The Bubbly Bitcoin Thread -- Merged Threads

[GeordieAndy]

The source code is open. Don't you think that devs would notice such things?

Flaws in hashing algorithms are largely about clashes/non-unique values, afaik. No amount of NSA magic is going to change that.

Google employees also created the BitcoinJ libraries, which many Android devices used. They are also open source.

Still, if you fear it, you can continue to use cash or bars/coins of physical gold. However, if your alternative is using the existing banking system, which is opaque and under total state control, a compromised Bitcoin would be a big step forward either way (although I suspect your fears are unfounded).

Just because the source code is open doesn't mean people will actually spot issues in it and / or aren't paid / threatened to keep quiet. I think people mistakenly think of open source = 100% secure these days which unless you are a programmer of sufficient competence to analyse all the code yourself then how can you ever be sure?

Also the above doesn't address that fact that the transmitting of the BTC data, withdrawing / adding funds etc is not as safe as secure as people would have you believe not to mention the internet as a whole has been shown to be compromised from the fibre optic cable / hardware level up recently.

Please don't mistake my critical / alternative thinking as me rubbishing BTC / LTC / otherC etc as I have taken a punt with some myself but also don't kid yourself that those in real power don't have some stake at the table that you can't even comprehend... yet

[Bloo Loo]

Ouch for those who have 'lost' their coins but truly fascinating seeing how people are stopping the thief cashing out

http://www.newstates...watch-real-time

Interesting....specially the bit about tumblers splitting coins up and presenting the pieces back to the wallets....thus trying to launder the things.

Of course, this makes the most valuable and unique selling point for the cryptos,....the chain of transactions....just about worthless.

Crypto currencies are like public transport...provided for the transmission of knowledge...in the case of a currency, the transmission of wealth between entities by a representation agreed between the parties...the thing about cryptos is that the block chain can contain knowledge in public of the transaction between the parties, a proof of contract, a sale of knowledge..whatever.

Splitting this transaction amongst thousands of different sub coins is going to remove this feature...indeed, as the coins are "deflated" out into the future, any useful information is going to have to be at Satoshi level if it is to be of any use at all.

current coins seem to be similar to a fleet of 10,000,000 buses for everyone to use....finding your journey again amongst those 10,000,000 later is going to be like finding a needle in a haystack....and thats just 1 coin.

[Traktion]

Just because the source code is open doesn't mean people will actually spot issues in it and / or aren't paid / threatened to keep quiet. I think people mistakenly think of open source = 100% secure these days which unless you are a programmer of sufficient competence to analyse all the code yourself then how can you ever be sure?

Also the above doesn't address that fact that the transmitting of the BTC data, withdrawing / adding funds etc is not as safe as secure as people would have you believe not to mention the internet as a whole has been shown to be compromised from the fibre optic cable / hardware level up recently.

Please don't mistake my critical / alternative thinking as me rubbishing BTC / LTC / otherC etc as I have taken a punt with some myself but also don't kid yourself that those in real power don't have some stake at the table that you can't even comprehend... yet

There are plenty of people pawing through the code on a regular basis. Sure, there is a chance that it is all a conspiracy and those who know are paid off and those who don't know are left unaware. However, I find it highly doubtful, considering that hackers are looking for the very same back doors to exploit the network too.

If you're encrypting data above the hardware, it doesn't matter what they snoop on - they won't be able to make sense of it either way, unless they can decrypt it again.

There is a place for critical thinking, but it is easy to be fantastical. If the state starts to use Bitcoin as a method of control, people will seek alternatives for the same reasons they sought Bitcoin. Much of Bitcoin's value is based on its distributed/open nature and its political neutrality - changing this will diminish the demand for it and alternatives will present themselves.

[Traktion]

You're not addressing the idea that all this tech development of digital, and 'open', currencies will be beneficial to Governments.

Governments already control the closed national currency banking system. Even if they gain full control of Bitcoin (which I highly doubt), we will only have returned to the status-quo.

Until the state bans trading, there will always be alternative monies, even if it bans cash. It could also do the latter, whether Bitcoin is a success or not.

[Traktion]

Interesting....specially the bit about tumblers splitting coins up and presenting the pieces back to the wallets....thus trying to launder the things.

Of course, this makes the most valuable and unique selling point for the cryptos,....the chain of transactions....just about worthless.

Crypto currencies are like public transport...provided for the transmission of knowledge...in the case of a currency, the transmission of wealth between entities by a representation agreed between the parties...the thing about cryptos is that the block chain can contain knowledge in public of the transaction between the parties, a proof of contract, a sale of knowledge..whatever.

Splitting this transaction amongst thousands of different sub coins is going to remove this feature...indeed, as the coins are "deflated" out into the future, any useful information is going to have to be at Satoshi level if it is to be of any use at all.

current coins seem to be similar to a fleet of 10,000,000 buses for everyone to use....finding your journey again amongst those 10,000,000 later is going to be like finding a needle in a haystack....and thats just 1 coin.

The blockchain is still essential to the mixing process. Without the blockchain, it couldn't even occur.

You don't have to mix them, if you want to make the transaction traceable. That's a different use case altogether, but both require the blockchain still.

[anonguest]

Governments already control the closed national currency banking system. Even if they gain full control of Bitcoin (which I highly doubt), we will only have returned to the status-quo.

Until the state bans trading, there will always be alternative monies, even if it bans cash. It could also do the latter, whether Bitcoin is a success or not.

No. You still don't get it. I am not talking about HM Govt 'taking control' of Bitcoin, although there is nothing I have seen that tells me they couldn't, I am taking about the 'technology' and 'mechanics' of Bitcoin being applied to Pounds, Euros, etc.

The current system, whilst more 'controlled' than ever, is still far from being fully monitorable and controllable - hence the large black market.

I can still spend cash 100% anonymously on whatever I fancy in the high street. In a world where the money has become Bitcoin like in operation, then everything I do with my money will be recorded. Tax evasion would be 100% impossible.

[Traktion]

No. You still don't get it. I am not talking about HM Govt 'taking control' of Bitcoin, although there is nothing I have seen that tells me they couldn't, I am taking about the 'technology' and 'mechanics' of Bitcoin being applied to Pounds, Euros, etc.

The current system, whilst more 'controlled' than ever, is still far from being fully monitorable and controllable - hence the large black market.

I can still spend cash 100% anonymously on whatever I fancy in the high street. In a world where the money has become Bitcoin like in operation, then everything I do with my money will be recorded. Tax evasion would be 100% impossible.

Everything you do is recorded through the national monetary systems already. You can't even open an account without attaching your identity to it.

Bitcoin being available doesn't mean cash becomes unavailable. That is a totally different issue and no one is forcing you to use Bitcoin instead of cash over the counter - its primary strength is avoiding the highly monitored national monetary system, which is already heavily used.

[bomberbrown]

Forgive me if this has already been discussed already (can't face 80 pages) but how is this any different from the tulip bubble? I have done a bit of research till my head hurts (and I work in IT) I googled the graph and it just feels like a bubble/mania to me.

http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv

With the tulip mania, you were at least left holding a tangiable asset.

[anonguest]

Everything you do is recorded through the national monetary systems already. You can't even open an account without attaching your identity to it.

Bitcoin being available doesn't mean cash becomes unavailable. That is a totally different issue and no one is forcing you to use Bitcoin instead of cash over the counter - its primary strength is avoiding the highly monitored national monetary system, which is already heavily used.

Really!?

Yes non-cash transactions are recorded, but they ar estill proprietary data of the banks - and HM Govt must go through due process to obtain such data relating to a customers activities. Pure cash transactions remain hidden. Hence why there continues to be an ongoing idealogical war waged by TPTB against the masses using cash.

I realise that in a world where currency becomes Bitcoin-like in nature there could still be 'cash'. The difference being that my purchases today, here and now, are 100% anonymous. No one will know IF I had just now gone down the road to take out £100 from a cashpoint and then buy a load of womens lingerie in a shop in the high street. In a world where the money is all electronic and transactions publicly 'open' to inspection my secret will be out! AND TPTB will not need any special powers to access that info.

Or have I still not understood things properly?

[goldbug9999]

No. You still don't get it. I am not talking about HM Govt 'taking control' of Bitcoin, although there is nothing I have seen that tells me they couldn't, I am taking about the 'technology' and 'mechanics' of Bitcoin being applied to Pounds, Euros, etc.

The current system, whilst more 'controlled' than ever, is still far from being fully monitorable and controllable - hence the large black market.

The current finance system has much to lose than it would gain by such transparency on transactions so I just cant see why they would be interested since most of the "crime" occurs inside the system rather then outside.

I can still spend cash 100% anonymously on whatever I fancy in the high street. In a world where the money has become Bitcoin like in operation, then everything I do with my money will be recorded. Tax evasion would be 100% impossible.

Bitcoin transactions can only be linked to you if someone can trace your wallet address to your personal identity, its a bit like a swiss numbered account in the "good old days".

Edited December 3, 2013 by goldbug9999

[goldbug9999]

Just because the source code is open doesn't mean people will actually spot issues in it and / or aren't paid / threatened to keep quiet. I think people mistakenly think of open source = 100% secure these days which unless you are a programmer of sufficient competence to analyse all the code yourself then how can you ever be sure?

Open source systems tend to be more secure than closed system precisely because everyone can see exactly how it works hence flaws tends to get exposed and then fixed much more quickly. Also there tends to be a "benevolent crowd" effect where vastly more brain power gets expended on making things work than on trying to exploit flaws - there is probably thousands of time more brain power available to improve something like bitcoin than any corporation government or agency could realistically bring to bear on trying to undermine it.

[anonguest]

Bitcoin transactions can only be linked to you if someone knows your wallet address.

I referring to a future world where Pounds, Euros, etc become digital, like Bitcoin - and everyone would be assigned a 'wallet' at Birth, just like a NI number.

THEN....there would be no way to hide ones money related activity?

I accept the point you make about most money 'crime' occurring within being significant if true - do you have data to back up that assertion?

[Bloo Loo]

Open source systems tend to be more secure than closed system precisely because everyone can see exactly how it works hence flaws tends to get exposed and then fixed much more quickly. Also there tends to be a "benevolent crowd" effect where vastly more brain power gets expended on making things work than on trying to exploit flaws - there is probably thousands of time more brain power available to improve something like bitcoin than any corporation government or agency could realistically bring to bear on trying to undermine it.

just a thought, but Windows, whilst closed source, had an awful lot of brainpower going in to make it more useful...so much so, it became the de facto OS of the World....then the other brainpower set about making all the useful features a vulnerability for profit, vanity and sheer cussedness.

[Traktion]

Really!?

Yes non-cash transactions are recorded, but they ar estill proprietary data of the banks - and HM Govt must go through due process to obtain such data relating to a customers activities. Pure cash transactions remain hidden. Hence why there continues to be an ongoing idealogical war waged by TPTB against the masses using cash.

Pure cash transactions will remain outside of the reach of the state, but don't for a minute think that the state will not get the banks to report suspicious behaviour. Even cash in note form have serial numbers which can be tracked.

Moreover, the state controls the "independent" central bank, which coordinates the clearing and settlement of accounts between the banks. The central bank operates as the blockchain, in Bitcoin speak.

I realise that in a world where currency becomes Bitcoin-like in nature there could still be 'cash'. The difference being that my purchases today, here and now, are 100% anonymous. No one will know IF I had just now gone down the road to take out £100 from a cashpoint and then buy a load of womens lingerie in a shop in the high street. In a world where the money is all electronic and transactions publicly 'open' to inspection my secret will be out! AND TPTB will not need any special powers to access that info.

Or have I still not understood things properly?

Users of Bitcoin can hide their traces in a number of ways for all but huge sums of money (relative to the Bitcoin market cap). If you tried to withdraw $60m in cash, there would be many questions asked - try withdrawing even £10k and they will ask why you want it, what you will be buying, will record/flag the withdrawal on their system etc.

Furthermore, there are technologies which can make the transfer of Bitcoins more anonymous. The Zerocoin algorithm is said to be cryptographically impossible to trace, despite the blockchain knowing that coins have moved from one address to another (essentially there is a period in the middle where they become 'no-ones' as far as the blockchain is concerned, afaik). CoinJoin and mixers in Bitcoin also achieve a high degree of anonymity for all but huge sums of money too.

Yes, the state may try to water down Bitcoin. They may try to make it so they can trace and track every transaction. They may make it law that you have to use a specific address or face jail time. They may make it illegal to transact in cash. They may make barter punishable by death. Ultimately, if people don't agree with the motivation behind such laws, they will not abide by them.

Bitcoin was born very much out of an expression of disagreement with the state monetary system and while there are tyrannical governments, there will now be strong cryptocurrencies. I suspect there will be an arms race between cryptocurrencies and the states ability to track/destroy them, but technology is on the side of the former - it is many magnitudes harder to decrypt than encrypt data (using private key encryption), even when those decrypting have the entire tax revenue at their disposal. It is a massively asymmetric battle, where the individual has more power than the combined power of all their foes. That is one of the reasons why distributed cryptocurrencies are such a game changer.

[goldbug9999]

just a thought, but Windows, whilst closed source, had an awful lot of brainpower going in to make it more useful...so much so, it became the de facto OS of the World....then the other brainpower set about making all the useful features a vulnerability for profit, vanity and sheer cussedness.

This isn't a discussion about whether closed software can be good because obviously it can be, although windows is actually poor example because it was utterly shite for the first 5 years of its existence and distinctly ropey for the next 5, infact windows 7 was the first version that had anything close to the stability of linux. Its dominant position has nothing to do with how good it was and everything to do with microsofts position in the market at the time.

Windows is actually great example of how insecure closed systems can be.

[happy_renting]

Forgive me if this has already been discussed already (can't face 80 pages) but how is this any different from the tulip bubble? I have done a bit of research till my head hurts (and I work in IT) I googled the graph and it just feels like a bubble/mania to me.

http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv

With the tulip mania, you were at least left holding a tangiable asset.

Much of the tulip bulb legend is apparently apocryphal.

Very few tulips actually changed hands, and the the stories of some prices paid are unverified and from a limited range of ambiguous documentary sources.

What happened with the tulip bubble is that a futures market evolved, with the government making it legal to cancel the contracts for a relatively small fee.

As a result, people bet on the price rising, ready to take the profits, safe in the knowledge that they could walk away from the contracts with little penalty if the price did not rise, or fell. It was this aspect that created the bubble. When the bubble burst, people walked away from the contracts rather than take a loss.

[happy_renting]

Pure cash transactions will remain outside of the reach of the state, but don't for a minute think that the state will not get the banks to report suspicious behaviour. Even cash in note form have serial numbers which can be tracked.

Moreover, the state controls the "independent" central bank, which coordinates the clearing and settlement of accounts between the banks. The central bank operates as the blockchain, in Bitcoin speak.

Users of Bitcoin can hide their traces in a number of ways for all but huge sums of money (relative to the Bitcoin market cap). If you tried to withdraw $60m in cash, there would be many questions asked - try withdrawing even £10k and they will ask why you want it, what you will be buying, will record/flag the withdrawal on their system etc.

Furthermore, there are technologies which can make the transfer of Bitcoins more anonymous. The Zerocoin algorithm is said to be cryptographically impossible to trace, despite the blockchain knowing that coins have moved from one address to another (essentially there is a period in the middle where they become 'no-ones' as far as the blockchain is concerned, afaik). CoinJoin and mixers in Bitcoin also achieve a high degree of anonymity for all but huge sums of money too.

Yes, the state may try to water down Bitcoin. They may try to make it so they can trace and track every transaction. They may make it law that you have to use a specific address or face jail time. They may make it illegal to transact in cash. They may make barter punishable by death. Ultimately, if people don't agree with the motivation behind such laws, they will not abide by them.

Bitcoin was born very much out of an expression of disagreement with the state monetary system and while there are tyrannical governments, there will now be strong cryptocurrencies. I suspect there will be an arms race between cryptocurrencies and the states ability to track/destroy them, but technology is on the side of the former - it is many magnitudes harder to decrypt than encrypt data (using private key encryption), even when those decrypting have the entire tax revenue at their disposal. It is a massively asymmetric battle, where the individual has more power than the combined power of all their foes. That is one of the reasons why distributed cryptocurrencies are such a game changer.

On the matter of governments supposedly cracking public key encryption, for a vast number of bitcoin transactions, it amuses me that some people thing that governments have supercomputers lying around unused to do this.

The hugely expensive government supercomputers are built and operated for other purposes, and those other purposes are implicitly important otherwise the government would not spend millions building the things.

It's not the case of people operating the things saying "what shall we do today with this machine? Model nuclear reactions? Weather systems? Deal with national security? - I know, lets spend all day cracking Bitcoin public/private keys, and mine a few million of them for the craic."

[Bloo Loo]

This isn't a discussion about whether closed software can be good because obviously it can be, although windows is actually poor example because it was utterly shite for the first 5 years of its existence and distinctly ropey for the next 5, infact windows 7 was the first version that had anything close to the stability of linux. Its dominant position has nothing to do with how good it was and everything to do with microsofts position in the market at the time.

Windows is actually great example of how insecure closed systems can be.

straight over your head it seems

You were discussing the brainpower used to make crypto currencies secure, safe and easy to use...I was pointing out that same brainpower will be used to make sure it is not safe, stealable and require much extra effort to secure your stash, as was the case with Windows.

Stability, closed/open, Linux, IOS, whatever straw man you can think of is irrelevant.

[goldbug9999]

You were discussing the brainpower used to make crypto currencies secure, safe and easy to use...I was pointing out that same brainpower will be used to make sure it is not safe, stealable and require much extra effort to secure your stash, as was the case with Windows.

This just reinforces my argument - MS couldn't keep up because its limited resource pool was overwhelmed. Open source projects don't have that problem.

[tomandlu]

Forgive me if this has already been discussed already (can't face 80 pages) but how is this any different from the tulip bubble? I have done a bit of research till my head hurts (and I work in IT) I googled the graph and it just feels like a bubble/mania to me.

http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv

With the tulip mania, you were at least left holding a tangiable asset.

It depends. If it takes off as a currency, then it's not a bubble, since a single bitcoin will end up having a value well over a million pounds. Some, including myself, think that's a pretty good reason why it'll never take off (in which case it's a bubble).

[Bloo Loo]

This just reinforces my argument - MS couldn't keep up because its limited resource pool was overwhelmed. Open source projects don't have that problem.

Im talking about the brains trying to find the weakness...not the people on the inside, or in this case, inside the code for good purposes.

[goldbug9999]

It depends. If it takes off as a currency, then it's not a bubble, since a single bitcoin will end up having a value well over a million pounds. Some, including myself, think that's a pretty good reason why it'll never take off (in which case it's a bubble).

So how does the idea that 1 BTC might be worth £nnnn, where nnnn is some large number of your choice, martially affect its chances of success ?.

[Bloo Loo]

So how does the idea that 1 BTC might be worth £nnnn, where nnnn is some large number of your choice, martially affect its chances of success ?.

because exchangers like bitpay will go out of business like a light making trading impossible.

[happy_renting]

because exchangers like bitpay will go out of business like a light making trading impossible.

Well Bitcoin has worked at 1c, 10c, $1, $10, $100 and $1000. The exchanges are growing in popularity. So why would $1m be different?

[Pindar]

just a thought, but Windows, whilst closed source, had an awful lot of brainpower going in to make it more useful...so much so, it became the de facto OS of the World....then the other brainpower set about making all the useful features a vulnerability for profit, vanity and sheer cussedness.

You hit the nail on the head there. Open sores and free (free like free speech not free beer) software is all very well until it becomes a political tool, founded on the vendetta that a few people had against their former employers. There are some who are so fanatical about it, they attempt to force everybody else to work by their model, because they're in an intellectual position to do so. While there are numerous benefits to sharing effort in producing something useful, it does make you wonder, what if car makers, tradesmen and other workers started giving stuff away and publishing the instructions on how to make them - would anybody ever get paid and would there continue to even be a need for payment? We can surmise that if the people paying with and accepting bitcoin were to be required to apply the same principles to everything else in their lives, they might not be so smug.

Edited December 3, 2013 by Pindar