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Bitcoin Exchanges Under ‘Massive and Concerted Attack’

coindesk.com

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Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#161

Post by hayksaakian »

mrkickling wrote: post #63
hayksaakian wrote: post #51

Earlier quoted context omitted.

part of the reason is that bit coin does not depend on any banks if you have 100 btc in an offline wallet, you will still have it tomorrow, despite whatever bugs/attacks hit the exchanges. imagine if your bank was hacked, many people would literally be removed of their money. With cryptocoins, you have the advantages of keeping dollars under your mattress while still bring able to spend them anywhere that accepts the…

In what way is that different from fiat money? You can keep fiat money in your mattress and spend it anywhere that accepts them. If you have $100 in a mattress (offline) then you would still have it tomorrow. The problem is that the moneys value may change tomorrow, especially if we are talking about bitcoin.

You need to physically be somewhere to spend cash, with BTC, you don't need a presence.

While you could construct a procedure to spend cash remotely without one powerful intermediate, this property is just built into to *coins, and it is simply how they work.

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#162

Post by lukifer »

StavrosK wrote: post #157
lukifer wrote: post #55

Earlier quoted context omitted.

In theory, applications can be built on top of the existing BitCoin blockchain, which is now well-guarded by many vested interests; some projects like MasterCoin [1] and Colored Coins [2] are attempting to do just this. But ultimately, you are correct: bootstrapping a new blockchain-based service requires assembling a community with enough hashing power to fend off 51% attackers. Time will tell how the experiment wil…

Does anybody know how on earth Bitcoin is supposed to scale in X years, when everyone needs to have every transaction ever made stored on their computer?

It's an implementation detail. Currently the reference wallet stores all transactions, but future versions will be able to prune old blocks and rely on more recent "reference blocks" as their starting point.

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#163

Post by Sheepshow »

branchan wrote: post #92
anigbrowl wrote: post #80

Earlier quoted context omitted.

There are these things called safes...

Are you going to put the safe under your mattress? Or do you think a secure encrypted and password protected wallet stored on a tiny USB drive or SD card might be more secure?

You're right, all solid savings plans must fit comfortably beneath a mattress. Reminds me of the old saying "If I can't lie down and sleep on top of it comfortably, it's not an investment"

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#165

Post by dogecoinbase »

Sheepshow wrote: post #160
pjc50 wrote: post #134

Earlier quoted context omitted.

Transaction irreversability makes it a lot riskier, combined with the lack of support from the legal system. If you lend bitcoins to someone, and they run off with them, how do you recover your loss? Conversely, unlike stocks, you don't need a broker, so there's nobody who would take on that dealer role. Nobody has setup a "buy bitcoin on margin" service yet, and the first person to do so will lose a fortune to nonpa…

Hang on I almost read that as meaning bitcoin has less financial capability as fiat currency, which we all know is patently false because the premise of bitcoin is centered around an increased flexibility compared with fiat currency.

You're quite wrong -- BTC is strictly less flexible than fiat. I have my own opinions, but this is inarguable and is presented as an advantage of Bitcoin, for example Bitcoin cannot be created arbitrarily by a government, Bitcoin transactions cannot be reversed, untraceable transactions cannot occur in Bitcoin, et cetera. All of these are clear restrictions upon existing currency systems.

Some possible ways that it might be interpreted to be more flexible are scripting, n-of-m transactions, and so on.

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#166

Post by this_user »

smrtinsert wrote: post #104
mrkickling wrote: post #63

Earlier quoted context omitted.

In what way is that different from fiat money? You can keep fiat money in your mattress and spend it anywhere that accepts them. If you have $100 in a mattress (offline) then you would still have it tomorrow. The problem is that the moneys value may change tomorrow, especially if we are talking about bitcoin.

A huge difference is fractional banking, which deserves a good read. http://en.wikipedia.org/wiki/Fractional_reserve_banking

I'd argue that fractional reserve banking is still better than having a "currency" that is backed by absolutely nothing and may lose up to 90% of its value on a moment's notice.

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#167

Post by SilasX »

kordless wrote: post #74
mrkickling wrote: post #63

Earlier quoted context omitted.

In what way is that different from fiat money? You can keep fiat money in your mattress and spend it anywhere that accepts them. If you have $100 in a mattress (offline) then you would still have it tomorrow. The problem is that the moneys value may change tomorrow, especially if we are talking about bitcoin.

You can't secure cash under your mattress with a password, for one thing. That makes cash (and paper wallets) venerable to physical attack, even by vermin: http://metro.co.uk/2007/03/27/mouse-eats-cash-machine-makes-... There is no problem with value changing tomorrow as this is a potential problem with any new payment methodologies. Adoption does not appear magically overnight. The US Dollar is velocity stable due t…

I'm not sure that's an apples-to-apples comparison.

In both cases, there is one physical good which, when stolen, deprives you off the money. With cash, it's the physical notes. With Bitcoin, it's the private keys in the wallet (or private key to unlock the wallet's private keys). Making backups of the keys can protect against accidental data loss, but not against theft, as it increases attack surface (i.e. number of locations where the same money can be stolen from).

There is still an advantage here favoring Bitcoin, though: if the key is stolen and you know this, you still have a chance to preserve the wallet's holdings: just generate new keys (addresses) and broadcast a transaction of all the wallet's money to those addresses. If you can get the message to the network's nodes faster than the attacker, the money will be "signed away" before they can use it, and such attempts will be rejected as double-spends.

There is no corresponding feature for physical cash.

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#168

Post by mpyne »

dnautics wrote: post #138
bduerst wrote: post #58

Earlier quoted context omitted.

Not only that, but the bitcoins themselves need solid liquidity before becoming a feasible currency. That's impossible with the impending cap. Right now, bitcoins are treated like digital gold. People hoard them and treat them like investment assets. And for the same reason the world's major currencies unlinked from gold, bitcoins also exhibits recessionary behavior. (bad news for a currency)

Another narrative goes as follows: The world's major governments unlinked their currencies from gold because it proved inconvenient for their regressive redistribution activities - cronyism, military-industrial complex, propping up the banking system, etc (not saying it's a conspiracy, just a natural consequence of authoritarianism). Note that the US unlinked in 1970 and the last year that the GINI coefficient improv…

> Note that the US unlinked in 1970 and the last year that the GINI coefficient improved was 1973. FDR temporarily unlinked in 1933 and we had the great depression [1].

The U.S. domestic economy unlinked in 1933, permanently. Only international trade continued to use gold-backed currency, and it is that aspect which was finally eliminated in 1973.

Likewise you have mixed up your cause/effect for the Great Depression, which started 4 years before 1933. On the contrary, the very election of FDR in 1932 was due to the economic crisis, and the unlinking of gold reserves was in response to the depression, not the cause of it.

One funny thing is that many people who are otherwise economically intelligent get so confused with gold. Holding currency to a gold standard by some fixed price would be called "price control" in any other context, and we already know price controls to be bad policy. By unlinking currency from gold we can well and truly "let the market efficiently decide".

The biggest irony for me with regard to Bitcoin is that it proves the fiat concept. Bitcoin is literally worth nothing more than what people think it's worth; there's no physical thing of intrinsic worth underlying it after all. But this is of course more or less exactly the claim for fiat currency.

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#169

Post by StavrosK »

lukifer wrote: post #162
StavrosK wrote: post #157

Earlier quoted context omitted.

Does anybody know how on earth Bitcoin is supposed to scale in X years, when everyone needs to have every transaction ever made stored on their computer?

It's an implementation detail. Currently the reference wallet stores all transactions, but future versions will be able to prune old blocks and rely on more recent "reference blocks" as their starting point.

That's interesting, thanks.

Re: Bitcoin Exchanges Under ‘Massive and Concerted Attack’

#170

Post by jonknee »

ye wrote: post #128
mrkickling wrote: post #64

Earlier quoted context omitted.

http://learncryptography.com/51-attack/ I guess it would be possible.

No, a botnet can't ever achieve 51%. One modern ASIC rig is equivalent to a few thousand average CPU+GPU computers that make up a botnet.

What about a botnet of modern ASIC rigs?
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