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Why Bitcoin Matters

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Re: Why Bitcoin Matters

#111

Post by kolev »

drcode wrote: post #96
kolev wrote: post #60

Bitcoin matters, but it won't survive "as is" ("thanks" to hoarders and speculators). It just brought attention to a problem, which will get solved more elegantly.

Please let me know when web programming finally gets solved more elegantly, without the anachronistic ugliness of js/css/html.

Many have tried, but people keep using what they are used to. Same with Bitcoin. People will keep using their convenient credit cards regardless if they are a superior or a subpar technology. Until Bitcoin diehards get this simple fact and quit spreading delusions that Bitcoin is replacing cash, credit cards, and Western Union, people will not take them seriously.

Re: Why Bitcoin Matters

#112

Post by riemannzeta »

candybar wrote: post #5

The part about bitcoin entirely as a payment system makes no sense, because both the consumer and the merchant need an existing payment system, to convert into and out of bitcoin for this to work, in which case bitcoin is just a middleman doing no work. I suppose some payment systems are localized and bitcoin can work as a global bridge, but that seems like a trivial legal hack that will be shut down soon.

This is my issue with A16Z's claim also. So Bitcoin eliminates one of the failure modes of digital transactions -- namely, confirming that a particular ID indeed is associated with a particular account value -- in a way that avoids the need for intermediaries. That's great, but that's not the most important failure mode, and only part of what is needed to solve the Byzantine Generals' Problem. The generals need not only to authenticate the sender and content of the message, but confirm receipt and intent to act based on that content to the sender. It's that second step that I don't see Bitcoin solving. We still need intermediaries to handle chargebacks that result from fraud by either buyer (I didn't authorize this) or seller (this isn't what I agreed to pay for).

Re: Why Bitcoin Matters

#113

Post by sigil »

hendzen wrote: post #105
sigil wrote: post #80

Bitcoin is the first practical solution to a longstanding problem in computer science called the Byzantine Generals Problem. Wait, isn't Paxos arguably the first practical solution to BGP? [0] [1] It's been in production use at Google since at least 2006. [2] Furthermore, Paxos actually has a proof that timely consensus will be reached. Do we have the same level of rock-solid mathematical certainty about Bitcoin yet?…

No, Paxos is not a solution to BGP. Paxos explicitly does not consider malicious processes. EDIT: fixed typo

Paxos is Byzantine Fault Tolerant. A malicious node is a special case of failed node.

"The objective of Byzantine fault tolerance is to be able to defend against Byzantine failures, in which components of a system fail in arbitrary ways (i.e., not just by stopping or crashing but by processing requests incorrectly, corrupting their local state, and/or producing incorrect or inconsistent outputs)."

http://en.wikipedia.org/wiki/Byzantine_fault_tolerance

Re: Why Bitcoin Matters

#114

Post by plock »

BlackDeath3 wrote: post #97
plock wrote: post #91

Earlier quoted context omitted.

The degree to which you believe the guy will make good on his promise to always buy snail tails in exchange for water is the degree to which you believe snail tails are backed by water. We can be pretty sure the US government will generally make good on its promise to take US dollars in exchange for not prosecuting you for non-payment of taxes. >I reject your definition of "intrinsic value". Sounds sorta' like "regul…

If I have a comparable amount of confidence in my snail tail guy as I do in the USG's hunger for USD, then snail tails are suddenly "intrinsically valuable"? I agree that intrinsic value is sort of a nebulous thing to begin with, and I'm not convinced that the idea even makes sense to at all (as you've suggested), but your definition just seems confusing at best, and perhaps even useless (though if it's useful to you…

>If I have a comparable amount of confidence in my snail tail guy as I do in the USG's hunger for USD, then snail tails are suddenly "intrinsically valuable"?

According to the definition I gave, yes. If you're thinking of 'instrinsic value' as meaning 'absolute value', then yes it's just as absurd to say snail tails have intrinsic value as it is to say anything else has intrinsic value. It certainly sounds absurd to say "snail tails have intrinsic value" for any definition of "intrinsic value", but then, it's absurd to be as certain some guy is going to trade snail tails for water as you are that dollars will buy you freedom from prosecution for non-payment of taxes.

>but your definition just seems confusing at best, and perhaps even useless (though if it's useful to you, then have at it).

Ya, I have no idea if it's useful or not. There are certainly people who are suspicious of using goods as currencies if they don't have 'intrinsic value', according to that definition. I don't know if that suspicion is well placed or not, but it is there.

Re: Why Bitcoin Matters

#115

Post by sigil »

maaku wrote: post #107
sigil wrote: post #80

Bitcoin is the first practical solution to a longstanding problem in computer science called the Byzantine Generals Problem. Wait, isn't Paxos arguably the first practical solution to BGP? [0] [1] It's been in production use at Google since at least 2006. [2] Furthermore, Paxos actually has a proof that timely consensus will be reached. Do we have the same level of rock-solid mathematical certainty about Bitcoin yet?…

> but AFAIK there is no rigorous proof yet that the selfish mining equilibrium isn't a real threat. It's very easy to detect and respond to. Point your miners at the large pools, and check if they are building off of non-public blocks. Respond accordingly.

How do you know they're building off of non-public blocks if they're doing so in secret collusion?

For what it's worth, Felten et al have a somewhat convincing (if not yet rigorous) argument that members of a so-called selfish mining pool have more incentive to defect than to continue cheating [0]. But, if a single entity controlled all of the 33%, defection is not a risk, and this entity could still claim an outsized share of the mining reward according to Eyal-Sirer.

[0] https://news.ycombinator.com/item?id=6689329

Re: Why Bitcoin Matters

#116

Post by interstitial »

ye wrote: post #63
pyvpx wrote: post #46

Earlier quoted context omitted.

does bitcoin have an intrinsic value? if so, what?

Does dollar have an intrinsic value? Actually, can you even define "intrinsic value" without going in circles or defining it simply as current value?

The dollar's value comes from the barrel of gun. I thought that was plain enough. Bitcoins not so much.

Re: Why Bitcoin Matters

#117

Post by smtddr »

atmosx wrote: post #98
ye wrote: post #36

Earlier quoted context omitted.

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

> [...] But once Bitcoin penetration is significant [...] I think we passed that point, there is an adoption of bitcoin, but it will NEVER be used as a currency IMHO. I really hope the price stops fluctuating so we can use it as a value storage medium, but even that can be disputed.

This might be me being hyper-pedantic, but I'd argue that not even USD is a particularly good store of value. If you have a significant amount of money it should probably be in at least low-risk stocks or re-estate. Not just sitting in a regular savings account in a regular bank.

But, I do get the point that at least the USD dollar doesn't lose/gain 50% value in a few hours by wild speculation every month.

Re: Why Bitcoin Matters

#118

Post by VMG »

sigil wrote: post #113
hendzen wrote: post #105

Earlier quoted context omitted.

No, Paxos is not a solution to BGP. Paxos explicitly does not consider malicious processes. EDIT: fixed typo

Paxos is Byzantine Fault Tolerant. A malicious node is a special case of failed node. "The objective of Byzantine fault tolerance is to be able to defend against Byzantine failures, in which components of a system fail in arbitrary ways (i.e., not just by stopping or crashing but by processing requests incorrectly, corrupting their local state, and/or producing incorrect or inconsistent outputs)." http://en.wikipedia…

This is what I found about it:

> The bitcoin system is based around the "block chain", whose main purpose is to implement a distributed timestamp. With a known set of participants, this is a solved problem (Paxos algorithm); on the public Internet with undefined participant list, it's hard.

http://www.baum.com.au/~jiri/ae/blog/01306143707

Re: Why Bitcoin Matters

#119

Post by VMG »

riemannzeta wrote: post #112
candybar wrote: post #5

The part about bitcoin entirely as a payment system makes no sense, because both the consumer and the merchant need an existing payment system, to convert into and out of bitcoin for this to work, in which case bitcoin is just a middleman doing no work. I suppose some payment systems are localized and bitcoin can work as a global bridge, but that seems like a trivial legal hack that will be shut down soon.

This is my issue with A16Z's claim also. So Bitcoin eliminates one of the failure modes of digital transactions -- namely, confirming that a particular ID indeed is associated with a particular account value -- in a way that avoids the need for intermediaries. That's great, but that's not the most important failure mode, and only part of what is needed to solve the Byzantine Generals' Problem. The generals need not o…

Bitcoin allows for 2-out-of-3 (theoretically also m-out-of-n) transactions. Buyer and seller can agree on an mediator for dispute settlement.

https://www.bitrated.com/

Re: Why Bitcoin Matters

#120

Post by drcode »

galactus wrote: post #108
drcode wrote: post #99

Earlier quoted context omitted.

I run a bitcoin ecommerce site without converting to fiat. Just because Overstock wants to pay additional overhead doesn't mean everyone else has to.

If you were paying taxes or employees like overstock does you'd have to convert to fiat, wouldnt you?

Sure, you'd either have to convert part of it to fiat for taxes, or carry a currency risk and pay the taxes separately (as I do.)

In the future, you'll probably be able to pay your expenses in bitcoin and then the issue becomes moot (you use your bitcoin earnings for expenses and your fiat earnings for taxes.)

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