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BitCoin, the Most Dangerous Project Ever?

CmdrTaco posted more than 3 years ago | from the beware-the-coin-man dept.

The Almighty Buck 858

Jamie found a followup to the bitcoin story we've been following awhile. The article talks about the untraceable, un-hackable nature of BitCoin. They can't be locked down like PayPal, and the article predicts that governments will start banning them in the next 18 months.

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Tabloid trash (5, Insightful)

kentrel (526003) | more than 3 years ago | (#36139458)

What a badly written sensationalist story. It's like something from the Daily Mail

Re:Tabloid trash (5, Funny)

torgis (840592) | more than 3 years ago | (#36139484)

Welcome to /. where the motto is "Badly written sensationalist stories, like something from the Daily Mail."

Re:Tabloid trash (0)

Anonymous Coward | more than 3 years ago | (#36139510)

Hay guise look, Jamie got yet another reach-around from Taco by posting more of his crap he "found".

Re:Tabloid trash (5, Funny)

Coisiche (2000870) | more than 3 years ago | (#36139558)

What a badly written sensationalist story. It's like something from the Daily Mail

Oh, in that case without even reading it I know that they'll be some evil dreamed up by the rest of Europe that will be widely used by terrorists and will enable lots of immigrants to sneak into the UK and live a life of luxury funded by the toils of the UK taxpayer.

Am I right?

Re:Tabloid trash (4, Funny)

delinear (991444) | more than 3 years ago | (#36139762)

Almost. You forgot to mention what affect it will have on house prices.

Re:Tabloid trash (2, Troll)

cpu6502 (1960974) | more than 3 years ago | (#36139560)

Oh I don't know. The guy who was printed Liberty Coins (99% pure silver) has been told he's no longer allowed to do it. Now that the precedent is set, the US government can shutdown Bitcoin or any other form of non-Reserve currency.

Re:Tabloid trash (4, Funny)

_0xd0ad (1974778) | more than 3 years ago | (#36139568)

The guy who was printed Liberty Coins (99% pure silver)

No wonder ink cartridges cost so much.

Re:Tabloid trash (1)

smelch (1988698) | more than 3 years ago | (#36139612)

I'm more surprised that not only did we make a guy out of printed Liberty Coins, but then we forbade him from doing it. If he's 99% pure silver as the OP suggests, maybe its a health thing? Is silver bad when it gets inside of you?

Re:Tabloid trash (0)

Anonymous Coward | more than 3 years ago | (#36139640)

If he had named them "Rumpus Novelty Silver Coins" and sold them at reasonable market value, I doubt he would have had as much trouble as he did naming them "Liberty Dollars" and trying to sell them for far more than the silver was worth (compared to real silver markets).

Re:Tabloid trash (3, Insightful)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139662)

I think the issue was more with the fact that the person was trying to pass these coins off as legal tender.

Re:Tabloid trash (1)

Anonymous Coward | more than 3 years ago | (#36139750)

He did not try to do that. His coins were more expensive than legal tender, that would have been the stupidest counterfeiting ever. :D

Re:Tabloid trash (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139794)

He did not try to do that.

Did you actually see the coins? They were very clearly minted in a way to deceive people into thinking they were legal tender. The dollars on the other hand looked like monopoly money.

Re:Tabloid trash (1)

gilleain (1310105) | more than 3 years ago | (#36139692)

I'm more surprised that not only did we make a guy out of printed Liberty Coins, but then we forbade him from doing it. If he's 99% pure silver as the OP suggests, maybe its a health thing?

Haha

Is silver bad when it gets inside of you?

Oh no - don't remind me of the whole 'colloidal silver' alternative medicine thing...

Re:Tabloid trash (1)

lessthan (977374) | more than 3 years ago | (#36139710)

Depends on what you mean by bad. Colloidal silver is considered a "health drink" by some, however, imbibing too much or taking it too frequently causes your skin to turn a very noticeable grey. It is called argyria. [wikipedia.org]

Re:Tabloid trash (2)

_0xd0ad (1974778) | more than 3 years ago | (#36139820)

Colloidal silver is considered a "health drink" by some, however, imbibing too much or taking it too frequently causes your skin to turn a very noticeable grey.

Yes, and carrot juice is also considered a "health drink" by some, however, imbibing too much or taking it too frequently causes your skin to turn a very noticeable yellow. It is called carotenemia [medscape.com] .

Yet carrots are still generally considered to be healthful.

Note that both conditions are purely cosmetic and neither is actually harmful to you, other than to your social life. And the solution to either of them is simply to avoid consuming excessive amounts of that substance before it starts making your skin change color.

Re:Tabloid trash (1, Informative)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139592)

You do realize that that "precedent" was set in the US Constitution, right? Congress has the sole authority to coin money. Oh right, this is cpu6502 who is nothing but an idiot troll. Post some more prisonplanet and infowars stories for us. Those are highly amusing.

Re:Tabloid trash (1, Troll)

cpu6502 (1960974) | more than 3 years ago | (#36139668)

>>>Oh right, this is cpu6502 who is nothing but an idiot troll.

And you have demonstrated a lack of manners. I don't mind if someone disagrees with me. In fact I encourage it (makes life more interesting). But I don't accept being insulted just because you don't like my view of the world. Learn some tolerance please.

BACK ON TOPIC: If the Congress is the only one allowed to coin money, how come the state legislatures and banks of the 1800s continued printing their own money? And why can't States and Bitcoin or other banks do the same today?

Re:Tabloid trash (-1)

Anonymous Coward | more than 3 years ago | (#36139702)

Fuck you nigger.

Re:Tabloid trash (1, Interesting)

Anonymous Coward | more than 3 years ago | (#36139758)

Because the Confederate states were full of slave owning traitors. As much as I'd like to watch the southern half move even closer to a 3rd world nation they aren't allowed to secede or print confederate money.

You can take your Confederate money and shove it up your libtard ass.

Re:Tabloid trash (2, Informative)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139766)

BACK ON TOPIC: If the Congress is the only one allowed to coin money,

What if? It's plainly stated in Article 1 Section 8 under the Powers of Congress:

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

That's about as clear as can be.

how come the state legislatures and banks of the 1800s continued printing their own money?

Because Congress allowed them to do so since *drum roll* they have the power to relegate that authority. The Federal Government decided to print the money itself when the banks were no longer living up to the promise of exchanging bank notes of silver and gold.

And why can't States and Bitcoin or other banks do the same today?

Because Congress says they can't? Because Congress has sole authority over minting and regulating money? Is your skull really this thick?

Re:Tabloid trash (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139842)

Just as clarification further. During the early parts of the 1800s the US Government the government minted gold and silver coins called specie which could be traded for bank notes and bank notes were allowed to be printed on the promise that you could exchange them bank for these gold and silver coins. So to say that the US Government was not minting money in the early 1800s is bullshit. They just weren't printing notes.

Re:Tabloid trash (1)

Anonymous Coward | more than 3 years ago | (#36139860)

That's about as clear as can be.

It is clear from the quote that Congress can coin money, but there is nothing there to prevent anyone else from doing so, which is what this discussion is about.

Re:Tabloid trash (-1, Troll)

cpu6502 (1960974) | more than 3 years ago | (#36139866)

>>>Is your skull really this thick?
by Lunix Nutcase

With fantastic salespersons/representatives/users like this, I just don't know why the general public rejects the Linux desktop. I mean, if someone named Linux Nutcase came to me, and said, "If you don't use linux, your skull must be thick and you're an idiot too!" I'd start using Ubuntu* straight away.

Or not. Your attitude reminds me of this youtube video: http://www.youtube.com/watch?v=t-L-0s-7-Z0 [youtube.com] (humor)

* I do use Ubuntu on my laptop
* (since WinXP refuses to work)

Re:Tabloid trash (0, Troll)

cpu6502 (1960974) | more than 3 years ago | (#36139722)

cpu6502 who is nothing but an idiot troll.

(Score:5, Informative)

Still think the /. moderation system is not broken? In no way shape or form should a post that INSULTS other posters be marked "informative". It should be modded "-1 flame"

Re:Tabloid trash (0)

Anonymous Coward | more than 3 years ago | (#36139774)

Not really. It was informative, and accurate too. Go back to shitposting.

Re:Tabloid trash (-1, Troll)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139778)

Don't worry, I called the Waahmbulance [darconet.com] for you.

Re:Tabloid trash (5, Informative)

TheRaven64 (641858) | more than 3 years ago | (#36139780)

Telling everyone that you're a troll is informative, since some people may not be aware of your posting history. Slashdot has a mechanism for discouraging persistent trolls, by giving them bad karma. You try to work around this by periodically creating new accounts (I think commodore64love was your first one, but I could be wrong), so a post informing everyone who hasn't bothered to track you between abandoned accounts that you are a troll is informative. Oh, and well done finally learning how quote tags work, by the way.

Re:Tabloid trash (0)

Anonymous Coward | more than 3 years ago | (#36139790)

That's exactly what a troll would say.

A good first step would be to stop posting with multiple accounts (it ain't censorship when your accounts go to shit, it is the system making the comments on articles worth reading).

Re:Tabloid trash (0)

Anonymous Coward | more than 3 years ago | (#36139814)

Still think the /. moderation system is not broken? In no way shape or form should a post that INSULTS other posters be marked "informative". It should be modded "-1 flame"

Except he also raised some very salient points in his post that directly refute your claims to the contrary. His commentary on you is an aside in the whole matter. But that seems to be the only thing you've taken away from the post, which in many ways reinforces the necessity of his commentary.

Re:Tabloid trash (4, Funny)

Slashdot Parent (995749) | more than 3 years ago | (#36139754)

You do realize that that "precedent" was set in the US Constitution, right? Congress has the sole authority to coin money. Oh right, this is cpu6502 who is nothing but an idiot troll. Post some more prisonplanet and infowars stories for us. Those are highly amusing.

I think that the difference between this and other digital currencies is that bitcoin is totally decentralized. The US Government will be able to shut down bitcoin approximately as easily as they can shut down file sharing. As in, not very easily.

Still, I don't think bitcoin will become much of a thorn in the rump of any government-issued currencies. It has a pretty steep learning curve, and it doesn't really provide any benefit over government-issued currencies for 99.99% of the population. I think the only types of people who will bother learning how to use bitcoin would be, in decreasing order of value to society: privacy nuts, criminals, or economists.

Re:Tabloid trash (0)

phantomcircuit (938963) | more than 3 years ago | (#36139826)

Bitcoins are not money.

Re:Tabloid trash (3, Insightful)

smcdow (114828) | more than 3 years ago | (#36139830)

Remember the "precedent" where record companies had exclusive rights to distribute recorded music?

The Congress is about to discover the same lesson regarding technology that refuses to be regulated.

No shit (1)

Sycraft-fu (314770) | more than 3 years ago | (#36139846)

This isn't one of those areas that is a gray area either where congress is finding something else and expanding upon it to expand authority. The Constitution is real explicit in section 8 that congress shall have the power "To coin Money, regulate the Value thereof, and of foreign Coin."

One of the powers congress is clearly granted is control of the currency in the US. Now congress could likely permit other entities to coin money if they wanted to. The language is just that congress has authority over it, not that only the federal government must do it. So I suppose if congress liked bitcoins they could declare them legal tender. However it does mean that if congress doesn't like it, they are the ones with the final say.

Re:No shit (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139862)

Now congress could likely permit other entities to coin money if they wanted to.

Just as they allowed banks in the 1800s to print notes. Congress also has created rather explicit statutory law that seems to be in direct violation from the Liberty Dollar guy:

Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title [1] or imprisoned not more than five years, or both.

And since the Liberty dollars were inteded for use as current money and the coins were clearly attempting to pass off a resemblance to US coins. It is a pretty clear cut case.

Re:Tabloid trash (2)

ildon (413912) | more than 3 years ago | (#36139624)

That precedent was set 150 years ago when the U.S. stopped letting states and banks print their own currency.

Re:Tabloid trash (0)

cpu6502 (1960974) | more than 3 years ago | (#36139776)

Followup to my original post:

The States aren't allowed to coin money (per the constitution). They can issue gold and silver, though, and some are already doing it. The same is true with banks. For example Bank of America could issue gold/silver coins. The private company known as Franklin Mint already does, and so too could Bitcoin.

Re:Tabloid trash (4, Informative)

MightyYar (622222) | more than 3 years ago | (#36139796)

The guy who was printed Liberty Coins (99% pure silver) has been told he's no longer allowed to do it.

Yeah, because he tried to make them look like official US currency. They say LIBERTY across the top like official US coins, they say "Trust in God" rather that "In God We Trust" - but it's rather close. They have a bust of Lady Liberty like official US coins, and they say USA across the bottom.

Disney has been printing money for decades and the government does not stop them because they are clearly not US currency. Using a bunch of US national symbols on your coin is probably going to invite Treasury attention.

Re:Tabloid trash (1)

makomk (752139) | more than 3 years ago | (#36139804)

I'm not surprised Liberty Dollars got shut down. He was effectively minting his own fiat coinage - the value of the silver in the coins was rather less than both the price charged and the face value of the coins. That's kinda illegal in most countries. The Government is barely trustworthy enough to issue currency; letting some random guy who could cut and run do it is just asking for trouble.

Not over the top at all! (0)

Anonymous Coward | more than 3 years ago | (#36139482)

Yeah this story is totally credible with stuff like:

Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.

6. Bitcoins will change the world unless governments ban them with harsh penalties.

Why? Because some random guy on a blog says so? And how is the world economy going to function with a currency that maxes out at 21 million? Yes, a hugely small minority of people are using this on the Internet as currency but it is basically insignificant.

Re:Not over the top at all! (3, Funny)

rudy_wayne (414635) | more than 3 years ago | (#36139502)

And how is the world economy going to function with a currency that maxes out at 21 million?

And that 21 million won't be reached for another 130 years. Bitcoin is some sort of retarded joke.

Re:Not over the top at all! (4, Informative)

MightyYar (622222) | more than 3 years ago | (#36139646)

And how is the world economy going to function with a currency that maxes out at 21 million?

Let's pretend for a moment that no other digital currencies will be created - bitcoin will be it.

I'm not sure whether bitcoin will work out or not, but who cares what the absolute upper limit is to the currency? The software currently supports 2 decimals and the bitcoin themselves support division into "bitdust" of 1/100000000 bitcoin. So there are 2.1 quadrillion individual units. That ought to do us. There are perhaps 55 trillion "dollars" out there in the world. That's 1/4 of the economy so you need roughly 220 trillion dollars for the world economy. We use two decimal places with dollars, so the smallest unit is actually a penny. That's 22 quadrillion pennies to make the world go round.

Re:Not over the top at all! (1)

gilleain (1310105) | more than 3 years ago | (#36139772)

The software currently supports 2 decimals and the bitcoin themselves support division into "bitdust" of 1/100000000 bitcoin. So there are 2.1 quadrillion individual units. That ought to do us.

Okay, so a unit is roughly how much in other currencies?

There are perhaps 55 trillion "dollars" out there in the world. That's 1/4 of the economy so you need roughly 220 trillion dollars for the world economy. We use two decimal places with dollars, so the smallest unit is actually a penny. That's 22 quadrillion pennies to make the world go round.

Even my limited mathematical skills can see that 22 quadrillion is roughly 10 times 2.1 quadrillion. So...

Re:Not over the top at all! (0)

Anonymous Coward | more than 3 years ago | (#36139636)

And how is the world economy going to function with a currency that maxes out at 21 million?

How do you pay for something which costs less than a dollar?

Re:Not over the top at all! (1)

simcop2387 (703011) | more than 3 years ago | (#36139654)

It maxes out at 21 million of them, but apparently it's dividable up to 8 digits. so there's 21*10^6 * 10^8 => 21 * 10^14 => 2.1 quadrillion units. at least that's what their FAQ says. consider the fact that bitcoins can be lost and it's easily less than that.

Written by a used car salesman? (3, Insightful)

DontBlameCanada (1325547) | more than 3 years ago | (#36139492)

TFA reads more like an advertisement for BitCoins than an news article.

Re:Written by a used car salesman? (0)

Anonymous Coward | more than 3 years ago | (#36139514)

That's because it is an advertsement. Calcanis is both plugging his own show as well as the project because he stands to benefit from both. And since Slashdot has been posting thinly-veiled spam for years it shouldn't really surprise anyone that it was posted here, everyone's getting their money's worth.

Re:Written by a used car salesman? (1)

creat3d (1489345) | more than 3 years ago | (#36139644)

I'm not getting anything :(

Say hello to the black market.. (0)

Anonymous Coward | more than 3 years ago | (#36139494)

Thanks to the nature of bitcoins, clearly the only method of 'banning' them is to prevent them being used on legitimate commercial transactions. Stop trade for money (though in-person cash makes that hard), stop legitimate businesses from accepting them as payment (some excuse about non-taxable yadda-yadda) and then hunt people who generate them by precariously tearing down the illusion of TOR anonymity (hello, echelon mass surveillance tech).

That of course if it somehow becomes a stable currency. Right now, thanks to GPU clients, it's insane to think you'll get a good ROI rather than finding a novel way to launder money by converting electricity into untrackable currency. Since I'm not a crypto guru, is there a serial hashing algorithm that could, if used for a similar currency, avoid the ridiculous advantage of parallel GPU crunching?

Article Has a Very Strange Conflict (3, Interesting)

eldavojohn (898314) | more than 3 years ago | (#36139500)

First it says:

Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.

Then it says:

Of course, since bitcoin transactions are untraceable, you would have zero recourse if you sent a dozen bitcoins to someone for a couple of tabs of LSD. Just like you might lose your $10 if you gave it to a kid in the school yard for a dime bag and he never came back.

Well, which is it?

I first read about BitCoins on Slashdot a while ago and what intuition I have seems to wager there's a lot of Catch-22s with this pseudo-fiat currency. I mean the value is derived from scarcity but is also tied to what ... computational complexity? They serve absolutely no purpose with no possible side usages (like gold). The only purpose they serve is being a resource in contention. So what happens when people just decide to stop contending for it?

I think that the title of this article being "BitCoin, the Most Dangerous Project Ever?" is a crude attempt at a self fulfilling prophecy as it's no danger unless people start to use it and actually value the BitCoins at their trading rate. I liked the section titled "BitCoins in Real Life" that says:

In the next year you’ll hear about people in casinos in Vegas buying and sell bitcoins for cash and casino chips.

Riiiiight. I somehow doubt that.

I think this amounts to some very smart people engaging in a cute little experiment that will experience initial success as those with GPU farms get some of this novel currency. But it can never grow very large because you need a pretty expensive infrastructure even to handle BitCoins and the only interests it serves will be those industries that want easy untraceable ways to exchange value for illegal products or to avoid taxation. And once that's exhausted, I suspect it will flounder.

Does anyone honestly think the promise of protection from inflation will cause people to ask for their paycheck in BitCoins?

Re:Article Has a Very Strange Conflict (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#36139538)

Does anyone honestly think the promise of protection from inflation will cause people to ask for their paycheck in BitCoins?

If you do you better not hope many other people do unless you want to take a significant pay decrease due to the dearth of bitcoins.

Re:Article Has a Very Strange Conflict (0)

Anonymous Coward | more than 3 years ago | (#36139590)

Maybe some answers:

You can verify chain of ownership but you don't know the true identity of the owner.

If people stop contending for any currency then its value goes to zero.

Casinos would be a good way to convert bitcoins to real cash without getting traced.

I'm not sure why you would need expensive infrastructure to handle bitcoins. Its just a software program.

Re:Article Has a Very Strange Conflict (2)

delineal (1970468) | more than 3 years ago | (#36139596)

Agreed. As you said, it only has value while people choose to contend for it. It reminds me of Magic: The Gathering... The cards only have value while people choose to care... as soon as people stop caring, they become relegated to the realm of collector's items... valued by a few but not the masses.

Re:Article Has a Very Strange Conflict (0)

Anonymous Coward | more than 3 years ago | (#36139698)

I think this amounts to some very smart people engaging in a cute little experiment that will experience initial success as those with GPU farms get some of this novel currency.

That's pretty much what I thought, except with the precursor that it just reeks of someone who saw the whole "distributed computing" thing, got really, REALLY obsessed over it, spent lots of money on a huge computation farm, then discovered the hard way nobody wanted to pay him for using it. Then, out of bitterness and spite, came up with some cockamamie system solely so that his personal resource generated him lots of "money", and is trying to recruit others into this scheme so that he feels important.

Really, this whole thing just smells of "wannabe cyberpunk setting". It seems really, really sad the more I think about it.

Re:Article Has a Very Strange Conflict (1)

virgil_disgr4ce (909068) | more than 3 years ago | (#36139728)

the only interests it serves will be those industries that want easy untraceable ways to exchange value for illegal products or to avoid taxation. And once that's exhausted, I suspect it will flounder.

Wait, why would an untraceable, untaxable black market ever become exhausted?

Re:Article Has a Very Strange Conflict (4, Interesting)

IamTheRealMike (537420) | more than 3 years ago | (#36139738)

I agree the article is badly written. Transactions take place between public keys. As a public key is just a big random number, they are essentially "anonymous" unless the key is linked to your identity somehow - for example, because somebody you traded with told the police "I sent X coins to Eldavo John and he used address Y".

That's why it's better described as pseudo-nonymous rather than fully anonymous. It's possible to break the anonymity if people co-operate. I'd say it provides about as much privacy as the regular internet does. An IP address is basically private to regular citizens. If you represent law enforcement and turn up at a bunch of companies with the right paperwork you can make everyone work together and the privacy of the IP address falls.

It can never grow very large because you need a pretty expensive infrastructure even to handle BitCoins and the only interests it serves will be those industries that want easy untraceable ways to exchange value for illegal products or to avoid taxation.

Well, to handle Bitcoins today all you need to do is install and run the software from bitcoin.org. It runs just fine on regular servers, desktops and even laptops - hardly expensive infrastructure. If the system takes off and traffic levels reach PayPal levels, running it on a laptop won't be feasible anymore, you'll need some kind of high end server. If the system really takes off and starts matching VISA, a node would have to be distributed and might take a rack of machines. It never really gets infeasible because there is a "lightweight mode" in which the resource requirements are much lower and the security properties are slightly weakened. In this mode it's quite possible to run the system on a smartphone. Your device is independent, but if somebody is able to overtake the networks hashing power it can be made to believe anything. Right now that's 1-2 terahashes/sec, not something that's going to be beaten by anything except rich, sophisticated organizations (big tech companies or governments).

But I think your question/pondering is more about whether Bitcoin has value beyond mischief. I think it clearly does, otherwise I wouldn't be working on it ;) The existing electronic payments system isn't that great, really. To pay for something instantly over the internet today you have to use credit cards. Wiring money is an alternative but due to outdated banking systems it's extremely slow, money moved this way often moves slower than a physical truck would even though the transfer is actually electronic. It's also quite expensive.

Credit cards have a bunch of problems for both buyers and sellers. For sellers the biggest problems are chargebacks and the costs of taking part in the system. It's really hard to handle chargebacks. Big companies use sophisticated risk analyses to try and spot unusual behavior, smaller companies just bump the price of everything by 10% to handle the fact that some payments just won't happen. The costs of taking part are also a problem. You can't just install some software on your web server and go. Credit card details are basically big passwords, but in an inconvenient form that you can't change and that every merchant you buy things from must be given. Unsurprisingly, this is totally insecure even with the PCI auditing process that is intended to ensure merchants keep CC data safe. See the recent Sony breach for an example.

Credit cards aren't really great for buyers either. Whilst chargebacks are useful, you can't opt-out of the ability in order to get lower rates from the merchant, or set up some other kind of escrow scheme. For another, the system is very inflexible. Whilst you can theoretically take steps to secure your CC credentials better on your end, the fact that you share them with anyone you buy things from makes such effort mostly worthless. Finally they are kind of inconvenient. Despite being one big password you usually have to type in several long, hard to remember codes and pick things from dropdown boxes, etc.

Oh, I forgot another big one - the amount of trust required. Every time you make an electronic payment today, you don't only have to trust you bank, your credit card company, the merchant (eg, Sony) but also the US Government finds out courtesy of the TFTP. That's a lot of people to trust, even for people who aren't that privacy sensitive!

Bitcoin doesn't solve all of these problems, but it lays a foundation where they can be solved. In particular you become responsible for your own security, so you have a set of flexible tradeoffs. Maybe on your (potentially) insecure laptop you keep a small amount of money which is used for one-click ordering of things like pizzas. You can also keep some on your phone, on the grounds that phones get malware on them less often than most computers. And finally you could store large amounts of value in smartcards, or maybe BitBills [bitbills.com] . Businesses could go even further and have their wallet backed up across several continents and transactions done inside tamperproof hardware.

Re:Article Has a Very Strange Conflict (1)

nhaehnle (1844580) | more than 3 years ago | (#36139792)

More importantly, the first time there is ever a serious BitCoin crash, the game will probably be over forever. Unlike gold or government run fiat money, BitCoins really are valuable only by common consent, and if that consent ever wavers, that's it.

Gold has real value because it does have actual uses (although the price of gold is seriously inflated by hoarding, compared to what it should be based on natural scarcity alone), and government run fiat money has value because the government requires you to pay your taxes in it. BitCoin has no inherent value at all.

Just like Disney Dollars or Canadian Tire money (1, Funny)

Anonymous Coward | more than 3 years ago | (#36139508)

They absolutely DESTROYED their respective economies.

ABSOLUTE DESTRUCTION!!!!

aieeeeeee

Untraceable? (1)

MightyYar (622222) | more than 3 years ago | (#36139512)

Every client has a complete list of all transactions... how can they be called untraceable?

Re:Untraceable? (1)

harks (534599) | more than 3 years ago | (#36139586)

They are tracable to a hash of a signature. I don't think these hashes are easily traceable to a person.

Re:Untraceable? (1)

mysidia (191772) | more than 3 years ago | (#36139660)

They are tracable to a hash of a signature. I don't think these hashes are easily traceable to a person.

They will be, once the company receives an order from a court to trace them.

Re:Untraceable? (1)

zeroshade (1801584) | more than 3 years ago | (#36139704)

Except there's nothing to make the link with. You have the private key to the signature stored when you generated it. The only way it could be traceable is if you made your public key, well, extremely public. For a private transaction you can create a public key, use it once and never use it for anything else again. Thus as long as you keep it stored but never release it, there is absolutely no way for it to be traced to you. This is very easy to do with the way bitcoin's software works.

Re:Untraceable? (0)

Anonymous Coward | more than 3 years ago | (#36139680)

On top of that, to make it harder to be untraceable, people use a new address for every transaction.

if a webshop uses a single address for everything, it is really easy to see how much they received. But if for everything people buy they make a new address, it will be a lot harder to know that those addresses belong to that webshop.

Re:Untraceable? (1)

MightyYar (622222) | more than 3 years ago | (#36139714)

The hash is analogous to the serial number on a bill, only with bitcoin you know all of the other signatures that ever touched the currency. You don't even need a warrant to get this information - every client has it built in. It's like having wheresgeorge.com on every single bill in your wallet.

I don't know how difficult it will be for a government to track down the people who hold the keys, but as soon as they catch one guy with a key they will know every single transaction that key has ever made. If they catch two guys with keys and see common transactions, they know those guys are in cahoots. It seems like it makes money laundering harder, not easier.

Re:Untraceable? (5, Insightful)

Creepy (93888) | more than 3 years ago | (#36139708)

I believe they mean it is peer-to-peer, so there is no middleman, unlike something like PayPal where PayPal is the middleman, so it can't be traced unless you are there. In addition, if it doesn't save the "from" source after the transaction, there is no way to tell where the money came from.

Seems like it would make money laundering and tax evasion easy. Of course, there is an easy way to fix that as far as drugs go - make all drugs legal and tax them, then spend the money that went into enforcement on education (like Portugal did).

Cryptonomiconlike (1)

cyrus0101 (1750660) | more than 3 years ago | (#36139522)

Sounds like something Neil Stevenson might write.

Uncontrollable global bazaars for contraband... (5, Insightful)

digitaldc (879047) | more than 3 years ago | (#36139524)

"Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband."

I hate to tell you this, but this has already happened with regular-government issued legal tender.

Look at druglord Mexico, most 3rd-world countries, and the US with its billion-dollar Wall Street bailouts and ponzi schemes. Bitcoin would be a little late to the game.

Re:Uncontrollable global bazaars for contraband... (0)

Anonymous Coward | more than 3 years ago | (#36139836)

I hate to tell you this, but this has already happened with regular-government issued legal tender.

As said in wondermark [wondermark.com]

Re:Uncontrollable global bazaars for contraband... (1)

digitaldc (879047) | more than 3 years ago | (#36139850)

Exactly. Hedge fund managers aren't really producing anything, are they?

Even after reading TFA (2)

Random2 (1412773) | more than 3 years ago | (#36139526)

I still have no clue what this 'bitcons' are. Can anyone give an explanation not stepped in sensationalism?

Re:Even after reading TFA (1)

Anonymous Coward | more than 3 years ago | (#36139562)

Good simple explanation here: http://www.weusecoins.com/

Re:Even after reading TFA (0)

snemarch (1086057) | more than 3 years ago | (#36139572)

Basically: a cute idea that's never going to amount to anything ;)

For anything more than that, head over to bitcoin.org once it's no longer slashdotted, they have a PDF explaining the theory behind it.

Re:Even after reading TFA (5, Informative)

DanTheManMS (1039636) | more than 3 years ago | (#36139648)

I still have no clue what this 'bitcons' are. Can anyone give an explanation not stepped in sensationalism?

Simply put, it's a form of digital cash. Its main advantage is that it's a peer-to-peer thing, so there's no central authority (aka PayPal or Visa) to shut it down, or to block payments from anyone to anyone for political purposes. For instance, there's no way to prevent someone from donating to Wikileaks if they want to. Like cash, there are no chargebacks, which is either an advantage or disadvantage depending on your point of view. The cryptology makes it rather secure and prevents people from issuing a double-spend, or "writing a bad check" so to speak.

There are a few other aspects, such as low transaction fees and its status as a deflationary currency, and backing up the wallet file because suddenly you are your own bank and are in charge of your own security, but you don't need to know much about that unless you're interested in learning more.

At the moment, it's more of an experiment or proof-of-concept, though it's rapidly expanding beyond that. It's a currency in that it has value because people believe it to have value and are willing to exchange it for goods and services. The market is somewhat shallow at the moment, but it's growing all the time. An interesting project to watch, at the very least.

Dangerous is right! (4, Funny)

Cornwallis (1188489) | more than 3 years ago | (#36139532)

BitCoin should be banned because we want our currency to be as safe and stable as the U.S. dollar.

Re:Dangerous is right! (1)

taiwanjohn (103839) | more than 3 years ago | (#36139588)

Damn it! You made me spill my beer.

Re:Dangerous is right! (0)

Kagura (843695) | more than 3 years ago | (#36139686)

Damn it! You made me spill my beer.

The U.S. currency is used in over 75% of international foreign exchange transactions, and additionally it is one of the top few most stable currencies on the world market.

Re:Dangerous is right! (0)

Anonymous Coward | more than 3 years ago | (#36139856)

"Most stable" is comparative, it doesn't imply "actually stable"; for a similar /. flamebait, I hear Win7 is the most secure Windows version to date.

Re:Dangerous is right! (1)

betterunixthanunix (980855) | more than 3 years ago | (#36139834)

This brings up a point that I have yet to find a satisfactory answer to: what is bitcoin actually backed by? Even the US dollar is backed by something, in a very indirect way, but bitcoins appear to be backed by nothing at all.

I am a big fan of digital cash and I wish it had been deployed on a wider scale decades ago, but it needs to have some actual value connected to it.

Not untraceable. (3, Interesting)

Timmmm (636430) | more than 3 years ago | (#36139542)

It's not untraceable, at least not easily. As I understand it, every user has a copy of the the complete history of every bitcoin. Every coin is explicitly traceable - much more so than cash. The only way in which it is untraceable is that you don't know which bitcoin identities correspond to which real-life identities. Unless you happen to run an exchange, or carry out transactions with known people.

The way around it is by using the http://bitcoinlaundry.com/ [bitcoinlaundry.com] which jumbles up the coins, but then you have to trust that they aren't actually run by the FBI/whatever.

I think the banning prediction is right though (although maybe not 18 months). If this becomes popular there's no way it will stay legal. The government will be able to stop it fairly effectively by shutting down exchanges.

Re:Not untraceable. (3, Informative)

jonbryce (703250) | more than 3 years ago | (#36139730)

In the UK, you have to be registered with the Financial Services Authority, or the equivalent in another EU/EEA country to run such a service. Paypal for example is registered with the Luxembourg authorities. So as far as I can see, it is already illegal here.

Re:Not untraceable. (1)

Illy-chan (2071302) | more than 3 years ago | (#36139756)

Agreed on the timing thing. If for no other reason than that courts are notoriously slow when it comes to adjusting for new technologies.

Re:Not untraceable. (1)

gilleain (1310105) | more than 3 years ago | (#36139840)

It's not untraceable, at least not easily. As I understand it, every user has a copy of the the complete history of every bitcoin. Every coin is explicitly traceable - much more so than cash.

That's what struck me as I read about the scheme. Does this mean that coins get virtually 'heavier' as time goes on? The more transactions that coin as been a part of, the longer its history : right? So the database gets larger and larger? Of course, maybe if more and more people use it, then more clients get added to the p2p network, so perhaps the load gets shared.

Yours for 3 easy payments of $19.95 (4, Insightful)

jandrese (485) | more than 3 years ago | (#36139546)

I could only read that article with the late night salesguy's "These collector coins can only go up in value!" voice, but the content of the article was all about how it's clearly a scam and the author is obviously in on it.

Great! (1)

UmbraDei (1979082) | more than 3 years ago | (#36139554)

This just means more people will start buying bitcoins, and my reserve will keep increasing in value. And I'm sure the author of this article reasoned the exact same way...

Huh? (3, Insightful)

gstoddart (321705) | more than 3 years ago | (#36139566)

How does "cannot be tracked" come from something in which:

Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.

It's been a while since I did anything in crypto ... but if you can verify the signatures, and they're now attached to the coin ... can you just confirm the signatures without knowing who signed it? If it's been signed with my public key, don't you need my public key to verify it?

It seems like either it's traceable, because you can see everyone who has ever held a given set of coins ... or it's not trustworthy because all you have is a signature which you don't necessarily trust because you have no idea where it came from, but you trust the cyrpto.

This sounds like getting cash that has a record of everywhere it's ever been, but maybe I'm missing something here. Won't these 'coins' get large over time as they keep getting signed and passed on? (And the amount of verification needed would get quite long, no?)

I don't think I'm all that interested in a virtual currency whose major benefit is that I can buy escorts and drugs on-line without anybody being able to trace it ... it just seems like there's more motivation for fraud in a system like this. And, it seems like something which is going to start coming under a lot of scrutiny.

I'm just not getting what need this is intended to fill ... and I'm not sure I understand how it's simultaneously untraceable and secure.

Re:Huh? (2)

nhaehnle (1844580) | more than 3 years ago | (#36139854)

You do need the public key, but the public key is not tied to your identity. Apparently, it is common practice to create a new public/private key pair for every incoming transaction. In other words, everybody knows all the transactions, but the transactions are only tied to one-off public/private key pairs that are not tied to any identity. I suspect that if you are given some known key identities, you might be able to analyse the graph of transaction to draw conclusions from it, but I don't think this has ever been demonstrated.

As for the size of the coins, this is not by itself an issue. There is no "coin" object in BitCoin, only transactions, whose size is dominated by the cryptographic data involved, but this is essentially constant. However, every node in the BitCoin network needs the entire history of transactions. This could become problematic if the network were ever used for a significant number of transactions. (In principle, the history can be pruned, removing old transactions whose knowledge is no longer important. I'm not sure how well that would work.)

(Note that I am not a user of BitCoin, and I think it's a bad idea from an economics point of view. Still, it's a very interesting cryptosystem.)

Bitcoin over freenet (0)

Anonymous Coward | more than 3 years ago | (#36139580)

This might be interesting as well: - https://en.bitcoin.it/wiki/Freenet [bitcoin.it] Bitcoin over freenet [freenetproject.org] . Makes it even more harder to track down people and nodes. Yes unless all isps are instructed to not only filter bitcoin but freenet (and tor) traffic as well.

FUD Much? (1, Interesting)

lavagolemking (1352431) | more than 3 years ago | (#36139606)

TFA looks like a biased politically-motivated piece, likely written by someone who works for a bank. It talks all about how operating currency independently from the banks or government, who are there to protect you, is dangerous for you (only criminals would do something like this, right?) and risks toppling the government. Of course it will cause problems for banks; people using it might not have to deal with abuse, fees, or identity theft from a badly broken security model that is our financial system when they close their bank accounts for it. FUD aside, I suppose that in itself is reason for the governments to ban it, since the powers that be have something to lose. At least if they're in the pockets of CEOs like they seem to be as of late...

untraceable means untrustable (0)

circletimessquare (444983) | more than 3 years ago | (#36139626)

oh, you're saying you can trust bitcoin?

ok. meaning you can verify transactions?

meaning... drum roll please, it is traceable

Re:untraceable means untrustable (1)

Scottingham (2036128) | more than 3 years ago | (#36139712)

Traceable to an IP. Now, are you claiming an IP address = a person?

Re:untraceable means untrustable (1)

countertrolling (1585477) | more than 3 years ago | (#36139742)

And it's electronic.. meaning a stray cosmic ray could 'break the bank' so to speak.. OTOH it could put a gazillion Zimbabwean dollars onto your card.. don't know which is worse..

goverment electronic currency (0)

Anonymous Coward | more than 3 years ago | (#36139676)

It has always bothered me that the government does not control modern currency. Instead, Visa, Paypal and large banks do.

It would make sense if a government created it's own electronic currency system and mandated that everyone accept it (within some amount of time).

I'm fine with that (1)

atari2600a (1892574) | more than 3 years ago | (#36139678)

Creating a naturally deflating decentralized currency is just the first step in making the world a better place. Sure, it might end with Lenin's reanimated corpse ruling the world but at least it cuts out all this bullshit banking middleground that tricks most westerners into thinking they can afford a house & 5 SUVs...

The Gov doesn't need to make it Illegal (1)

Scottingham (2036128) | more than 3 years ago | (#36139690)

Governments don't need to make Bitcoin illegal. They just need to make it unusably unstable. Ramp up the price, then make it crash. Over and Over. Nobody would use a currency system that swings wildly in value from day to day.

That said, I've already donated to XKCD www.xkcd.com/bitcoin ~S

Screaming for attention? (1)

airfoobar (1853132) | more than 3 years ago | (#36139694)

In the majority of respects, Bitcoins are no different from cash, and that includes the anonymity and untraceability aspects -- anything that lets me get rid of Paypal and Visa shackles is undeniably a good thing! That said, maybe Bitcoins could be banned because with greater uptake (in the very distant future) they could undermine the US dollar as the reserve currency?

Free Trade (0)

Anonymous Coward | more than 3 years ago | (#36139716)

In other words: free trade, The Most Dangerous Project Ever.

Say what? (3, Interesting)

ath1901 (1570281) | more than 3 years ago | (#36139736)

I thought they wanted to be funny but there was no punch line. If the article wasn't supposed to be funny, it must have been machine generated (like SCIgen). Statements like this give it away:

* Bitcoin is unstoppable without end-user prosecution.

What does that actually mean? Are standard coins and notes "stoppable" and "with end-user prosecution"? Could someone come up with a car analogy so I understand?

Untraceable and unhackable? (1)

VincenzoRomano (881055) | more than 3 years ago | (#36139744)

Anything with such features will be banned by governments.
Trivial!

Inherent Value (0)

Anonymous Coward | more than 3 years ago | (#36139810)

The best way to back this currency would be to trade it for cpu time or bandwidth and start an anonymous decentralized data haven where you need bit coins to use it. Kill two birds with one stone. I2P anyone?

scam (-1)

Anonymous Coward | more than 3 years ago | (#36139816)

From what I have read, the whole bitcoin thing is a guant scam, and illegal in some countries.

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