Bitcoin, a service and the micro-micro-economy • Hacker News Board

Re: Bitcoin, a service and the micro-micro-economy

#51

Post by JoeAltmaier » Wed, Mar 30, 2011, 1:58 PM UTC

PostOnce wrote: post #49

dublinclontarf wrote: post #29

Earlier quoted context omitted.

How will you do that? I don't even have wireless. Jokes aside, the current financial system has the exact same problems, and infact can be worse, especially with username:password based authentication. If someone skims your ATM card and gets your pin number too bad, you've lost the money. Or you could have your wallet pickpocketed, and the thief would be gone without you even knowing the money was missing. What about…

Bitcoin banks negate true anonymity, the govt can contact the bank and ask for acct details, so they are worse than regular banks, being uninsured, unregulated, and unsecured. Also, real banks have men with guns (not to mention the capability to summon heavily-armed police officers on very short notice) to protect them. Neither your computer nor your bitcoin bank is 1] stored in a vault or 2] protected by armed guard…

Sure online banking has risks. But do you imagine the cash in the vault at your local bank branch has anything whatever to do with your deposits at that bank? Regular banks use computers too. Police and guns (physical security) have nothing whatsoever to do with security differences between bricks-and-mortar banks and online ones.

Re: Bitcoin, a service and the micro-micro-economy

#52

Post by trotsky » Wed, Mar 30, 2011, 1:58 PM UTC

dublinclontarf wrote: post #48

trotsky wrote: post #45

Earlier quoted context omitted.

While the current financial system does suffer from many of the same problems, the difference is that there is a sophisticated infrastructure that exists to combat this behavior in these cases. Law enforcement, security services, intelligence agencies, government regulators, bank and credit card employees and insurance companies, among others, all work every day to mitigate these risks on behalf of their respective s…

And you don't think anyone in the bitcoin world is working on the same thing? >the difference is that their a sophisticated infrastructure that exists to combat.... Infrastructure becomes moot when it's too "sophisticated" for granny(or me,I mean really, how often haveI lost my online banking key fob? or I have to enter an endless string of numbers just to see my balance?) to use. And besides, we have the "sophistica…

While I find it difficult to believe you don't actually understand what I was saying, I will clarify.

The basic difference is that if someone manages to steal $1000USD from my bank account, the overwhelming odds are that I'll get it back, if for no other reason than my bank will cover it. If someone steals 1000BTC from my wallet, the odds are vanishingly small that I'll ever recover it.

Clearly the CIA isn't acting directly on behalf of your grandmother if someone steals her credit card, but then again local law enforcement isn't acting to derail sophisticated electronic attacks against the international banking system. Never the less, they both have their roles that they play in protecting the financial system over all.

Re: Bitcoin, a service and the micro-micro-economy

#53

Post by dublinclontarf » Wed, Mar 30, 2011, 2:06 PM UTC

PostOnce wrote: post #49

dublinclontarf wrote: post #29

Earlier quoted context omitted.

How will you do that? I don't even have wireless. Jokes aside, the current financial system has the exact same problems, and infact can be worse, especially with username:password based authentication. If someone skims your ATM card and gets your pin number too bad, you've lost the money. Or you could have your wallet pickpocketed, and the thief would be gone without you even knowing the money was missing. What about…

Bitcoin banks negate true anonymity, the govt can contact the bank and ask for acct details, so they are worse than regular banks, being uninsured, unregulated, and unsecured. Also, real banks have men with guns (not to mention the capability to summon heavily-armed police officers on very short notice) to protect them. Neither your computer nor your bitcoin bank is 1] stored in a vault or 2] protected by armed guard…

>the govt can contact the bank and ask for acct details

And the bank, being a website(quite possibly based outside the government in questions reach) can ignore them. And that's if the "banks" really have any information about you besides your username and password.

>they are worse than regular banks, being uninsured, unregulated, and unsecured.

Why would a website(aka, the bitcoin bank) that stores a few bits, information(which is what bitcoins are, information) need to be insured, or secured(apart from backups). And being unregulated is a good thing, it allows the "bank" to provide the services their customers want.

You do know that the reasons real banks have all these things is because they don't have all the money their depositors think they have right?

> Also, real banks have men with guns (not to mention the capability to summon heavily-armed police officers on very short notice) to protect them.

Because the criminals will "break" into your bitcoin "bank" with guns and steal your bitcoins... at gunpoint? What? Have you even read what you wrote?

Encrypt the hardrive, and not even the might of the Soviet Army can get those bitcoins. Are you truely that stupid? Really?

I don't know what else to say.

Re: Bitcoin, a service and the micro-micro-economy

#54

Post by lutorm » Wed, Mar 30, 2011, 2:08 PM UTC

rmc wrote: post #30

dublinclontarf wrote: post #9

Allow me to extol the virtues of bitcoin over the current credit-card/banking based payment system. 1)Hard money, once you receive payment in bitcoin it stays with you, meaning no chargebacks(Paypal, credit cards, looking at you). 2)Fast payment, you can recieve payment within minutes of it being made(sometimes faster, but more on this in a moment). 3) Low barriers of entry, to start accepting bitcoin you don't need…

1)Hard money, once you receive payment in bitcoin it stays with you, meaning no chargebacks(Paypal, credit cards, looking at you). I read this as: "If you give bitcoins to someone in exchange for goods/services and they don't deliver, you're screwed, your money is gone, there is no-one you can talk to". That sounds like it's good for sellers and bad for buyers.

Yeah, this is what makes no sense to me. In a f2f transaction, I exchange money for goods. In a virtual transaction, it creates a fundamental asymmetry if the money transfer can't be reversed, since you have no way of verifying the other part of the transaction, i.e., that the goods were actually shipped.

The bitcoin proponents make a big deal that transactions can't be reversed. But if you continue reading the FAQ, they also make a big deal about the fact that you shouldn't deal with people you don't trust and that it's your responsibility. I'm sorry, but that doesn't make sense to me. If transactions were only done between trusted parties, there wouldn't be a need for chargebacks either. You want to put the responsibility entirely on the customer, who has no practical ability to judge trustworthiness of an online retailer.

An escrow service doesn't make sense either. Then I have to trust that service. Maybe if some well-known non-bitcoin entity offered such a service, I would be inclined to trust it. But for now, it doesn't seem to me that any of the bitcoin entities have enough to lose to convince me that they're not front ends for scamming operations. I mean, Bernard Madoff and Enron were scams, how in the world could I judge that these operations aren't?

It's true I don't have much trust in the government to go find my money when my wallet's picked out of my pocket. But I do have some trust in that if a store front just took customers' money without giving anything back, they would be shut down pretty soon.

No, what's needed is a scheme which not only ensures the currency transaction, but the entire transaction. It seems that, at least for digital goods, one should be able to design a system where the good is encrypted, and the use of your key to decrypt it simultaneously effects the currency transaction. Still doesn't ensure the content is what they said it would be, though...

Re: Bitcoin, a service and the micro-micro-economy

#55

Post by [deleted] » Wed, Mar 30, 2011, 2:11 PM UTC

JoeAltmaier wrote: post #51

PostOnce wrote: post #49

Earlier quoted context omitted.

Bitcoin banks negate true anonymity, the govt can contact the bank and ask for acct details, so they are worse than regular banks, being uninsured, unregulated, and unsecured. Also, real banks have men with guns (not to mention the capability to summon heavily-armed police officers on very short notice) to protect them. Neither your computer nor your bitcoin bank is 1] stored in a vault or 2] protected by armed guard…

Sure online banking has risks. But do you imagine the cash in the vault at your local bank branch has anything whatever to do with your deposits at that bank? Regular banks use computers too. Police and guns (physical security) have nothing whatsoever to do with security differences between bricks-and-mortar banks and online ones.

[deleted]

Re: Bitcoin, a service and the micro-micro-economy

#56

Post by lutorm » Wed, Mar 30, 2011, 2:12 PM UTC

dublinclontarf wrote: post #50

jrmg wrote: post #46

Earlier quoted context omitted.

I guess our political views differ. I find the idea of cheating on taxes rather distasteful. In any case, morals aside, I don't really see why this is different to cash for taxation purposes. Cash is also basically untraceable, and while there are certainly plenty of under-the-table transactions that mean it's not taxed 100% accurately, it's pretty hard to get away with avoiding taxes indefinitely if you're handling…

Exactly just like cash, people like cash. However you could sell a lot of online services with bitcoins, potentially millions of USD worth without the taxman getting so much as a sniff that anything odd is happening. Nor even if they investigated you would they be able to prove anything(depending on your lifestyle,no pricy sports cars). With regards to my political views, I'm not a fan of paying governments to screw…

I tend to like the idea of keeping the wealth I created.

You should add, "while letting everyone else pay for the benefits I receive," just so it's clear.

Re: Bitcoin, a service and the micro-micro-economy

#57

Post by shazow » Wed, Mar 30, 2011, 2:19 PM UTC

PostOnce wrote: post #26

dublinclontarf wrote: post #9

Allow me to extol the virtues of bitcoin over the current credit-card/banking based payment system. 1)Hard money, once you receive payment in bitcoin it stays with you, meaning no chargebacks(Paypal, credit cards, looking at you). 2)Fast payment, you can recieve payment within minutes of it being made(sometimes faster, but more on this in a moment). 3) Low barriers of entry, to start accepting bitcoin you don't need…

You know what else is great about it? The money is stored as a file on your computer. I can steal it from my laptop from the park across the street from your house and be gone before you know its missing, and you will never, ever be able to find me. All I have to do is steal your wallet file and transfer the bitcoins to my account, and the money is irreversibly mine. Computer security being what it is, and with bitco…

What about storing Bitcoins in "the cloud" (effectively becoming a bank)?

Or even something like Dropbox, especially if the drive becomes password-encrypted without internet and there's a remote-disconnect feature when online.

Re: Bitcoin, a service and the micro-micro-economy

#58

Post by dublinclontarf » Wed, Mar 30, 2011, 2:21 PM UTC

lutorm wrote: post #54

rmc wrote: post #30

Earlier quoted context omitted.

1)Hard money, once you receive payment in bitcoin it stays with you, meaning no chargebacks(Paypal, credit cards, looking at you). I read this as: "If you give bitcoins to someone in exchange for goods/services and they don't deliver, you're screwed, your money is gone, there is no-one you can talk to". That sounds like it's good for sellers and bad for buyers.

Yeah, this is what makes no sense to me. In a f2f transaction, I exchange money for goods. In a virtual transaction, it creates a fundamental asymmetry if the money transfer can't be reversed, since you have no way of verifying the other part of the transaction, i.e., that the goods were actually shipped. The bitcoin proponents make a big deal that transactions can't be reversed. But if you continue reading the FAQ,…

Well you have to trust someone. We have an escrow service thats trusted by most bitcoin users. ClearCoin.

It's made and run by one of the main bitcoin developers.

Re: Bitcoin, a service and the micro-micro-economy

#59

Post by dublinclontarf » Wed, Mar 30, 2011, 2:28 PM UTC

trotsky wrote: post #52

dublinclontarf wrote: post #48

Earlier quoted context omitted.

And you don't think anyone in the bitcoin world is working on the same thing? >the difference is that their a sophisticated infrastructure that exists to combat.... Infrastructure becomes moot when it's too "sophisticated" for granny(or me,I mean really, how often haveI lost my online banking key fob? or I have to enter an endless string of numbers just to see my balance?) to use. And besides, we have the "sophistica…

While I find it difficult to believe you don't actually understand what I was saying, I will clarify. The basic difference is that if someone manages to steal $1000USD from my bank account, the overwhelming odds are that I'll get it back, if for no other reason than my bank will cover it. If someone steals 1000BTC from my wallet, the odds are vanishingly small that I'll ever recover it. Clearly the CIA isn't acting d…

>if someone manages to steal $1000USD from my bank account, the overwhelming odds are that I'll get it back, if for no other reason than my bank will cover it.

That all depends on how they stole it. If they skimmed your ATM card and got the pin then they have the money, and it's gone, and your bank won't give it back(you're supposed to keep the PIN secret remember), and the police can do nothing. The overwhelming odds are that your money, once gone is gone for good.

Also people don't steal bitcoins from your wallet, maybe they can steal the wallet itself but not the bitcoins from the wallet, and if that wallet is encrypted then good luck with that.

Re: Bitcoin, a service and the micro-micro-economy

#60

Post by vilhelm_s » Wed, Mar 30, 2011, 2:33 PM UTC

dublinclontarf wrote: post #35

ashconnor wrote: post #25

Earlier quoted context omitted.

Some of the negatives: 1)Phishing, if your private keys and password are compromised your money is gone. 2)Regulations, although governments would find it difficult, if not impossible, to regulate BitCoin. They can regulate the exchange of BitCoin into everyday fiat currencies. We seen this with the likes of e-gold when exchangers were cracked down on due to the ease of laundering money in the system. 3)Value, if peo…

1) see this http://news.ycombinator.com/item?id=2386956 2)In the near future there will be anonymous bitcoin exchanges, immune from government actions. http://weekly.co.nr/index.php?q=article/anonymous-money-need... 3)If people have no faith in the $ then that system will not work, the reality is than money is what people accept for goods and services, every currency whether bitcoin, USD,or gold is backed by the good…

I'm not very convinced. The excitement about bitcoin now is that it seems like a semi-mainstream alternative payment system. And a big part of that is that it seems legal in the first place.

Soon enough, I expect law enforcement to start to actively target bitcoin exchanges (see e-gold). Sure people can respond to this by using elaborate schemes like the one you link to ("When depositing or withdrawing from ATM's the runners/operators face must be concealed as they have cameras. The ATM's used must constantly be changed, they must essentially be random otherwise the operators can be caught"). Then the only way to obtain or sell bitcoins will then be to take part in this elaborate and blatantly illegal money-laundering scheme.

Criminals might still be willing to do that (although organized crime presumably have access to better money-laundering facilities already, so I'm not sure how many). But users of services like witcoin (bitcoin based micropayments to tip your favourite bloggers) presumably won't. Likewise, mining will become less popular if the only way to get money from it looks like it attracts the interest of the FBI. And how many will run the p2p client at all (so the entire trust network could collapse)?