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Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

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Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#531

Post by Arbalest »

hndamien wrote: post #514
Arbalest wrote: post #379

Earlier quoted context omitted.

If you had a mechanism to price externalities, and it wasn't government, then sure ok. But while we have no effective externality accounting and enforcement, this notion of wastage still exists fairly. If we could price in externalities with a government, then perhaps they would be more worthy of trust for currency too? In terms of my original statement, I was effectively stating that the problem of decentralising cu…

It does not follow that if we can trust a Government to price carbon emissions then we should be able to trust them to not print money. We are basically guaranteed that they will, despite being able to effective disincentive things like smoking with an excise tax. It is trivial for Governments to implement a carbon tax which would improve environmental conditions for all energy intensive production. With regards to g…

Built in deflation you say? That once again, favours the incumbents. Those starting out will be at a disadvantage even more than they are now, for not having held any tokens of value. It also means that anyone who does attempt to do anything which requires money up front, whether that be starting a business, or starting a family, are at an even greater disadvantage. A rising tide lifts all boats, unless the boats haven't been built yet. Then it just becomes very difficult as more and more of the land is covered by the ever increasing tide.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#532

Post by conanbatt »

wpietri wrote: post #527
conanbatt wrote: post #516

Earlier quoted context omitted.

I dont think you've followed through on that model of yours. If you buy 50 dollars of taco materials, then taco materials seller makes likes than 50 dollars ,because the state will charge a tax on him. If he didnt sell 50 dollars worth of raw materials, he would have 50 dollars of raw materials to consume, instead of less than 50 dollars. On the other side, making the taco, you have the same issue: if you sell 100 do…

This makes no sense at all, and is not how business works. Most economic activity is positive sum. When I'm hungry and on the go, a taco is more valuable to me than raw taco materials, so I pay more for it. Value has been created. The taqueria owner takes money in, pays their expenses, and is left with a profit. Taxes are paid out of that profit, and you could just as well model it as another kind of expense, a socie…

> Value has been created

But not dollars, which is what you are using to classify gambling as negative-sum.

> Many countries use value creation as an explicit taxation model: https://en.wikipedia.org/wiki/Value-added_tax

If the gobernment collected that tax but didnt spend or issued money, even VAT ends up capturing all the money supply.

This is an unnecessary long argumentation. Gambling is not negative sum because they provider entertainment that has utility.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#533

Post by hndamien »

Arbalest wrote: post #531
hndamien wrote: post #514

Earlier quoted context omitted.

It does not follow that if we can trust a Government to price carbon emissions then we should be able to trust them to not print money. We are basically guaranteed that they will, despite being able to effective disincentive things like smoking with an excise tax. It is trivial for Governments to implement a carbon tax which would improve environmental conditions for all energy intensive production. With regards to g…

Built in deflation you say? That once again, favours the incumbents. Those starting out will be at a disadvantage even more than they are now, for not having held any tokens of value. It also means that anyone who does attempt to do anything which requires money up front, whether that be starting a business, or starting a family, are at an even greater disadvantage. A rising tide lifts all boats, unless the boats hav…

You seem to be ignoring the status quo. I only need to prove it better than the current system, you need to prove that the current system is better. Those families and businesses that start from nothing still need money. Just that currently the money they do get is going to be worth less in the future.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#534

Post by Arbalest »

hndamien wrote: post #533
Arbalest wrote: post #531

Earlier quoted context omitted.

Built in deflation you say? That once again, favours the incumbents. Those starting out will be at a disadvantage even more than they are now, for not having held any tokens of value. It also means that anyone who does attempt to do anything which requires money up front, whether that be starting a business, or starting a family, are at an even greater disadvantage. A rising tide lifts all boats, unless the boats hav…

You seem to be ignoring the status quo. I only need to prove it better than the current system, you need to prove that the current system is better. Those families and businesses that start from nothing still need money. Just that currently the money they do get is going to be worth less in the future.

Right, which means it is worth being spent. If spending is not worth it, then spending by and large dries up, resulting in a reduction of income to others, reducing the multiplier effect, and reducing the amount of actual trade that occurs. People continue to save as income opportunities dry up, and those with no income get royally screwed. With no risk taking occurring, things go back to bare essentials, which we are already very efficient at. Maintenance places are the only places which will maintain any expertise.

To be fair, I think there is already a risk of this, in any situation where capital becomes severely unequal. However, by making the monetary token itself an item of (appreciating) value, rather than only as means by which trade is mediated independently and in arbitrary small parts between multiple parties, is a sure way to speed that process up.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#535

Post by JKCalhoun »

beager wrote: post #301
tehsauce wrote: post #110

Earlier quoted context omitted.

The spooky thing that this made me realize, is that if anyone did find a vulnerability in bitcoin (or any cryptocurrency) is that they would have a greater incentive to only slowly leech off the system, because they will be able to siphon out much more over time than if everyone panics over security. The weapon is no good unless it's secret.

My assessment is that the greatest vulnerability in Bitcoin is its breathless supporters, who will look past the dynamics of Bitcoin in adoration of the mechanics of Bitcoin. To that end, larger, more sophisticated enterprises (banks, hedge funds, etc) are likely leeching slowly off the system, propping the price up and inflating it when they can, so they can extract as much value as possible out of its correction to…

I see so many red flags with Bitcoin that is amazes me that it still has its backers.

There would seem to be organizations (states?) that can wield tremendous resources to mine Bitcoins. I would think this would devalue the currency and, as is so often the case in life, fuck over the little people.

Never mind the insane amount of actual energy resources needed for this virtual currency. It almost seems immoral.

And with exploits like the one in this article, how can anyone continue to have confidence in it? It feels more akin to Confederate money printed during the U.S. Civil War.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#536

Post by hvidgaard »

nopinsight wrote: post #446
hvidgaard wrote: post #419

Earlier quoted context omitted.

People said the same thing about $1,000 when it reached $35. in about 6 months, bitcoin will be 10 years, so considering that it went from $0 to $20,000 in those 10 years, so as my statement say, it's not without reason to expect it to reach $70,000 in the next 5 years. People like to compare bitcoin to gold, which has an estimated current market cap of $6,000,000,000,000. Will gold ever generate more value than Goog…

Nearly 70% of gold is actually used as jewelry and in industrial applications (based on a diagram linked from an HN comment). So after 10,000+ years of trust building, the portion of gold used as a store of value is perhaps still less than $3 trillion. (Also, $20,000 Bitcoin was a tiny blip. The value was not sustained.) Gold is also quite unique and "best" or close-to-best in its collection of properties. Bitcoin is…

> Nearly 70% of gold is actually used as jewelry and in industrial applications (based on a diagram linked from an HN comment). So after 10,000+ years of trust building, the portion of gold used as a store of value is perhaps still less than $3 trillion. (Also, $20,000 Bitcoin was a tiny blip. The value was not sustained.)

I'd argue that jewelry is also a store of value. It doesn't serve a practical purpose, and was traditionally given as a gift for hard times. Industrial applications, fair enough. This also plainly written in your quote from [1]

> Bitcoin is not really rare and many other recent variants are "better" in a number of ways. Would the network effect be sufficient for its valuation to come close to physical gold? Warren Buffett, Robert Shiller, a well-known Nobel prize winner in economics, and several other respected economists say unlikely.

Bitcoin is exceedingly rare. Only 21 million will be created, and a non trivial portion of them is lost in wallets that no one controls. In [1] he states that "doesn't know what to make of bitcoin ultimately.". In [2] one of the main arguments seems to be "Practically no one, outside of computer science departments, can explain how cryptocurrencies work." which is true for the modern banking system too. Besides, it really isn't hard to explain the idea and workings, without going into the technical details.

One of the things that could super charge bitcoin is LN. The potential is enormous if adopted by companies.

The article in [3] shows a fundamental misunderstanding of bitcoin when it claims

> Bitcoin will be “mined” in diminishing quantities until it is exhausted in 2040, having delivered 21 million digital coins. In other words, there is no elasticity in the currency. This means that long before the mine is exhausted, the currency will run into the same problem as the gold standard: not providing enough money to support a growing economy and population.

Gold is limited by the smallest amount of gold you can reliably trade. Bitcoin have no such restriction. As the value of a whole bitcoin increases, you can trade a smaller and smaller fraction. At the current value 130 "Satoshi", which the name for the current smallest fraction possible to trade, is worth $0.01, so bitcoin can reach a value of $1,000,000 and still have the same monetary "resolution" as the current USD.

The last paragraph might on the face of it seems to contradict my statement about the rarity earlier. But there is a key difference. Because bitcoin is in limited supply, but possible to trade very small fractions of it, and ability to allow smaller fractions if needed, means that the currency is more likely to be deflationary, i.e. the money I save will not automatically be worth less because I do not use them.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#537

Post by hvidgaard »

rimliu wrote: post #455
hvidgaard wrote: post #419

Earlier quoted context omitted.

People said the same thing about $1,000 when it reached $35. in about 6 months, bitcoin will be 10 years, so considering that it went from $0 to $20,000 in those 10 years, so as my statement say, it's not without reason to expect it to reach $70,000 in the next 5 years. People like to compare bitcoin to gold, which has an estimated current market cap of $6,000,000,000,000. Will gold ever generate more value than Goog…

It also went from 20000 to 7000 in months, why not choose this trend to extrapolate?

Then call it $0 to $7000 in 10 years, it doesn't make it any less incredible.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#538

Post by russdpale »

jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

I do believe you are vastly underestimating how difficult an attack on the bitcoin network would be. I seriously doubt anyone other than a handful of state level actors could pull it off, and even then I am not sure. The amount of energy we are talking is tremendous, and gets orders of magnitude larger the more blocks you go backwards in time. The XVG hack only went back 22 blocks, that is mathematically, and most certainly financially and perhaps even physically impossible with bitcoin. The amount of energy and money spent would never, ever make it worth it.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#539

Post by GuthL »

wpietri wrote: post #510
nicky0 wrote: post #383

Earlier quoted context omitted.

How would you change the machinery?

Personally, I wouldn't. Most people don't want digital cash for the same reasons they don't use real cash: your risk of theft is higher, it's not as convenient to use, transactions can't be reversed, and you lose a lot of buyer protections. I use technology to solve problems for people. The few niches Bitcoin has found (e.g., speculation, money laundering, ransoms, light drug crime) are not really what I would call s…

Your personal opinion on cash is irrelevant to the subject. Cash has property you say you don't want. Some people might and do want them. Just have a look at what the relationship between Germans and cash.

Bitcoin has property similar to cash to many extend. It was not technically possible before its invention and as such as it is a real intrinsect value (dont ask me to quantify it)

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