One would think these are good behaviors, right?), they still feel the wealth effect of their new found savings and therefore are more likely to spend and be generous during times where bitcoin is rapidly appreciating with planned deflation.
Perhaps Smart people actually occasionally need to buy things when they need them?