Bitcoin's $137k Jackpot

Like Maxwell's equations?

Anyway, for (b) security it claims to be secure by providing a way for the bank A to reveal the identity P of the double-spender mathematically from the duplicate spent coins.

I agree that these ideas solve different issues.

Bitcoin is set up for making payments to individuals far away and anonymously (or pseudo anonymously). This makes it possible to say, order a pizza with Bitcoin. By the time the pizza is done being made it's possible for the merchant to verify the transaction. Completing a transaction on the sneakernet would be akin to carbon-copying a credit card when the network is down.

These other digital currency ideas are different and seem easier to implement for making a purchase at 7 Eleven and leaving within 10 seconds or making purchases without a network and knowing that the value is there.

Yes, it requires banks, like checkbooks require banks, but a digital currency can offer some benefits that paper checks don't, and it shows that Bitcoin has limitations. The drawback would be negotiating an agreement with a financial institution.

In terms of the article, Bitcoin makes it very easy to lose money, especially if someone loses their private key.

Maxwell's equations don't yield workable GPS. You need general relativity. Similarly, you need a blockchain (or some similar solution for the double-spend problem) for a workable digital currency.

> Anyway, for (b) security it claims to be secure by providing a way for the bank A to reveal the identity P of the double-spender mathematically from the duplicate spent coins.

Yes, exactly, it needs a centralized authority (the bank). You're citing a digital currency scheme that was never workable enough to be implemented and that was state of the art 25 years ago, which is an eternity in the world of digital currencies. Can we please talk about what's state of the art today?

> These other digital currency ideas are different and seem easier to implement for making a purchase at 7 Eleven and leaving within 10 seconds or making purchases without a network and knowing that the value is there.

... umm, like a credit card? That solves your use case of being able to pay for it quickly. It's also been around for decades. Or for something that works when the network is down, how about a simple smart card, like that can be used to pay for bus rides? Again, decades-old technology. Not revolutionary now. Still requires a centralized authority. You're talking about long-solved problems.

If you want to do it with no central authority, which is the key thing, then now we need to use blockchain technology. If you're willing to accept the low risk inherent in 0-conf transactions, you can use Bitcoin for your theoretical "buy something cheap at 7-11 in 10 seconds" use case. If you want to reduce risk further, you can use Lightning Network or similar, which is a further evolution on Bitcoin that does allow ironclad sub-second confirmations. I highly suggest that you look into it. It sounds like what you are most interested in.

I don't know how else to make this important fact clear to you: If you have a centralized authority, then there's nothing new under the Sun, and it's all possible with decades-old technology. It's not really a digital currency though, it's just a method for moving entries around in a centralized digital ledger. It requires trust in banks and governments. Decentralized digital currencies like Bitcoin require only trust in math. This is a huge difference in kind, not degree, but you keep suggesting schemes that don't even have this important property. I get that you don't think it's important, but at least maybe try to understand it?

The Okamoto-Ohta scheme might seem like handing out gift card codes to people as payment to you, but there are interesting mathematical properties to it that move responsibility further up the ladder than simply saying you're SOL if you've been handed a spent card number.

If you hold BTC you might not want to hear that Bitcoin has faults, but it does.

Outside of practical problems, it's labeled as a cryptocurrency but the design of it, besides wallet keys, uses little cryptography. The scheme of signing cash values to anonymize spenders' identities unless counterfeiting occurs involves much more cryptographic math. If you try to research this field on Wikipedia for instance, only 'decentralized' cryptocurrencies are explained in the cryptocurrencies article, which involve little cryptographic math. Even if you think what I'm describing is ancient history, it is not well known to everyone.

Proof of work itself is not very much based in cryptography, even if it's implemented with hash functions, so the real breakthrough (on the crypto side) is signing accounts with public/private keys which isn't revolutionary to anyone who has used RSA before.

Bitcoin is revolutionary like bittorrent is, and in this case I'm not interested in the P2P implementation. I do understand its value to users of Bitcoin, however. But in some ways, beyond its implementation which is quite complicated, the block chain itself is completely centralized, while the miners are decentralized.

A scheme with issuing banks might be centralized but I'd rather call it ad hoc.

Credit cards and smart cards place trust in a different position than electronic cash. It provides identity information to the merchant, and can allow the merchant to set the price of the transaction. It's also possible to reverse charges or overdraw accounts. The case of double-spending in the Ot-Oh is an instance of fraud and the perpetrator is then identified. This is a completely unique mathematical argument, and yes it is new, if it hasn't been implemented in the 25 years since it was discovered.

The two sides of this argument are what is more important: the mathematical basis or the software implementation.

It also might be the case that what you are entertaining is the discussion of a currency and what I want to discuss is the implementation of a digital form of exchange.

So, if Bitcoin Bank A issues Bank A digital cash, backed by Bitcoin, then merchants or friends that accept bank A's digital cash can make offline transactions with digital currency in the way explained above with specific programs or devices. Starting accounts would require more than using Bitcoin, ie. providing identifying information like SSN, but the commonplace use of the digital cash would be secure and convenient while being arguably more reliable/convenient than either cash or credit cards and faster than accepting Bitcoin transactions directly.

It might be hard to see because of how many uphill battles Bitcoin has had to fight, now that some sellers are willing to accept it, but there are many details to the hand-to-hand transactions that aren't convenient, like messing up fees or needing to wait for blocks to be accepted. Waiting 10 minutes for a charge to pass before getting something out of a vending machine, for example, or having your card information stolen by a faulty vending machine card reader for your run-of-the-mill credit card.

The truth is both BTC and other digital cash forms have the same problem - there are no chargebacks. So if you purchase something at a distance with either, there's no way for a refund if someone runs off with your money.

So to summarize - yes, there are trade-offs between any implementation and there are differences between currencies and forms of currency, which are not totally exclusive, and I'm still learning about Bitcoin, so thanks for the information.

Negative on the second part. The only reason that the P2P network exists is to (a) get blocks (which all nodes do), and (b) share transactions so that they can be included in blocks. Once a transaction is in a block, that's it, it's on the chain. It isn't transmitted separately. Once a node gets a new block over the P2P network, it validates it, and removes all of the transactions included in it from its transaction pool.

> But is it not possible that at about the same time, another miner finds a valid block containing one or more of the same transactions used in the special block (though obviously not the so-far private high-reward one) and broadcasts that

Yes, conflicts can and do happen (this is called a fork). It's actually quite likely, when you think about it; if blocks are found an average of once every ten minutes, and say it takes a few seconds for the P2P network to transfer the latest 1 MB block to all nodes, then you can have a situation were two mining pools find blocks simultaneously that conflict. The longest chain always wins out, otherwise it's whatever block you mined first. Absent an adversarial situation, the odds of having a fork that lasts even two blocks is so low that it should happen on average well less than once a month.

I want to point out an incorrect understanding in this one particular statement though:

> another miner finds a valid block containing one or more of the same transactions

Blocks don't conflict because they have the same transactions, they conflict because each block has a parent, and multiple blocks with the same parent is a conflict. Even if two blocks had no duplicate transactions between them at all, if they topologically form anything other than a straight line on the blockchain (i.e. sharing a parent) then they conflict, and only one will win out.

> if the block containing the special transaction falls by the wayside, that transaction could be included in another valid block by any miner?

Yes, it could be, but I do not believe that the Bitcoin software by default adds transactions to its transaction pool from orphaned blocks. That might be an optimization you could make if you wanted to take advantage of high-fee transactions that end up being orphaned that aren't broadcast to the network before inclusion into a block.