Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin hits US$ 4, after being mentioned on CNN yesterday

mtgox.com

Post reply on HN
Print view View original

71–80 of 94 posts

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#71

Post by lsc »

JulianMorrison wrote: post #45
lsc wrote: post #38

Earlier quoted context omitted.

yeah; this is what scares me more about bitcoin than e-gold. With E-gold, the government went after the owners, and they were able to shut the whole operation down; I lost maybe two hundred bucks worth of gold. Now, when the government decides to shut down bitcoin, what happens? there is no central 'off switch' - just like drugs, they will have to go after the users, or like illegal information, they will have to go…

Interesting argument. Trying to go against users is hard, the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids. My guess is they would attack exchanges trading BTC USD. There are fewer, and separating the BTC economy from the USD one would make the currency significantly less attractive. Even the threat to do so would crash its USD price.

I hope you are right.

>the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids.

I think the war on drugs would be a counterexample to this statement. Especially considering that legitimate bitcoin use is largely confined to nerds, I don't think the government would have a hard time painting bitcoin users as people who ought to be punished.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#72

Post by 5l »

Unseelie wrote: post #61
borism wrote: post #58

Earlier quoted context omitted.

think of the bounties on someone like Kim Jong-Il Now think of the bounties on average folks like you and me in comparison. That's right, our lives will instantly be worth pennies and there'll instantly many folks around with incentive to murder.

Pennies is a bit extreme. The risk in the enterprise is pretty high, expert assassins rare, and amatures likely to get caught. While an expert assassin may take a job on a random Joe for on the order of a hundred dollars, an amateur with any sense will not, and therefor the price will be rather high. And, even if assassinations of pedestrians becomes realistically common..On the order of car crash mortalities, its at…

Right, because only bad people get assassinated.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#73

Post by tba »

gwern wrote: post #52
tba wrote: post #39

Earlier quoted context omitted.

Potential issues with anonymous currency include money laundering and assassination markets.

Link for those not familiar: http://en.wikipedia.org/wiki/Assassination_market Personally, I think assassination markets could be a net benefit (think of the bounties on someone like Kim Jong-Il), but then, I like them enough that I write stories about them so I'm biased: http://www.gwern.net/fiction/The%20Ones%20Who%20Walk%20Towar...

"think of the bounties on someone like Kim Jong-Il"

Did you ever think of the bounties on anyone inconvenient to governments or big businesses? The founders of The Pirate Bay, Julian Assange and Bradley Manning, BP whistleblowers, environmental activists and climate scientists – would society be better off with them all dead?

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#74

Post by forensic »

geuis wrote: post #66

Just as a quick reminder, since most people commenting don't understand how bitcoin generation works. It is not possible to "corner the market" by having more gpu power than other people. The btc algorithm was designed to only produce bitcoins at a constant rate. Adding a million more systems trying to calculate the answer to the next hash block only makes it a million times slower. If the bubble were to pop tomorrow…

It's very easy to game the system. You need roughly 30% of the network's total computing power and you can "steal" bitcoins from others.

The creator of bitcoin outlines a strategy for stealing bitcoins in the FAQ. In it, he claims that 50% of the computing power is necessary to do this. Later improvements to the technique (and simulations by various people) have shown that you can do it in much less, possibly as low as 15% of the computing power.

Bitcoin is highly vulnerable to a nation state or intelligence agency that wants to own it. It is also highly vulnerable to rich entrepreneurs who want to make a profit by cornering the market.

The NSA could destroy bitcoin in the blink of an eye with only a tiny fraction of their supercomputer power. Likewise for botnet operators and other professional extortionists who no doubt have their eye on bitcoin. The fact that bitcoin hasn't been destroyed yet is just a demonstration that the currency is not really worth anything right now.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#75

Post by jimrandomh »

forensic wrote: post #74
geuis wrote: post #66

Just as a quick reminder, since most people commenting don't understand how bitcoin generation works. It is not possible to "corner the market" by having more gpu power than other people. The btc algorithm was designed to only produce bitcoins at a constant rate. Adding a million more systems trying to calculate the answer to the next hash block only makes it a million times slower. If the bubble were to pop tomorrow…

It's very easy to game the system. You need roughly 30% of the network's total computing power and you can "steal" bitcoins from others. The creator of bitcoin outlines a strategy for stealing bitcoins in the FAQ. In it, he claims that 50% of the computing power is necessary to do this. Later improvements to the technique (and simulations by various people) have shown that you can do it in much less, possibly as low…

My (non-expert) understanding of the issue is that a having majority of the mining computation gives you the power to roll back transactions, but not to forge transactions that transfer money to you; and that the risk of having a transaction be rolled back on you can be reduced just by waiting for the block chain to get longer.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#76

Post by mrb »

forensic wrote: post #74
geuis wrote: post #66

Just as a quick reminder, since most people commenting don't understand how bitcoin generation works. It is not possible to "corner the market" by having more gpu power than other people. The btc algorithm was designed to only produce bitcoins at a constant rate. Adding a million more systems trying to calculate the answer to the next hash block only makes it a million times slower. If the bubble were to pop tomorrow…

It's very easy to game the system. You need roughly 30% of the network's total computing power and you can "steal" bitcoins from others. The creator of bitcoin outlines a strategy for stealing bitcoins in the FAQ. In it, he claims that 50% of the computing power is necessary to do this. Later improvements to the technique (and simulations by various people) have shown that you can do it in much less, possibly as low…

As low as 15%?

Citation needed please.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#77

Post by olalonde »

csomar wrote: post #18
DavidSJ wrote: post #10

Earlier quoted context omitted.

$4 per bitcoin? Not even the EUR and GBP have ever reached that in my recollection. Keep in mind that the exchange rate is a function of several inputs, one of which is the rather arbitrary fact of how much total currency is in circulation. There are many fewer BTC than USD, EUR, GBP, etc. (about one million times fewer, to be precise). And conversely, there are many more JPY in circulation, which is part of the reas…

You seem to be knowledgeable in this field. I have no idea about it and would like to get a small insight. Can you recommend a tutorial (Preferably less than 40 pages) that explains some of the main concepts?

http://en.wikipedia.org/wiki/Exchange_rate would be a good starting point.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#78

Post by forensic »

jimrandomh wrote: post #75
forensic wrote: post #74

Earlier quoted context omitted.

It's very easy to game the system. You need roughly 30% of the network's total computing power and you can "steal" bitcoins from others. The creator of bitcoin outlines a strategy for stealing bitcoins in the FAQ. In it, he claims that 50% of the computing power is necessary to do this. Later improvements to the technique (and simulations by various people) have shown that you can do it in much less, possibly as low…

My (non-expert) understanding of the issue is that a having majority of the mining computation gives you the power to roll back transactions, but not to forge transactions that transfer money to you; and that the risk of having a transaction be rolled back on you can be reduced just by waiting for the block chain to get longer.

rolling back a transaction and claiming it yourself is a kind of stealing

more advanced ways of stealing bitcoins have been developed and successfully simulated, for instance the dominant cartel can actually go several blocks ahead of everyone else but not advertise them, and then only roll back other people's finds when those people advertise them.

For instance the cartel using superior cpu power actually solves 2 blocks ahead of everyone else but does not tell the other nodes that it has solved it. It waits until someone else advertises that they have solved the block and then releases their own and rolls back the other person's.

There are many optimizations that can be made to improve this exploit. The exploit completely ruins any hope for bitcoins being an unmanipulated currency.

Even in the base case scenario where multiple cartels compete to dominate the bitcoins, the average person will be squeezed out and all the advantage will go to the cartels. It will end up WORSE than other currencies based on the credibility of the various governments.

The bitcoin concept is inherently flawed because cpu power is not democratic. Especially when it comes to the implementation details of bitcoins, which are actually very inefficiently computed on a regular person's computer. Purpose-built bitcoin computers are orders of magnitude more effective than normal computers, compounding the other issues with bitcoins.

The fact that most people's CPU cycles are migrating toward mobile battery powered devices does not help either. How many people do you know who still have bulky desktop computers plugged into the network 24/7 rather than mobile battery powered devices that spend more time offline than online?

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#79

Post by gwern »

tba wrote: post #73
gwern wrote: post #52

Earlier quoted context omitted.

Link for those not familiar: http://en.wikipedia.org/wiki/Assassination_market Personally, I think assassination markets could be a net benefit (think of the bounties on someone like Kim Jong-Il), but then, I like them enough that I write stories about them so I'm biased: http://www.gwern.net/fiction/The%20Ones%20Who%20Walk%20Towar...

"think of the bounties on someone like Kim Jong-Il" Did you ever think of the bounties on anyone inconvenient to governments or big businesses? The founders of The Pirate Bay, Julian Assange and Bradley Manning, BP whistleblowers, environmental activists and climate scientists – would society be better off with them all dead?

One Kim Jong-Il is worth all of Pirate Bay combined, and heck, throw in Assange & Manning as well (they've informed the public, helped out the historians a lot, and caused some irritation, but I see few concrete changes to stack up against hundreds of thousands of dead).

So, yes, I did think of the inconvenient people.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#80

Post by waterlesscloud »

lsc wrote: post #71
JulianMorrison wrote: post #45

Earlier quoted context omitted.

Interesting argument. Trying to go against users is hard, the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids. My guess is they would attack exchanges trading BTC USD. There are fewer, and separating the BTC economy from the USD one would make the currency significantly less attractive. Even the threat to do so would crash its USD price.

I hope you are right. >the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids. I think the war on drugs would be a counterexample to this statement. Especially considering that legitimate bitcoin use is largely confined to nerds, I don't think the government would have a hard time painting bitcoin users as people who ought to be punished.

The whole online poker kerfuffle is not an unrelated idea here.

The idea is that online poker chips were being used for money laundering, and the first point of control attempted was the exchange of chips for USD via banks.

Post reply on HN