Bitcoin Is Not Anonymous 279
An anonymous reader writes "Researchers from University College Dublin have conducted an analysis of anonymity on Bitcoin, and found it is not inherently anonymous, and that in many cases, users and their transactions can be identified. They use techniques such as context discovery and flow analysis to investigate and visualize an alleged theft of Bitcoins, which, at the time of the theft, had a market value of approximately half a million U.S. dollars."
Bitcoin is the new Twitter! (Score:5, Insightful)
Slamming Bitcoin (Score:2)
The concept of a non centralized electronic form of money could effectively remove the ability of government and banks to tax people through the issue of debt & through inflation. it would remove the central authority and control authorizing and monitoring transactions.
At the moment, our money is issued as debt, you may not have thought about why that is the case, but it is quite deliberate.
So I am of the opinion that there are some very wealthy and powerful people paying Slashdot to disparage Bitcoin.
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The concept of a non centralized electronic form of money could effectively remove the ability of government and banks to tax people through the issue of debt & through inflation. it would remove the central authority and control authorizing and monitoring transactions.
If we ignore the fact that most of the value of a currency is derived from its necessity for paying taxes and settling government debts, then sure, that statement is accurate. Except that in doing so, we are ignoring the very thing that makes money valuable. If Bitcoin could not be exchanged for other currencies, it would be worthless; it's value comes only from the fact that you can ultimately "cash out."
So I am of the opinion that there are some very wealthy and powerful people paying Slashdot to disparage Bitcoin.
I am a graduate student; trust me, I am neither wealthy nor powerful, I am just someone who took
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Why couldn't they be exchanged for goods and services? Sure you start with currencies because they are the most liquid, and bitcoin has a very speficially compelling utility in that it can be used for international transfers outside the banking system. However it is already finding uses apart from currency exchange.
As far as being otherwise "worthless
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And it astonishes me how full of shit most BitCoin supporters are. "Oil producing nations would not accept dollars unless we held a gun to their heads." Really? You're gonna resort to some stupid, conspiratorial, anti-government rhetoric? Is it not possible that they want our dollars, as they are accepted in many places around the world, through FREE CHOICE of those peoples? No, of course not. The only reason anyone would accept US Dollars is because they were forced to.
Finally a Tech Related Article About Bitcoin (Score:2)
Too bad it is merely a academic explanation of what was already known about Bitcoin. At least I can point to this when someone asked for references when I criticize Bitcoin as impractical for the many purposes fanatic proponents advertise.
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I was imagining a conversation between myself and a reasonable person that has been informed by fanatics.
investigate the victim (Score:2, Insightful)
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You know you can unload that monopoly money onto (other?) idiots for real money...
Half a million dollars to whom? (Score:4, Insightful)
I wouldn't give you jack for them. Can I pay my utility bills with them? No. Can I may my mortgage with them? No. Can I go into most shops or online stores and buy stuff with them? No.
They're nothing more than a financial toy for people to play around with and waste energy on GPU calculations which they justify by reeling off a list of websites no one has heard of where you can buy useless crap with them.
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Well... you can buy illegal drugs from Silk Road with them. If it wasn't for that, I'd imagine that Bitcoins would have no monetary value whatsoever.
Amusingly, the people doing that are doing so because they think that Bitcoins aren't traceable. This article doesn't help that delusion.
Medical use of controlled substances (Score:2)
Well... you can buy illegal drugs from Silk Road with them.
But can you buy a senator or two so that they'll get taken down to CII or lower, which any doctor can prescribe?
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Hope more people see this comment. You can't do jack with bitcoins at the moment. Who knows, maybe in the future we can but for now:
News for nerds? Maybe. Stuff that matters? Hell no.
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The same could be said for quite a lot of things, for instance World of Warcraft characters. But some of those have sold for hundreds of thousands of dollars.
Not everything has to be tangible to have a value (the entire concept of copyright, for instance, credit cards, pyramid schemes). And not everything that is tangible has value (Zimbabwean currency, for instance).
To the right buyer, a bit of paint slapped on a canvas in a vague square is worth millions. It's just a question of finding a buyer. Consi
Difficulty of finding someone (Score:2)
That said, I bet you could find *someone* who wanted to part with money in exchange for a certain amount of Bitcoins.
The value derived from that is limited due to the difficulty of finding someone. Once more well-known merchants start accepting BTC payment for goods [bitcoin.it], the value proposition might become easier to see. Let me know when that has happened.
What a load of drivel (Score:2)
Bitcoin is supposed to be a currency. WoW characters or items are NOT a currency not is anybody pretending it to be. Neither are paintings currency, there is no exchange anywhere in the world that even pretends at giving a dollar price for a painting. At best you got auction houses but next thing you will be claiming my labour is a currency just because I can sell it.
Bitcoin by claiming to be a currency claims to be something more then trade items that have a value if someone is willing to pay it. A dollar
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You can get hosting for them. To me that seems genuinely useful. A lot of stuff that you could do that people might give you bitcoins for require an online presence. Maybe you don't want to receive *only* bitcoins, but it does overcome some of the many problems that might come up with something like Paypal. Also, there are a surprisingly large number of people willing to give you US dollars for bitcoins. The daily volume is considerably higher than I would have thought reasonable. But there you go...
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You can say the same about gold coins.
I'll take any you happen to have lying around off your hands.
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Back when Pokemon cards came out, I talked with a friend about them and he agreed they were the dumbest things ever. Stupid concept, stupid game, and at its root just cardboard with a bit of ink
Re:Half a million dollars to whom? (Score:4, Interesting)
Bitcoin happens to be one of those things for me. I mine bitcoin, but I don't hold onto it hoping it will make me rich, and I don't care if it ever takes off as a currency. I just get a nice paycheck when I cash them in to someone else.
I used to be a futures trader. I had no interest in a railcar full of cattle, or a boxcar full of corn, yet at any given time I might have held contracts for dozens or hundreds of both. Their was no intent to do anything with the underlying commodities, just a desire to hopefully sell the contract for more than I bought it for.
And if we want to completely remove the physical tie, I also used to trade in foreign currencies. We didn't care what any particular currency could buy, just whether we expected it to go up or down relative to another currency. Holding Yen was the same as holding Bitcoin. I can't pay my mortgage with Yen, or my utilities, without exchanging it to U.S. Dollars.
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Top-Posting? On Slashdot? Isn't there a special spam/fool filter removing this kind of lower people?
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You can have the sum total of my Bitcoins but I will trade them at a total of $0.50 a coin which is well below the market price. So if you would please deposit $0.00 into my account you can have them.
The biggest problem is that in general people don't value Bitcoins, the only people who do are those who are Bitcoin fanatics. It is somewhat similar to the people who preach buy gold now. At least gold has some use in a high tech society, and in general people place some intrinsic value on that soft yellow me
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these as [wikipedia.org] alternate [wikipedia.org] currencies [wikipedia.org].
Those are terrible trade goods because they can be returned at extremely high velocity if the receiving party feels like reverting the deal or would simply like more, perhaps your entire stock. If society gets to the point of .22 rimfire being the medium of exchange, actually trading .22 rimfire to someone who can/will "return" it to you is probably the worst mistake you could possibly make.
Now vacuum packed mylar bags of rice, that is safe to trade... Or water filtration apparatus. Or, literally, aspiri
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Since they're "worthless" to you, would you mind giving me all of yours?
I think the point is that Viol8 hasn't bought any.
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Re:Half a million dollars to whom? (Score:4, Interesting)
Just on the off chance that you're not lying, what utility, mortgage lender, and shops accept Bitcoin in payment?
All of them. Just like none of them technically will accept my payment using payroll and dividend checks with my name on them, yet I've always managed to pay my creditors anyway with a couple extra steps. I once got some cash for selling something on craigslist, and I spent that cash at the food store, and thats possibly the only time in my life I've directly received and spent money without the financial industrial complex making a commission off me.
I can convert BTC into $ faster, easier, and with lower fees than any other currency. Not any other digital currency, but any currency... at all. I can actually convert BTC into $ with lower fees than I can convert small change into bills using that "coin-star-change" kiosk thingy at the food store. It is absolutely insane that its cheaper, faster, and easier to convert digital money into paper money dollars than convert coins into paper money.
I recently purchased some cool ham radio microwave electronics kits/pcbs/components from a "well known" (in the business) company in Australia. I'm building a ham radio propagation beacon using some of their weirder subassemblies combined with some weird subassemblies I already own, which is why I tolerate dealing with an island on the other side of the planet instead of off the shelf from locals like DEMI or making my own stuff from mouser and minicircuits. Anyway it was a freaking nightmare to pay them thru paypal, probably intentionally done by paypal to encourage us to use ebay and make them even more fees, but after a week of agony we're both finally happy, they got my dough and I got my parts and paypal made way the heck too much money off this transaction, for what little they did. If I ever purchase from .au again, its gonna be via a friend in .au who I will pay in BTC. Paying double postage is still cheaper than paying paypal, and being a friend in the hobby he can merely add my order to his existing order(s), so it's not really double postage anyway. Even if I round up and let him keep the change, I'd rather give my money to a buddy than to paypal.
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Good luck going into a Bureau de Change and coming away with something for your bitcoins.
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Slashdot and Bitcoin (Score:4, Interesting)
In order to analyse whetehr Slashdot is overly preoccupied with Bitcoin, I have conducted a rigorous scientific analysis. My methodology relies on the key fact that Google knows everything. To draw on the wisdom of Google, I typed slashdot into my Google search bar. The results are revealing:
Google suggests (in this order):
slashdot
slashdot rss
slashdotted
slashdot wiki
slashdot bitcoin
Phrases such as "slashdot linux", "slashdot news" and "slashdot " did not appear.
I'm still working on the conclusions.
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I doubt this means that bitcoin is more prevalent that linux in /.
Probably it means that /. is one of the few places where bitcoins appear many times, while linux appears in a lot more of places. So, in the eyes of Google, "bitcoin" would be more particular to slashdot than "linux", but I am almost sure that linux appears more.
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In ye olden days it would have been "slashdot ebook" "slashdot e-ink". How they missed "slashdot paket" is a mystery to me.
Re:Slashdot and Bitcoin (Score:4, Informative)
slashdot rss
slashdot effect
slashdot reader
slashdot.org
slashdot wiki
No bitcoin mentions on the first page either.
Re:Slashdot and Bitcoin (Score:4, Informative)
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Why didn't you, then?
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I get the same as the parent comment, I have not searched for bitcoin.
slashdot
slashdot rss
slashdotted
slashdot wiki
slashdot bitcoin
*shrug* :-)
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I wish... (Score:3, Interesting)
People need to learn the difference between anonymity and pseudonymity. Bitcoin is not anonymous, and neither are so many other things mistakenly labeled anonymous.
In the context of Slashdot:
AC == Anonymous
handle == pseudonymous
handle linked to meatspace identity == identified
Pseudonymous actions are those where an arbitrary identifier (handle, public key fingerprint, assigned account number) completely replaces the meatspace identity a person has been assigned by government.
Pseudonymous actions by a specific identifier (such as as Bitcoin key) can be linked to other actions by that identifier.
Anonymous actions have no primary key linking together events by a person or group of persons acting in concert.
An anonymous payment would be something like cash in the mail, so long as the envelope is devoid of any identifer, assigned or pseudo, which could connect that envelope and its contents to another action by the person who sent it.
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A good post but with all due respect you won't get anywhere on /. without a standard /. car analogy
Anonymous is a plain vanilla daily driver with no plates and the VIN and serial numbers torched off and otherwise is moments away from getting the chop shop treatment. If you wipe the fingerprints off the controls, I think it would be quite a challenge to figure out who owns it.
Pseudonymous is a rather "unique" customized car and no plates, like a race track car. Everyone trivially knows it on sight, but it
So, who is the thief? (Score:4, Interesting)
What they fail to do is identify the thief!
Perhaps the margin of their paper was too small to include the thief's name.
Re:So, who is the thief? (Score:4, Insightful)
We don't set out to to de-anonymise the thief - we are researchers, not law enforcement, and we are just using that as an example to show its possible to trace the flow of Bitcoins around the network.
It is possible to use Bitcoin in a way that is almost certainly anonymous, in the same way it is possible to get almost certain anonymity on the Internet, by using encryption, onion routing, and never associating your identity with your actions.
Our point is that you don't get this anonymity automatically, and that most casual users of Bitcoin may not be anonymous, even though many of them may believe they are.
The system looks more anonymous than it is.
This, of course, is something we've already discussed ad nauseum here. :)
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who's the theif? (Score:2)
First of all, absolutely no service is anonymous, you are just trusting different entities with the information. Some people say bitcoin is anonymous because it doesn't require state ID and a signature to send money, which is a fine definition. Identities can trivially be created or destroyed in bitcoin, and if someone is careful, then it can be very hard to prove who controls which identity. I find it funny that the whole premise of the article is that it's not anonymous, and for their case study they p
Nothing more than academic research-grant grabbing (Score:2)
That bastard 15iUDqk6nLmav3B1xUHPQivDpfMruVsu9f !! Call the cops! :v/
This is the perfect example of the self-perpetuating machine that IS modern, academic research-grant grabbing.. ;)
Tweeks
One-to-one? (Score:2)
So, while most comments so far seem to suggest that most of Slashdot doesn't want to hear about Bitcoin, I'm posting in the hopes that one or two people here actually understand how it works.
The network is imperfect in the sense that there is, at the moment, a one-to-one mapping between users and public-keys.
This strikes me as entirely fucking wrong. There is a one-to-many mapping here -- while one key belongs to one user, a user can (and should) have many keys.
Or is it that they're admitting that they make this assumption?
Also, this:
The presence of a Bitcoin mining pool (a large red vertex) and a number of public-keys between it and WikiLeaks' public-key is interesting.
Not really. I'd guess most Bitcoins now are originally mined in a mining pool. The number o
Comment removed (Score:4, Insightful)
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Honestly, I think the government should back something like this with real money (given, at very small, managea
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Intrinsic value means that it can be used for something useful. The fact that expensive resources have been expended in making it doesn't in itself give it intrinsic value; there needs to be a way to convert it back into something useful.
Take for example the British 10p coin. That has an intrinsic value of 4.7p[1] because that is the value of the copper and nickel used in making it. There is an additional cost to melt down the metal and stamp it to the correct shape which makes it less likely that people
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I call BS! It's certainly a waste of energy.
While I tend to agree, opponents of Bitcoin seem to be falling into a Streisand Effect trap - the louder you shout, the more you hurt your cause.
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The 'work' involves searching for a very hard to find hash. The result has to be legitimately random, in order to prevent tampering.
If you can figure out how to process 'real data' and still keep it 'random', then you can certainly raise it.
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widespread monetary systems, such as banks and credit card companies, also spend energy, arguably more than Bitcoin would.
I'm hardly a "environmentally minded individual", but this rationale kind of just bugs me. It's like saying "SUVs are great because they use less fuel than Semis do!"
Re:Scaaam.... (Score:4, Insightful)
What would you have it be, then? If you gave out proportionately more BTC as the number of users grow, the inflation would be insane. So it's 500 BTC per hour, divided among everyone. Yeah, as the number of people grows, your slice becomes tiny. Now you have to earn (or exchange earned money for) bitcoins. Why is it shocking to have to earn your currency?
Bitcoin at its core isn't about making money through mining. It's about having a currency that gets rid of a lot of the disadvantages of current paper currency and payment processing systems. The rapid growth of people participating is making it much more valuable in that regard. You only get "next to nothing" if you were looking for a free handout. For the rest of us, it's a way to actually buy goods and services. For me, the advantage is I dislike and distrust Paypal, and I very much welcome a replacement that isn't tied to yet another flimsy or greedy company.
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If you gave out proportionately more BTC as the number of users grow, the inflation would be insane.
Would that actually be a problem? If you buy bitcoins as/when you need them, inflation wouldn't bother you when using them. It would only prevent people from hoarding them - which, guess what, is a good thing.
So it's 500 BTC per hour, divided among everyone
Would that it were. But no, it's far worse than that, the amount given out per hour decays exponentially. Which is insane.
Why is it shocking to have to earn your currency?
It's not. It's shocking that early adapters don't have to. Why should I consider bitcoins worth my work, when other people got them for free?
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It's a problem. Right now, the currency has to be stable enough to trade $USD to BTC, buy things in BTC, and then trade BTC back to $USD, without a large fluctuation in value. If mining gave exponentially increasing money supply, the exchange rate would be spiraling down insanely fast.
In the future it would be even better if the BTC was a reasonably stable value store (like the dollar) so that you could simply receive and then spend BTC directly instead of as a proxy for USD.
No one got them for free. Whe
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So instead you have a system designed to create insane levels of deflation, and to make the early adopters as rich as a ponzi scheme.
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Not that I have any stake in this game, but didn't early adopters run a greater risk that their investment would be useless?
In the end, the only thing that matters is whether it is adopted by critical mass or not, and/or accepted by governments. Much like standards :) You could even start your own bitcoin2, using whatever rules you think are fair, and try to get people interested.
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"Funny of how that almost matches the definition of a pyramid scheme."
The funny part is that's how gold, stocks, bonds, and many other things work.
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And what do those first at a new gold discovery get? Oh yeah, more gold with much less work/cost than those who arrive later.
So physical gold mining is almost a pyramid scheme? And while physical gold mining technically isn't a Ponzi scheme...
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>crunching numbers for research such as Folding@Home
Number of widely-successful global currencies created through bitcoin mining: 0
Number of cancers cured through folding at home: 0
Given that neither distributed computing network has proven successful, I'll stick with the one that earns me real money for my work.
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Number of widely-successful global currencies created through bitcoin mining: 0
And bitcoin has only been around for so long. I don't care about bitcoin, nor do I plan to use it (or think that this will happen), but I don't think you should expect change to happen that quickly.
I'll stick with the one that earns me real money for my work.
I agree.
Re:Scaaam.... (Score:5, Insightful)
That energy is actually put to a good use - it provides security for the block chain against double-spending attacks, by making them computationally infeasible. And it gives pretty good value for the money: as far as costs go for a payment-processing network, it's damned cheap compared to what Visa or Paypal charges.
Yes, early adopters come out well. That's true in any venture. But at the end of the day, that doesn't mean it won't be useful as a payment processing network. The amount that early adopters will get out of this utterly pales in comparison to what the big financial corporations are raping you for.
If you think THIS is a scam, read up more on fractional-reserve banking. The debt-driven US dollar is the biggest ponzi scheme ever.
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If you think THIS is a scam, read up more on fractional-reserve banking. The debt-driven US dollar is the biggest ponzi scheme ever.
Sounds like something that should land a person in federal pound-me-in-the-ass prison.
Re:Scaaam.... (Score:5, Funny)
The debt-driven US dollar is the biggest ponzi scheme ever.
It's not a ponzi scheme if EVERYBODY plays.
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Actually, it still is. The money supply can only keep expanding as long as debt keeps increasing. Once everybody has taken on all the debt they can handle, the money supply will *have* to contract (which will be catastrophic to the economy), or the fed will have to issue money like mad to keep stringing it along (which will be catastrophic to the economy). The pyramid still eventually runs dry even if everyone's bought in.
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Actually, it still is. The money supply can only keep expanding as long as debt keeps increasing. Once everybody has taken on all the debt they can handle, the money supply will *have* to contract (which will be catastrophic to the economy), or the fed will have to issue money like mad to keep stringing it along (which will be catastrophic to the economy). The pyramid still eventually runs dry even if everyone's bought in.
So, how did the debt contract during the Clinton years?
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Paraphrasing: "At the time of writing the total Bitcoin economy was worth $500,000."
Most penny-stock companies can puff-up $10M of market cap on less hot-air than Bitcoin promoters have expended.
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It is possible, but highly unlikely that Bitcoin will be used on as widespread a basis as paypal, let alone Visa (and MasterCard). If you think that when widespread, that the bitcoin system will not be used by banks and intermediaries to perpetuate a fractional-reserve system of credit (possibly by forking the bitcoin system), I think that you are going to be disappointed even if bitcoin becomes popular. There might be a few takers on the other side of that bet on intrade or at the long now foundation.
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The p
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I'm not sure what your reply had to do with my post. However, I generally agree with you, except technically the part about, "the number of bitcoins in the system is hard coded and fixed". The bitcoin network can be forked by anyone with credibility. Credibility being highly subjective. Relative to the current bitcoin network a fork needs to have equal or better credibility to gain a better market share. But you alluded to that in your last sentence, "t's highly possible someone might create Bitcoin 2.0 an
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That energy is actually put to a good use - it provides security for the block chain against double-spending attacks, by making them computationally infeasible. And it gives pretty good value for the money: as far as costs go for a payment-processing network, it's damned cheap compared to what Visa or Paypal charges.
I'm willing to bet that if Bitcoin ever becomes as widespread as Visa, then the cost of the instructure will become at least as big as the cost of the Visa infrastructure. In the meantime, it's already a lot of wasted energy.
Yes, early adopters come out well. That's true in any venture. But at the end of the day, that doesn't mean it won't be useful as a payment processing network. The amount that early adopters will get out of this utterly pales in comparison to what the big financial corporations are raping you for.
It's extremely easy to design a system with all the advantages of Bitcoin, but without this absurd bonus for early adopters. In fact, if a system similar to Bitcoin ever becomes widespread, I think it will be a fork without this ponzi-like structure.
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Oh, don't get me wrong - the Bitcoin computing infrastructure would be significantly greater than the amount Visa needs. The estimates I've seen are that BTC would need a full rack worth of 2U servers to compete with Visa... Which I think isn't really that big a deal for pushing that much money around. The rape isn't paying for Visa's computers. Visa rapes you for *profit*.
How would you structure the distribution of a fiat currency? Giving it out to the people running the network (miners are providing
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Oh, don't get me wrong - the Bitcoin computing infrastructure would be significantly greater than the amount Visa needs. The estimates I've seen are that BTC would need a full rack worth of 2U servers to compete with Visa... Which I think isn't really that big a deal for pushing that much money around. The rape isn't paying for Visa's computers. Visa rapes you for *profit*.
If Bitcoin becomes widely used and it is run by roughly a rack worth of servers, then I will buy two racks of servers and corrupt the system to divert a shitload of money to me. Bitcoin is only possible if it uses more power than any single entity can realistically get, which is in fact quite a lot...
How would you structure the distribution of a fiat currency? Giving it out to the people running the network (miners are providing the processing to secure the transaction log) is a pretty decent way, I think. How would you do it differently? Who deserves the generated currency more?
I don't have a problem with the fact that people running the system get some money. I have a problem with the fact that people who created the system get a fucking lot of money. More than ten percent of the tot
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You're correct - the bitcoin infrastructure will have to scale up considerably beyond that couple racks. My example was poor - I was describing transaction processing, whereas the whole infrastructure has to be considerably larger to provide security.
Still, I think that it's hard to foresee it ever being profitable to try to subvert the system. The only thing the exploit would allow is to revert very recent (within the last block or two) transactions. Everyone requires several rounds of confirmations for
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OK, rape is hyperbole. :)
I'm referring to the Visa transaction fees. You as a customer don't see them, but they're very real for the merchant.
Absolutely, you're right that the centralized model has advantages - but the no-chargebacks, works-like-cash-even-when-stolen model has a very real place as well. Right now I have to do that with wire transfers which are cumbersome, slow, and quite expensive. I've had $3000 tied up for the last two weeks due to a bank error on an international wire, and even after
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If you think THIS is a scam, read up more on fractional-reserve banking. The debt-driven US dollar is the biggest ponzi scheme ever.
I fail to see how this is even remotely relevant, as the issue is that BitCoin is a pyramid scheme. The idea that others may or may not be has no bearing on that.
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My point is that people are very dismissive of BitCoin often because it's an unbacked currency, and because it's generated out of thin air... But USD is actually generated in much larger percentages out of thin air, and in a much less controlled manner than BTC. The insanity of the debt-generated dollar is an interesting subject in itself, but the relevant point is that people's objections to the BTC, while valid, are even more applicable to the USD, the most universally-recognized and trusted currency in
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Actually they do in fact own around 80% of USD in existence in the form of debt. Fractional reserve banking is pretty amazing when you dig into it.
Anyway, as for the large number of coins that were mined and never circulated, I honestly don't think it's people trying to take advantage of it like a pyramid scheme. If that was the case they'd have cashed out en masse during last month's valuation bubble. The exchange trade volumes never really got that high - which indicates this isn't a pump and dump, but
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Anyway, as for the large number of coins that were mined and never circulated, I honestly don't think it's people trying to take advantage of it like a pyramid scheme. If that was the case they'd have cashed out en masse during last month's valuation bubble.
The last bubble was too small to cash out en masse, that would have driven the price down to essentially zero. In fact a single compromised account has been shown to be enough to drive the price to essentially zero...
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It wasn't just a single compromised account. The number of bitcoins "sold" in the hack were more than any single account on mtgox contains. Also, the value only went down to 0.001 briefly, and was back up to $14+ within minutes. Not bad resilience for a worst-case sell-off.
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You don't have to back up your wallet that often. The wallet doesn't contain your actual bitcoins; it's just a public/private key pair. The coins are publicly sent to your public key, and the transaction is recorded by all bitcoin nodes. The private key is how you prove you own them, which lets you spend them. You just need to back up the keys once, and then you're safe for all future transactions with that key pair.
People often generate new keypairs for each person they do business with, or sometimes f
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It's good to know your magic 8 ball is working perfectly. :)
Perhaps it will fail, but I see it gaining acceptance and recognition. It's useful now for things that Paypal, Visa, etc have found politically unpopular, like donating to Wikileaks. It makes small personal transfers easy. It has value. I think it's much too early to just dismiss it offhand as a failed experiment.
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Nope. My wallet is under 2 BTC right now. I have no vested interest in pumping it.
Actually, I think it's overvalued right now due to naive speculative investors. Fortunately, the market's correcting well from last month's bubble: a nice slow slide downward rather than a brutal crash. I expect it to keep going a ways down, and indeed, I *hope* it does, until the value is more reasonably demand-based, instead of driven by speculation. I think that's what's healthy for its long-term stability.
All that sai
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If it makes you feel any better, there are only a small handful of HFT servers in the world. But they are horrendously wasteful. They even consider CPUs consumables on those things, they run them overclocked to high heaven and just pop in new ones when they burn out.
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They don't even shut these things down to swap the chips, they just pull the blade and change the chip manually. I wouldn't be surprised if they come up with a magazine system at some point, if the competition is losing 2% of their processing power for 3 minutes and you can cut that loss of power on your side down to 10 seconds, that could give you a meaningful advantage.
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CPUs that are overvolted and overclocked to the point of actually failing tend to make mistakes and BSOD pretty often. Are you sure they overclock them THAT heavily? They could merely overclock to around 4-4.5 ghz with Intel's stuff (assuming that is the architecture they used) safely.
Re:Scaaam.... (Score:5, Funny)
I generate my bitcoins on a rack of servers powered by Solar panels and enslaved squirrels on treadmills you insensitive clod!
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I agree, but note that this is true of all currencies, fiat, gold (when it was one), seashells, private scrip, etc. So bitcoin is no different.
That is, the larger the economy of that currency, the greater the incentive to create (or steal) units of that currency directly, rather than produce something of value and trade for the currency. Thus, as the economy gets larger, more and more resources (both in human labor and energy) are spent getting money this way. All currencies will thus tend to have this k
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I'm convinced they did it for the lulz.
They probably invested in AMD and made their money watching all the knuckleheads buying multiple Radeon 5870s.
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"A common criticism is that the initial bitcoin distribution is heavily advantageous towards early-adopters. As stated, bitcoins are distributed ("generated") as an award for the solution to a difficult proof-of-work problem. The drawback is that the amount of work that has to be done for one bitcoin is currently over 500,000 times more than the amount of work at which the first bitcoins were going. As more people join, and also because of a reward function that halves the number
Re:Scaaam.... (Score:5, Insightful)
This is exactly how all pyramid schemes work.
Bitcoin might as well be called amway-coin.
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Except pyramid schemes don't come with full explanations and total transparency (hell, it's OSS) about the process.
To be a scheme, there has to be deceit. There's no such thing here. It's pure gambling, not more of a scam than the lottery or blackjack.
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Satoshi and the other devs had absolutely nothing to gain in Bitcoin. If you think they are using it to generate cash you are probably incorrect.
Hm...funny how so many of the early adopters cashed out their Bitcoins and got a huge pay day.
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Oops, I replied to the wrong post.
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;)
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The ad^Wpage views say otherwise.
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BTC are basically worth a measure of computer cycles. If you invest the same amount of computer cycles you get the same amount of BTC. More actually thanks to revised algorithms.
This is false. The difficulty of the problem is adjusted by consensus such that there is, on average, one solution found every ten minutes—no matter how much total computation goes into finding that solution. Each solution is (currently) worth 50 BTC, plus any fees paid for the transactions included in the block. How much of that ~300 BTC/hr. you are likely to get over the long term is a function of the ratio between your mining capacity and that of the overall network. Early on there was much less co