Beta

×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Ask Amir Taaki About Bitcoin

timothy posted more than 3 years ago | from the does-george-selgin-approve? dept.

The Almighty Buck 768

"Bitcoin," says the project's website, "is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions." Wikipedia offers a readable explanation of the underlying technology. In (very) short, Bitcoin uses a distributed database and public key encryption to allow users to reassign ownership of units of Bitcoin currency (BTC), and does so in a way that can keep the user's identity private. Bitcoin isn't yet accepted the way credit cards are, but it's more than theoretical. You can buy (some) things with Bitcoin, and trade the currency itself. Now, you can ask question about Bitcoin of Amir Taaki, a developer of client interfaces and stock trading software for Bitcoin, and owner and operator of trading exchange Britcoin.co.uk. Amir requests that questions focus not "so much on the mining (too many people get focused on that when it's a minor aspect of Bitcoin) nor simple technical questions (people can go find that info themselves on Wikipedia/the forums/sourcecode)," but rather on the harder-to-answer questions. Reading some of the related stories listed below may give you ideas on what those are. Standard Slashdot Interview rules apply: ask as many questions as you want, but please keep them to one per comment. Amir will get back with his answers.

cancel ×

768 comments

Sorry! There are no comments related to the filter you selected.

Bitcoin (5, Interesting)

cgeys (2240696) | more than 3 years ago | (#36436204)

There's one interesting thing about Bitcoin that I think most geeks haven't either understood or havent thinked about. Both stock and forex markets are secured against all kinds of foul play. Doing a pump and dump scheme or various other schemes isn't easy. With Forex the sheer amount of transactions and money changing hands makes it impossible and the law protects against such schemes with stocks. If stock markets flunctuate much they also close down automatically. Bitcoin doesn't offer any protection against this. Anyone with the know-how and cash can come in to play with the market. This makes Bitcoin seriously vulnerable to losing huge amounts of money. Last friday we saw probably the first such scheme taking place [slashdot.org] . Someone slowly build up the value of Bitcoin and on an instant cashed out lots of money. That lowered the overall value of Bitcoin significantly, which made others join it and sell it. Whoever was playing Bitcoin market probably was thinking he had now got Bitcoin to the most high value possible and decided to cash out. Many people lost significant amount of money.

This all works wonderfully for the people who have the financial understanding of markets and such schemes. Geeks generally do not. All they see is this program that they can use to make money with their hardware. They forget that all the traditional pump and dump schemes and others still apply. Actually not only do they apply, they're safe to pull of with Bitcoin because it's legal, the market is really vulnerable to it and most people using it do not understand what is happening. Those who trade stocks or forex generally have even some understanding of how the market works. Bitcoin users generally do not, as they're just normal users.

Re:Bitcoin (3, Interesting)

petermgreen (876956) | more than 3 years ago | (#36436496)

mmm, anyone who puts money they can't afford to lose into bitcoin is an idiot. Bitcoins do not have intrinsic value, they do not have tax value and they do not have any gauranteed exchange rate to anything else. If everyone decides to cash out then the value of bitcoins could drop through the floor very quickly.

That doesn't mean bitcoin doesn't have it's uses. They provide a way to make transactions without government interference and they previously provided a way of making small transactions without the high fees of things like paypal and international bank transfers (unfortunaly the current high value of bitcoins means that under current transaction fee rules this is getting less true).

Re:Bitcoin (2)

cgeys (2240696) | more than 3 years ago | (#36436618)

Most people I talked about this after the drop just said they're not really interested about it and said they don't care because they haven't "bought" bitcoin with real money and that they could always just sell their GPU's later. In my opinion that just shows people don't understand what's going on. The money you lose is very real. If you mainly use US dollars, but had some cash in lets say chinese yuan and it would lose 30% of its value, that's a real loss. If your Bitcoins lose 30% of their value, that's a very real loss too. It's money you had, but do not have anymore, just because someone was gaming the system.

Re:Bitcoin (1)

Bromskloss (750445) | more than 3 years ago | (#36436820)

Bitcoins do not have intrinsic value

Isn't that true for most currencies? You know, being off the gold standard and all that. I'm not saying it's a good thing - I just note it.

they do not have any gauranteed exchange rate to anything else.

Again, that's common for currencies, right?

Is the gold rush over? (5, Interesting)

curunir (98273) | more than 3 years ago | (#36436226)

With BitCoin limited to a pre-determined amount and the difficulty of mining new BitCoins, it seems that this gives a huge advantage to people who got into BitCoin early and have already amassed a considerable amount of BitCoins. Is this true and, if so, do you think this disincentive will undermine BitCoin's ability to become more popular since the majority of the population will have to work so much harder to obtain the currency?

Re:Is the gold rush over? (5, Interesting)

alen (225700) | more than 3 years ago | (#36436314)

at this point it's not even worth mining for it. i looked at the exchange rates to real money and by the time you invest in a dual GPU system and pay the electric bills you don't make any profit

Re:Is the gold rush over? (4, Interesting)

curunir (98273) | more than 3 years ago | (#36436410)

That was the point...BitCoin is great for people who got in early and mined a lot. But for everyone else, adopting it means essentially giving those early adopters stuff for free.

Re:Is the gold rush over? (0)

MyFirstNameIsPaul (1552283) | more than 3 years ago | (#36436494)

I believe that's called being an entrepreneur. Which people actually made money on Yahoo! stock in the 90s?

Re:Is the gold rush over? (4, Insightful)

Abreu (173023) | more than 3 years ago | (#36436680)

It's actually a classic Ponzi.

Re:Is the gold rush over? (2)

MoonBuggy (611105) | more than 3 years ago | (#36436602)

Which is not really any different to the people who got the gold in California, the land in Manhattan, the best .com names, or the IPO stock in Google.

Re:Is the gold rush over? (1)

mcvos (645701) | more than 3 years ago | (#36436802)

They have some real value backing it. Bitcoin doesn't.

Re:Is the gold rush over? (1)

DrXym (126579) | more than 3 years ago | (#36436884)

That was the point...BitCoin is great for people who got in early and mined a lot. But for everyone else, adopting it means essentially giving those early adopters stuff for free.

It's also the point of most pyramid schemes. Get in early and get the hell out before it all collapses and let some other poor bastard be the one out of pocket.. I don't see any fundamental difference with Bitcoin. The funny part is the whole "get in early" aspect may be what seals its doom, once Bitcoin matures, it's bound to spur a pile of Bitcoin wannabes which promise easy mining potential and the whole cycle will repeat, burning the people still stuck on the old system.

Re:Is the gold rush over? (4, Insightful)

erroneus (253617) | more than 3 years ago | (#36436560)

See? You are thinking about this wrong. Think about using a botnet to distribute the processing load. Now you are using someone else's computing cycles and electric power. And you know what? I have said this before and so far, I haven't been wrong. I'm not that "original" of a thinker, it turns out. Without fail, every time I think of an idea, someone else has already thought of it and has likely already implemented it. So if I just thought about it, there is a reasonable amount of certainty that it is already out there being done.

And using someone else's resources is what spam and similar things have been about for the people most annoyed by the problem. But using someone else's resources are quite often the way things are done these days.

Re:Is the gold rush over? (1)

AmiMoJo (196126) | more than 3 years ago | (#36436582)

I think the point he was making is that people who got in early got loads of free money by mining, where as the rest of us have to buy it at the going exchange rate. It seems unfair that the opportunity to exchange computer cycles for currency at a very favourable rate is denied to us because we came to the party late.

Re:Is the gold rush over? (1)

dpilot (134227) | more than 3 years ago | (#36436800)

On the other hand, the early adopters are the ones who made bigcoin into something sufficiently viable that you're even thinking of getting involved. They have performed a service, and they've been compensated for it. Of course now they have to mine under the same conditions as you, so their extra incentive has ended.

Seems fair to me.

Re:Is the gold rush over? (4, Insightful)

Aceticon (140883) | more than 3 years ago | (#36436538)

BitCoin seems to have a lot of the properties of a pyramid scheme, mainly:

- First adopters have an inherent advantage since they could create large amounts of BitCoins.
- BitCoins have no inherent value. The only value they have is that which is attributed to them by those whose trade in them.
- The more people that can be convinced to trade in BitCoins, the higher the pool of real money available to exchange for BitCoins.
- Creation of BitCoins has now reached a level where the items being created for a given unit of time represent a small percentage of the total number of items in circulation: it is now essentially a trader's market.

Re:Is the gold rush over? (1, Troll)

DriedClexler (814907) | more than 3 years ago | (#36436758)

US Government bonds seem to have a lot of the properties of a pyramid scheme, mainly:

- First adopters have an inherent advantage since they could buy lots of Treasury bonds in the early days of the Republic when they still traded at a discount.
- US Government bonds have no inherent value. The only value they have is that which is attributed to them by those whose trade in them.
- The more people that can be convinced to trade in US Government bonds, the higher the pool of real money available to exchange for US Government bonds.
- Creation of US Government bonds has now reached a level where they undergo unsustainable exponential growth.

Frankly, I'm skeptical of these cranks that are out there promoting US Government bonds, and their acolytes in the media who feel like they have to bombard us daily with information about their market fluctuations.

Re:Is the gold rush over? (0)

Anonymous Coward | more than 3 years ago | (#36436550)

I believe this is called a pyramid scheme.

How much for an eight ball? (0, Funny)

Anonymous Coward | more than 3 years ago | (#36436228)

How many bitcoins is an eight ball of coke?

What about a quarter of kind bud?

What about LSD tabs?

Oh yeah, and X pills?

Re:How much for an eight ball? (1)

HangingChad (677530) | more than 3 years ago | (#36436486)

How much are they in USD? What keeps me from mailing cash to some vendor on Silk Road in a birthday card? It's no different, you're depending on someone to mail you something either way.

This is a non-issue but it keeps coming up over and over, like it has some meaning.

Re:How much for an eight ball? (1)

Stellian (673475) | more than 3 years ago | (#36436852)

To mail cash to an online drug dealer, you need to know his address. Follow the money trail they say. Well, cryptocurrency breaks the money trail and it's a significant development, your reluctance notwithstanding. If successful, schemes such as Bitcoin might challenge current methods of law enforcement up to the point where some laws become anachronistic and unenforceable.

Why Bother? ~nt~ (0)

OverlordQ (264228) | more than 3 years ago | (#36436250)

~nt~

You can some things... (1)

OakDragon (885217) | more than 3 years ago | (#36436874)

Ok, you can some things with Bitcoins... what about the things you Bitcoins can't?

Crypto-Anarchism (2)

conner_bw (120497) | more than 3 years ago | (#36436254)

I argue that bitcoin is interesting because it's a locked currency, with a known maximum, and a timeline for that maximum based on contemporary crypto math and radical ideas. There is clearly well thought out timeline for adoption and disruption. It's not just "Cool, new money!"

My question: Are you a crypto anarchist, or similar?

If not, then is this another Tulip craze [wikipedia.org] and all these news stories and bitcoin currency exchange services being hyped heavily the last month machinations for profiteering?

is there ever going to be a bitcoin bank? (1)

alen (225700) | more than 3 years ago | (#36436266)

the idea that if you lose or destroy or whatever your computer and lose all your money isn't going to make the general public accept this

Re:is there ever going to be a bitcoin bank? (1)

HangingChad (677530) | more than 3 years ago | (#36436434)

the idea that if you lose or destroy or whatever your computer and lose all your money isn't going to make the general public accept this

That's not how it works. If you lose your hash, then you lose your money. But that's no different than any other data loss because you didn't back up your data.

Re:is there ever going to be a bitcoin bank? (1)

alen (225700) | more than 3 years ago | (#36436536)

if my computer crashes and i lose my kids photos it doesn't mean i suddenly lose all my life savings

Re:is there ever going to be a bitcoin bank? (0)

Anonymous Coward | more than 3 years ago | (#36436626)

So backup your kids photos and your life savings.
Bitcoins are simply stored in a file, which can be copied and backed up like every other file.

Re:is there ever going to be a bitcoin bank? (2, Informative)

slim (1652) | more than 3 years ago | (#36436676)

Yeeees. But if you kept your life savings in a suitcase of cash, and it got burnt, you'd lose your life savings. A bitcoin wallet is like a suitcase of cash.

A Bitcoin wallet is also like your folder of photos of your your kids -- you can take a backup of it, and should do so.

Or keep your Bitcoins in a Bitcoin bank. There probably is one now -- I've not looked. If there isn't one, there's no technical reason for there not to be one.

Or, use Bitcoins to buy and sell, trading them for "real" money in order to keep it in the bank. This is what I do with my Paypal "dollars" from trading on eBay.

Re:is there ever going to be a bitcoin bank? (0)

Anonymous Coward | more than 3 years ago | (#36436720)

And if your house burns down, you lose all your cash and most other material assets.
It's that hard to back up a sub 1 MB file? All you need is to back up the keys, you can even pregenerate lots of keys so that you only have to back up it once securly and not worry about updating it for decades. You can put the wallet (keys) in inumerable places securely.
As a practical matter, it is actually easier to keep your bitcoins safe than any other physical asset you have. The real big danger currently is that most people's bitcoin wallets are unencrypted and would be vulnerable to malware (of course so is your bank account depending upon the malware and your computer usage).

Re:is there ever going to be a bitcoin bank? (0)

Anonymous Coward | more than 3 years ago | (#36436824)

The only reason we need banks in real life is because only the privileged (i.e. banks) have the authority to handle and deal with electronic money transfer. With BitCoin, you can just upload an encrypted copy of your bitcoin identity to a bunch of servers, or post it on Twitter, or whatever (just don't forget the passphrase). Any kind of remote secure storage is as good as a bank as far as BitCoins are concerned.

Re:is there ever going to be a bitcoin bank? (1)

simoncpu was here (1601629) | more than 3 years ago | (#36436780)

Perhaps you can store your BitCoins inside a safe deposit box of a real bank.

are mobile clients coming? (1)

alen (225700) | more than 3 years ago | (#36436280)

i can't see everyone having to drag a laptop to every transaction

Re:are mobile clients coming? (1)

slim (1652) | more than 3 years ago | (#36436706)

Here's one. It currently works with "testnet", the parallel Bitcoin network where the coins are theoretically worthless. https://market.android.com/details?id=de.schildbach.wallet [android.com]

You can the verb. (0)

Issarlk (1429361) | more than 3 years ago | (#36436292)

But no need for bitcoin to do this.

Re:You can the verb. (1)

Opyros (1153335) | more than 3 years ago | (#36436778)

Actually, I'm curious; how do you use Bitcoin in canning?

It seems Timothy (1)

gcnaddict (841664) | more than 3 years ago | (#36436300)

accidentally the verb.

You can (some) things with Bitcoin

Aside from this, my question is as follows: what's the contingency plan in the event that the currency is undermined, either by means of the PKI being broken or some other vulnerability being uncovered?

Re:It seems Timothy (1)

MyFirstNameIsPaul (1552283) | more than 3 years ago | (#36436414)

According to this person [blogspot.com] , nothing in BitCoin is encrypted.

you dont the brilliance (1)

decora (1710862) | more than 3 years ago | (#36436828)

of the new writing. by verbs, it allows your imagination to free, free as the wind. it a long time since we such a refreshing update to the english language. you with the flow.

personally i we should also adjectives articles.

Quantum Computing? (5, Interesting)

SanityInAnarchy (655584) | more than 3 years ago | (#36436306)

Are there plans to deal with quantum computing, or with any of the algorithms used being compromised?

I understand that the hashes wouldn't be terribly devastating for Bitcoin -- worst case, I would think, you roll the entire network back to a snapshot of the transaction history before the first quantum computer started screwing stuff up, and start using a new hashing algorithm. It'd be very bad, but not catastrophic.

But for actual accounts, it looks like we rely on ECDSA -- and it looks like even if Bitcoin offers a quantum-ready algorithm, my wallet is still likely compromised unless I move everything to it before the first viable quantum computer. Still, there doesn't seem to be much noise about this other than a few forum posts, largely dismissed by saying things like "DWave is vaporware."

Re:Quantum Computing? (1)

PhilHibbs (4537) | more than 3 years ago | (#36436408)

"Roll the entire network back"? No, I managed to take your bitcoin off you by using a quantum computer to predict your crypto, and I refuse to roll back my bitcoins to you. There is no central bank that tracks who owns which bitcoins.

oh look ! (1, Informative)

Anonymous Coward | more than 3 years ago | (#36436318)

more bitcoin slashvertising ! oh boy !

My question. (5, Insightful)

Beelzebud (1361137) | more than 3 years ago | (#36436322)

How much real money are you paying the Slashdot editors for the constant stream of stories about this worthless new "money"?

Re:My question. (5, Insightful)

datapharmer (1099455) | more than 3 years ago | (#36436356)

I wish I had mod point. Seriously, this bitcoin spam is getting really old.

it's more insidious than you think (2, Insightful)

Anonymous Coward | more than 3 years ago | (#36436412)

They are paying in bitcoins, so the slashdot editors HAVE to keep plugging the crap for their payment to be worth anything.

Re:My question. (0, Informative)

Anonymous Coward | more than 3 years ago | (#36436466)

Unfortunately all our money is essentially worthless. It is only the belief that gives it value. As such Bitcoin has as much value as any other currency. The current spike in bitcoin is cause by the fact that people have little faith in dollars etc. so want to put their money somewhere else that can't be devalued by someone printing more money.

Re:My question. (2)

Attila Dimedici (1036002) | more than 3 years ago | (#36436586)

Unfortunately all our money is essentially worthless. It is only the belief that gives it value. As such Bitcoin has as much value as any other currency. The current spike in bitcoin is cause by the fact that people have little faith in dollars etc. so want to put their money somewhere else that can't be devalued by someone printing more money.

This is not true. Bitcoins do NOT have as much value as many other currencies. I know of no government that accepts Bitcoins for the payment of taxes.

Re:My question. (0)

Anonymous Coward | more than 3 years ago | (#36436714)

thats because when you use bitcoin, you don't have to pay taxes, stupid.

Re:My question. (0)

Anonymous Coward | more than 3 years ago | (#36436766)

Pretty much nobody accepts Autism Kroners for anything.

Re:My question. (1)

Beelzebud (1361137) | more than 3 years ago | (#36436722)

The money I have in my wallet is backed by the U.S. government, and all other countries on the planet. Name one country that you can spend this "money" in.

Re:My question. (2)

SoVeryTired (967875) | more than 3 years ago | (#36436712)

They don't need to pay the editors a thing. The editors just need to have been early adopters. You can bet your bottom bitcoin that anyone raving about it has a stash of them saved up.

My question: (0)

Anonymous Coward | more than 3 years ago | (#36436346)

What do you think about the recent announcement by the Obama administration to deploy internet in a box? It seems to me that one problem with bitcoin is that although it isn't centralized, it does require the standard internet to function. The internet itelft is highly centralized is it not? It seems to me that bitcoin needs a decentralized bit torrent-like set of internets, possibly anonymous internets to insure it can function. It would probably also need a large military backing to keep it from being bullied out of the market by the existing centralilzed paradigm.

What? (1)

SanityInAnarchy (655584) | more than 3 years ago | (#36436508)

Seriously, what?

The Internet isn't terribly centralized as it is, other than the organization responsible for assigning IP addresses and domain names. BitTorrent and Bitcoin are both distributed protocols which run on top of that.

In fact, it looks as though Bitcoin is even less centralized than BitTorrent -- while both currently use some sort of central tracker to grab a list of peers, it seems as though Bitcoin could operate just as efficiently no matter how it gets its peers. More peers might be better for anonymity, but it also seems like Bitcoin could operate efficiently with a single peer, while BitTorrent wants to connect to many in order to saturate the connection.

If the "internet in a box" connects to the standard Internet, it's a central choke point. If it doesn't, it's a much smaller network on which it's much harder to hide. Connecting to a single network doesn't imply a single, centralized point of control.

"minor"? (0)

Anonymous Coward | more than 3 years ago | (#36436350)

The means by which money enters an economic system is a pretty big deal. The creation of Bitcoins involves neither an act of wealth creation (as with tangible barter goods) nor an obligation by any entity to accept them as taxes or fees (as with fiat currency). How, then, can you say the mining constitutes a "minor aspect"?

Dead polar bears (1)

Anonymous Coward | more than 3 years ago | (#36436366)

Do you have trouble sleeping with the knowledge that for every BitCoin generated, a polar bear dies?

Yet another advertisement (5, Insightful)

Geoffrey.landis (926948) | more than 3 years ago | (#36436376)

Good grief, yet another advertisement for bitcoin?

Enough, already!

Re:Yet another advertisement (1)

Anonymous Coward | more than 3 years ago | (#36436432)

how else will the creators (with lots of bitcoins mined when it still took almost no time) be able to exchange for real life money?

Re:Yet another advertisement (5, Insightful)

Nidi62 (1525137) | more than 3 years ago | (#36436482)

Someone must be getting paid for all of these bitcoin ads that are showing up as "stories"

Re:Yet another advertisement (5, Insightful)

Raenex (947668) | more than 3 years ago | (#36436846)

Someone must be getting paid for all of these bitcoin ads that are showing up as "stories"

Considering that 4/5 of the related Bitcoint stories are posted by timothy, and this one as well, I'd say he has a vested interest in peddling this crap.

Re:Yet another advertisement (1)

Kjella (173770) | more than 3 years ago | (#36436882)

Yep, this is starting to get as bad as the second life hyping. Seriously, you're not building credibility when it seems like the only thing you do is troll for more bitcoin buyers.

Terminology (2)

lga (172042) | more than 3 years ago | (#36436430)

If we eventually use Bitcoin in everyday life, say, in the supermarket, how will we deal with prices in fractions of a Bitcoin? What terminology might we use for something priced at 0.00000005 Bitcoins?

Re:Terminology (0)

Anonymous Coward | more than 3 years ago | (#36436688)

50 nano, duh.

Assuming Apple doesn't sue, anyway.

Re:Terminology (1)

vlm (69642) | more than 3 years ago | (#36436730)

If we eventually use Bitcoin in everyday life, say, in the supermarket, how will we deal with prices in fractions of a Bitcoin? What terminology might we use for something priced at 0.00000005 Bitcoins?

A twentieth of a microBTC or uBTC (looks better in UTF-8)? More likely you'd call that "fifty nanoBTC"

Crypto background (2)

DriedClexler (814907) | more than 3 years ago | (#36436448)

Not a question, but I thought I'd point to this explanation [blogspot.com] as a good introduction, not so much to Bitcoin, but to the cryptographic background you need to even make sense of how something like Bitcoin can work in the first place. (Wikipedia is a way too verbose and doesn't answer a lot of what's on people's minds.)

Remember, people are uneasy about using something without a decent level of understanding about it, and it's hard enough for the average person to understand public key cryptography -- so you first have to accomplish that herculean task as a substep in explaining the specifics of bitcoin.

Aspirations (3, Interesting)

slim (1652) | more than 3 years ago | (#36436464)

My question is, what are your aspirations for the currency. Do you hope for it to be near-ubiquitous -- used by corner shops and mainstream merchants like Amazon? Or are you happy to see a parallel economy grow, as a niche thing? Or something else?

What's the plan? (0)

Anonymous Coward | more than 3 years ago | (#36436468)

A currency is only as valuable as people perceive it to be and it takes much time and effort to establish or change the perception. The long term viability of the currency depends on stability, which is a function of some body exercising at least some measure of control to protect it from the destructive forces of pure unchecked free enterprise. Witness the adoption of the Brazilian real is an example of these principles. We've seen in this past month or two that the BTC is very volatile because of its susceptibility to basic market pressures and lack of oversight and that perceptions are all over the map.

What is the plan for establishing the currency as a stable unit with value when there is no central controlling body?

Why do you scam people? (0)

Anonymous Coward | more than 3 years ago | (#36436500)

Answer honestly.

Accessibility (0)

Anonymous Coward | more than 3 years ago | (#36436510)

Right now, this technology is accessible/trusted to the people who have the capacity to understand it's underlying technology. In order for the non-tech public to accept this new technology (apart from the problems like merchant adoption and user-friendly client software), the underlying trust will need to shift from "the banks know what their doing" to "the geeks know what they're doing." What types of issues do you see with the public adapting in this regard? What about people who simply don't use computers on a regular basis?

Tax avoidance and illicit trading (1)

slim (1652) | more than 3 years ago | (#36436522)

Some "benefits" of Bitcoin, from one perspective, appear to be that its cash-like properties lend themselves to tax avoidance (making transactions without declaring them), illicit trading (e.g. drugs or prostitution) and money laundering.

Do you view this as a positive, a negative, or neutral? If you view it as a problem, how can the problem be mitigated?

Lost/forgotten bitcoins (3, Interesting)

algorimancer (2266264) | more than 3 years ago | (#36436534)

One thing that concerns me is the fixed maximum number of bitcoins. Lets say people acquire bitcoins, but the amount isn't enough to worry about, so they never use them, or perhaps their computer crashes and they don't have a backup. My understanding is that these bitcoins are permanently lost from the economy of bitcoins. Over time, the total supply would begin to dwindle, presumably pushing up the value of those that remain, until people become frustrated at the small supply and are motivated to move to a new system, then bitcoin is abandoned. In the real world this happens with dollar bills, but the government can compensate for this by creating more. Is this issue addressed in some fashion.

Re:Lost/forgotten bitcoins (2)

vlm (69642) | more than 3 years ago | (#36436806)

One thing that concerns me is the fixed maximum number of bitcoins. Lets say people acquire bitcoins, but the amount isn't enough to worry about, so they never use them, or perhaps their computer crashes and they don't have a backup. My understanding is that these bitcoins are permanently lost from the economy of bitcoins. Over time, the total supply would begin to dwindle, presumably pushing up the value of those that remain, until people become frustrated at the small supply and are motivated to move to a new system, then bitcoin is abandoned. In the real world this happens with dollar bills, but the government can compensate for this by creating more. Is this issue addressed in some fashion.

Floating point BTC, essentially. Technically its actually fixed point with lots -o- decimal places.

At an instantaneous level, the whole "economy", at least as a trade good, could function using a billion nano-BTC. or 10 ** 12 picoBTC.

At a long term level, its a bigger problem because all of our modern financial systems are organized around eternal debt-based growth and massive generational-scale central bank inflation. BTC inherently has an entirely different financial system, not just a way to toss virtual pennies around the net. THATs the problem you need to think about.

Built-In Deflation (0)

Anonymous Coward | more than 3 years ago | (#36436540)

Why is the system designed with built-in deflation? While it seems like an exceptional system in most respects, why have the total number of bitcoins limited over time? What is the purpose of this? It seems there are instances where there is a need to increase the volume of currency in circulation, as long as it is backed by value. Having it backed by "spare CPU cycles", is a very interesting idea, as it reflects a certain level of economic capacity, but my guess is that it can't scale beyond a niche based on this attribute. Is there a step after this? An end game? Once the "infrastructure" is in place, create a new instance with a different algorithm to allow for an expanding economy?

Regardless, I think the project is truly exceptional and fantastic! Keep up the great work!

Useful Calculations? (1)

Bodhammer (559311) | more than 3 years ago | (#36436544)

Is there any way to make the calculations more useful (i.e. Boinc) and still maintain the same level of difficulty in the computations? It just seems so wasteful to run Bitcoin at this time.

When are you going to fix the bugs in intersango? (0)

Anonymous Coward | more than 3 years ago | (#36436572)

You know, the one that makes trades get filled in a completely random order...

Additional privacy layers and smartphones? (1)

DriedClexler (814907) | more than 3 years ago | (#36436574)

Is there any serious development underway to make the privacy more robust? There has been talk of "Bitcoin laundry", where large pools swap their coins around between each other to make it harder to connect a coin/address with an owner.

But for this to seriously work, it needs a lot more people to be involved in it, and it has to be integrated in a way that's secure (against someone just keeping coins in the middle of a shuffle) and transparent to the user (so they don't have to think about the new addresses they generate, or which coins are optimal to send where for the maximum shuffle). How soon can we expect something like this?

Also, how soon will smartphones be able to handle this with the same ease as desktops and notebooks?

Austrian Acceptance (1)

MyFirstNameIsPaul (1552283) | more than 3 years ago | (#36436576)

I have found that the Austrians [wikipedia.org] have a hard time accepting the idea of a digital currency. The core of their argument seems to be that digital currencies are not made up of something that had value before being a medium of exchange, such as gold and silver. When I counter to them that BitCoin is made up of code and people pay money for things like video games, they argue that the video game would have to be the thing valued, not the computer code. How do you deal with these kinds of objections?

Re:Austrian Acceptance (1)

DriedClexler (814907) | more than 3 years ago | (#36436664)

Ja, ja! Die Oesterreicher haben echt Probleme mit der Idee von Bitcoin! Was fuer ein Geld ist das? Man kann es nicht mit den Haenden beruehren!

Convince me it's not a Ponzi scheme (5, Interesting)

Animats (122034) | more than 3 years ago | (#36436580)

Convince me it's not a Ponzi scheme.

The BitCoin ecosystem is composed of very flaky entities. The biggest "exchange", Mt. Gox, seems to be one person reachable only on IRC. They're a depository institution, and people have substantial balances with them. Not only are they not regulated, they don't even seem to have a business address.

The "exchanges" all seem to transfer funds in and out through even flakier services, like Liberty Reserve (somewhere in Costa Rica) and Dwolla (run out of a hackerspace in Des Moines). Neither is registered as a money transfer agency. What we're not seeing is some bank in Switzerland or Luxembourg, handling Bitcoins.

All these organizations are acting as depository institutions without a license to do so. None of them guarantees contractually that they will pay out funds within a set time. All are uninsured and unaudited. Most of them seem to be having some problems delivering cash lately now that there's been a crash in Bitcoins.

On top of this, the whole Bitcoin system is set up like a Ponzi scheme, where there's an advantage to getting in early.

It's probably already too late to get in, and it may be too late to get out.

Re:Convince me it's not a Ponzi scheme (1)

alen (225700) | more than 3 years ago | (#36436752)

and don't forget that to "mine" this currency you have to spend real money on a computer and the resources to keep it powered on and working 24x7

Forgery (1)

gambino21 (809810) | more than 3 years ago | (#36436624)

How does bitcoin prevent forgery? What's to stop someone from modifying their local database to give themselves lots of money, and how do you verify that money coming to you is real?

Re:Forgery (0)

Anonymous Coward | more than 3 years ago | (#36436784)

That's not how it works.
Your local wallet only contains the keys to the addresses containing the BitCoins in the distributed blockchain database.
You only have access to do transactions with the coins that are under the addresses you have the keys for.

Re:Forgery (1)

Mark Oates (2266330) | more than 3 years ago | (#36436850)

It's impossible for an actual Bitcoin to be forged. It can only be created when it is mined, and all nodes get a copy of who received that mined "block". If you try and create "lots of money" on your computer, then initiate a transfer to another person, your "fake bitcoin" will dematerialize before it even reaches the other person. The transaction has to be approved by many nodes on the network, all of which have a copy of the ledger (all transactions that have ever occurred, verifying who has what bitcoins)

Informative (-1)

Anonymous Coward | more than 3 years ago | (#36436644)

Amazing! Your article has a ton of viewers. How did you get all of these bloggers to see your blog I’m very jealous! I’m still studying all about posting information on the web. I’m going to look around on your site to get a better understanding how to get more visible. Maybe you may also want to visit this site too Baltimore Nightlife [edenslounge.com] Thanks!

Will governments let it survive? (2, Insightful)

merdaccia (695940) | more than 3 years ago | (#36436652)

We live in a world where the supply and movement of money are controlled by governments, central banks, money laundering laws, and financial institutions. How can BitCoin survive in this world? Middle men like banks stand to lose a fortune in fees and exchange rates, governments stand to lose a fortune in taxes if they can't track money movement, and the black market stands to gain a silent way to move value. For BitCoin to gain adoption, some major retailers need to start supporting it, but given the above risks, what stops a government from telling companies in its jurisdiction that they can't accept it?

5-step formula (3, Informative)

Nidi62 (1525137) | more than 3 years ago | (#36436662)

1. Create new "currency"

2. Make new "currency" progressively harder to acquire as time goes on

3. Get new people to buy into the "currency"

4. Sell off your easily gained currency holdings to new adopters

5. Profit!

Hey guys, I found Step 4!

Extreme instability of Bitcoin vs. USD (5, Interesting)

Limerent Oil (1091455) | more than 3 years ago | (#36436674)

My question: Why would any merchant IN THEIR RIGHT MIND want to deal with Bitcoin? With the insane USD-to-Bitcoin exchange-rate gyrations happening lately, why would any serious retailer even bother, when the value of Bitcoin vs. USD could change by 50% or more in just a few hours?

Re:Extreme instability of Bitcoin vs. USD (1)

Zerth (26112) | more than 3 years ago | (#36436876)

Any merchant accepting bitcoin will treat it like paypal(an equally unreliable payment method): as often as you can, sweep it into a real bank.

How many early adopters? (2)

rasmusbr (2186518) | more than 3 years ago | (#36436682)

How many early adopters were there, or in other words: how many people were involved in mining the first one million Bitcoins?

BitCoin Security (0)

Anonymous Coward | more than 3 years ago | (#36436718)

Over the years while compute power increases we regularly increase key sizes in every application that uses encryption. How does this work in bitcoin? Is there a mechanism to handle this? What about the old private keys that have been used? Can they be marked expired and recreated with a new larger key size? Even if so, what about those that don't bother to create new keys? If someone is eventually able to figure out a private key that was used won't they be able to sign as that key? I'm really curious what bitcoin's mechanism is to protect against this as compute power increases. I'm thinking mainly of private keys because it seems like being able to sign as someone else can be really damaging, but the hash algorithms must be accounted for as well?

Being a fiat currency, even a small flaw can destroy the faith in and so the value of the currency, so this seems pretty important. From my perspective the potential for a flaw to be found over the years majorly detracts from possibility of considering bitcoin as useful currency. If a notable flaw is discovered or exploited then overnight the entire system can be destroyed and the currency could lose all value. Any thoughts on why we shouldn't be concerned about this?

What about the lack of inflation? (5, Interesting)

Cyberax (705495) | more than 3 years ago | (#36436726)

What about the lack of inflation?

It's long known that economic growth is severely stunted without some measure of inflation. Adopting bitcoins for the global economy would mean that policymakers lose control on money supply, and while there are advantages in this, disadvantages far outweigh them. Additionally, adopting a global currency standard will deny governments ability to influence currency rates robbing them of yet another way to control the economy.

Is there any plan to solve this? Maybe a system of independent bitcoin 'roots' operated by governments would help?

How do you plan to deal (1)

geekoid (135745) | more than 3 years ago | (#36436738)

with the regulations of trading when you get big enough?

As someone who create a smart card system that allowed merchants to put on and take off units of currency on a smart card, I knos first hand how fast the regulations will change so that a bank must be included.

seriously, undermining the relative stability of an economic environment will not go well, and that's exactly what would happen if bitcoin where to get huge.

haha... (0)

Anonymous Coward | more than 3 years ago | (#36436740)

"You can (some) things with Bitcoin"

i guess it would have been too dishonest to say that you could "buy" anything with such a bullshit ponzi-scheme scam.

Here come the regulators.... (1)

xxxJonBoyxxx (565205) | more than 3 years ago | (#36436744)

How will your business change when countries regulate exchanges?

How do you ensure your exchange isn't being used for illicit purposes (to avoid being shut down by government authorities)?

e.g., http://wnflam.com/news/articles/2011/jun/08/senators-seek-crackdown-on-bitcoin-currency/ [wnflam.com]

Exchange rate (0)

gambino21 (809810) | more than 3 years ago | (#36436754)

What is the exchange rate between dollars and bit coins? How do these exchanges take place, and is there a risk that the value of bitcoins will deflate making them worthless?

Nobody cares about bitcoin. (0)

Anonymous Coward | more than 3 years ago | (#36436808)

And I'm a hipster.

Terrible interviewee - get Gavin instead (0)

Anonymous Coward | more than 3 years ago | (#36436816)

Amir isn't worth listening to. He loves online poker and getting customers to trade on his exchange, but is useless wrt technical knowledge and capabilities.

Watching him on TWi Startups left me cringing almost every time he opened his mouth - stuttering the same few bulletpoint ideas for an hour and showing little understanding of the questions he dived in on. An energetic guy who wants to make money using something new-and-exciting he may be, but Slashdot deserves much better for chatting about something as novel, useful and *technical* as bitcoin. Slashdot accepting people for an interview that cop-out of technical questions? What the shit, people - bad choice.

Gavin Andresen, on the otherhand is a technical guy (running the bitcoin.org project, no less) who happens to *also* run services and generally get the bigger picture.. he makes this thing tick, blogs his ideas and reactions to bitcoin coverage plus he tweets quite often to answer questions (..someone want to fetch him from the twitterverse?)

hypothesis (creds to #arlenarlenarlen) (1)

Okneff (522357) | more than 3 years ago | (#36436822)

Is bitcoin just a scam, invented by nVidia to sell GPUs?

How do you respond to Tyler Cowen? (1)

Shreav (195174) | more than 3 years ago | (#36436826)

See him here [marginalrevolution.com] , here [marginalrevolution.com] and here [marginalrevolution.com] .

In short: Although Bitcoin may have some admirable features as a medium of exchange, why do you suppose that it can represent a popularly desirable store of value when there are so many other excellent alternatives?

Note that a successful currency requires both features. Absent a reason to store value in bitcoins, people will keep their stock of wealth in other assets and then exchange them into bitcoins only when they need to engage in a transaction. But in that case, the real value of a bitcoin will be approximately zero; it will be slightly positive if the market deems its virtues as a medium of exchange to exceed those of other currencies, but beyond that, it will be zero.

free market (1)

marcuz (752480) | more than 3 years ago | (#36436856)

bitcoin is free market money. if you're not interested, nobody is forcing you to use it so stop whining about it not being regulated. just continue using your equally worthless dollars and trust your governments to save the day. some people buy gold because it's the most proven storage of wealth. some buy into schemes like stocks, bonds, etc. if some like the bitcoin so be it. perhaps its wise for some comrades to move to a socialist totalitarian country where everything is regulated and handled by the government.

New Bitcoin Forum (1)

Anonymous Coward | more than 3 years ago | (#36436868)

Since I've discovered Bitcoins I've been very enthusiastic about the possibilities of a virtual currency.

In this paper http://www.newbitcoin.org/documents/newbitcoin.pdf I have tried to describe some problems of the current Bitcoin system, together with some possible improvements.

On the 'official Bitcoin forum' I have been trying to explain my views and express some concerns, resulting in:

        * Some positive reactions, some in public, some in private, for which I thank the issuers.
        * Some valid critique or discussions concerning content, for which I thank the issuers..
        * Way too many reactions, either with or without critique, containing disdain, misquotes or false accusations.
        * A forum policy where all 'newbies' were banned to a special 'Newbie area'.

The ban has been lifted, but I cannot be sure it will not happen again. Further, I want an open, civilized discussion, in order to come to a better Bitcoin, but decided to no longer waste my time on defending my paper on a forum where the atmosphere is more about trying to tackle one personally than about issuing valid critique.

It is my view that a lot of the agressiveness comes from the fact that already there seems to be a lot of money involved in Bitcoins and people are more worried about their investments than about Bitcoin improvements. And it is my opinion that a new Bitcoin distribution scheme is inevitable. I want to create an environment where this opinion can be explored freely.

Therefore, I want to invite anyone that shares my belief in a better Bitcoin on this forum: http://bitcoinforum.org. I also invite anyone with other opinions to spawn their critique, valid or not valid. With the only restriction that only polite and respectful posts will be allowed.

Load More Comments
Slashdot Login

Need an Account?

Forgot your password?
or Connect with...

Don't worry, we never post anything without your permission.

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>