BitCoin, the Most Dangerous Project Ever? 858
Jamie found a followup to the bitcoin story we've been following awhile. The article talks about the untraceable, un-hackable nature of BitCoin. They can't be locked down like PayPal, and the article predicts that governments will start banning them in the next 18 months.
Tabloid trash (Score:5, Insightful)
Written by a used car salesman? (Score:4, Insightful)
TFA reads more like an advertisement for BitCoins than an news article.
Uncontrollable global bazaars for contraband... (Score:5, Insightful)
I hate to tell you this, but this has already happened with regular-government issued legal tender.
Look at druglord Mexico, most 3rd-world countries, and the US with its billion-dollar Wall Street bailouts and ponzi schemes. Bitcoin would be a little late to the game.
Yours for 3 easy payments of $19.95 (Score:5, Insightful)
Huh? (Score:4, Insightful)
How does "cannot be tracked" come from something in which:
It's been a while since I did anything in crypto ... but if you can verify the signatures, and they're now attached to the coin ... can you just confirm the signatures without knowing who signed it? If it's been signed with my public key, don't you need my public key to verify it?
It seems like either it's traceable, because you can see everyone who has ever held a given set of coins ... or it's not trustworthy because all you have is a signature which you don't necessarily trust because you have no idea where it came from, but you trust the cyrpto.
This sounds like getting cash that has a record of everywhere it's ever been, but maybe I'm missing something here. Won't these 'coins' get large over time as they keep getting signed and passed on? (And the amount of verification needed would get quite long, no?)
I don't think I'm all that interested in a virtual currency whose major benefit is that I can buy escorts and drugs on-line without anybody being able to trace it ... it just seems like there's more motivation for fraud in a system like this. And, it seems like something which is going to start coming under a lot of scrutiny.
I'm just not getting what need this is intended to fill ... and I'm not sure I understand how it's simultaneously untraceable and secure.
Re:Tabloid trash (Score:4, Insightful)
I think the issue was more with the fact that the person was trying to pass these coins off as legal tender.
Re:Untraceable? (Score:5, Insightful)
I believe they mean it is peer-to-peer, so there is no middleman, unlike something like PayPal where PayPal is the middleman, so it can't be traced unless you are there. In addition, if it doesn't save the "from" source after the transaction, there is no way to tell where the money came from.
Seems like it would make money laundering and tax evasion easy. Of course, there is an easy way to fix that as far as drugs go - make all drugs legal and tax them, then spend the money that went into enforcement on education (like Portugal did).
Re:Tabloid trash (Score:4, Insightful)
Remember the "precedent" where record companies had exclusive rights to distribute recorded music?
The Congress is about to discover the same lesson regarding technology that refuses to be regulated.
I think it is just more attenion whoring (Score:5, Insightful)
The Bitcoin proponents seem to think this is some really amazing idea that is like Cryptonomicron come to life and think everyone else should get on board. The rest of the world thinks bitcoins are retarded and doesn't use them.
To me this seems like just more hype, but trying to go at it from a scare part: "Oh these things are so amazing and dangerous that the government will ban them!" Trying to play on people's love for things forbidden.
Of course it is also rife with problems, one of the biggest being the whole deflation thing. Deflation is something that strangles an economy badly. People want to spend as little as possible, since you get more for the same money in the future, which of course means there is little spending and little spending means little trade which means the economy goes to shit.
Anyone who is in love the idea of deflation because "My money will be worth more," need to go retake ECON 201 and learn what money really is and why we have it.
Any current that has built in deflation is a really. really, bad idea.
How does it actually work? (Score:5, Insightful)
Why is it that every explanation of bit coin, including your attempt, is incoherent. Given it can't be explained I think it's a scam.
I have many questions in part because the basic schema is not clear. I've watched the videos and read the sites. But there just is no explanation that makes a whole coherent sum and there are contradictions when you piece the various explanations together.
1) On a torrent network, not every node knows where all the slices are. Not all nodes are in communication. Thus what happens if I sent 30 bit coins to Amy and then I sent the exact digital copy of those coins to Brad who is on a network remote from Amy. It sounds like Amy will query the local network to see if I own the coins and so will Brad. But because those queries never intersect on the same node both appear to be valid when in fact I just copied the money. Later on perhaps the system can't reconcile two people owning the same coins but by then I'm gone.
2) Suppose I send money to Alice. then a fraction of a second later Alice tries to send the same Money to Bob. How does Bob determine that Amy owns the coins? No node on BoB's network can validate my transfer to Alice.
3) the description has this trail of signed hashes being appended. Does this grow forever and can it be inverted to follow the money?
4) is each coin signed? or is it transactions?
5) if someone invents a way to make coins cheaply does this doom the system? What regulates the produciton rate? does this work if I have 1 million different user identities? if there is a central signing authority for this then what keeps this from getting cracked or printing their own money to flood the system?
6) what happens if botnets start mining?
how does this actually work, end to end, technically not operationally?
Alt $$ (Score:2, Insightful)
Bitcoin is a Fad for Libertarians who are Ignorant (Score:5, Insightful)
Re:Tabloid trash (Score:4, Insightful)
That depends solely on its adoption and acceptance. If everyone accepts bitcoin, it becomes a currency implicitly and intrinsically. One that has no central authority that can be controlled.
In that scenario, it literally wrests control of currency away from the government and banks. Neither the government nor the banks like that very much. Conspiracy theorists will tell you that Kennedy was assassinated for the executive order that would have ended The Fed. In other words, wresting control of US currency away from the banks got Kennedy killed. You can actually disbelieve that if you like, and it won't matter. I'm skeptical of it myself. But again, it doesn't actually matter.
This article is not sensational. It is true. The last guy who tried to move in on the government/banks' business of currency control was sent to prison for life for doing it. It is U.S. law that nobody else gets to make currency. It is a criminal act. That is a fact. The interesting question is, why? The first order answer is, well you can't have everybody making their own, it's too much of a PITA to exchange, so everybody does need to agree on one. But why did we pick one that is controlled by the US government? Well it was our central authority, obviously, our government should control our currency. The real problem is, it doesn't. The Fed does.
You mean people who believe in democracy, as in of the people, for the people, and by the people? As the recent bank bailout just taught us, the current system is "Of the people, for the wealthy top 2% and by the wealthy top 2%" as secured by vastly greater sums of money (which is used to exert political power). There is no conspiracy, just corruption of government by power. In this instance, that power is wealth. And that wealth is in the form of USD. Bitcoin, if it gained global acceptance would effectively supplant that power, wresting all power from those that are wealthy in USD and give it to those that are wealthy in Bitcoin, which is a distributed currency, with no central authority. Which is the soul of democracy.
Try thinking outside the box next time, it's way more fun, even if it's a bit loony and gets you sent to Gitmo.
Should have been called iTulips (Score:4, Insightful)
http://en.wikipedia.org/wiki/Tulip_mania [wikipedia.org]
Re:Should have been called iTulips (Score:3, Insightful)
http://en.wikipedia.org/wiki/Tulip_mania [wikipedia.org]
This comparisons fails in that Tulips were never truly scarce to begin with. Once traders realized the value in trading or growing Tulips, there was a gap of time in which people wanted more Tulips but the need could not be met, which caused them to rapidly gain value. Since tulips were scarce until more people could finish growing them to be sold. At which point they devalue to the point of nothingness.
This specific type of quick market inflation then crash is, by design, impossible with bitcoins. The supply of bitcoins entering the economy is constant and predictable (about 50 every ten minutes).
Note: I'm not saying that the market couldn't crash or won't crash, I'm just saying if it does, it would be for completely different reasons.
Re:Back on-topic... (Score:5, Insightful)
Bartering is still taxed the same as income in every state I know of, and still counts as income for federal income tax purposes. E.g., if you give me a sheep for fixing your PC, I just had a taxable event at the prevailing market rate for one sheep. This is true whether it's goods or services that are exchanged. It does allow for some wiggle room in your valuation perhaps, but everything's negotiable anyway, so there's not much advantage over bartering. OTOH, it may be a bit easier to get your money back than to get your sheep back when you find out that the grain I exchanged was spoiled. Additionally, being left with a pot full of BitCoins when the music stops is like having a jug full of babysitter tokens -- absolutely worthless if nobody else wants them. The same is true of any fiat currency of course, or even backed currency if the underlying asset becomes worthless. The difference is that the full faith and credit of the US government probably carries a bit more weight than the full faith and credit of an anonymous internet startup. For now, anyway.
Re:Tabloid trash (Score:5, Insightful)
That depends solely on its adoption and acceptance. If everyone accepts bitcoin,
My entire point is that you need to just stop right there. Why would everyone start to accept bitcoin? It's complicated, and it offers zero advantage over federal reserve notes to 99.99% of people.
The rest of your post is a hypothetical scenario that could occur if bitcoin gains acceptance. But I'm not going to grant you that any of your hypothetical will occur until you give at least some semi-plausible scenario where bitcoin might someday gain attention outside the realm of privacy nuts, criminals, and economists.
As the recent bank bailout just taught us, the current system is "Of the people, for the wealthy top 2% and by the wealthy top 2%" as secured by vastly greater sums of money (which is used to exert political power).
Do you have any idea just how much your life would suck right now had it not been for the banking system bailout? I'm not talking about Bill Gates's life; I'm talking about your life. Just read up on previous liquidity crises where the federal government did not step in, and look at what happened to the common man like you and me.
Try thinking outside the box next time, it's way more fun, even if it's a bit loony and gets you sent to Gitmo.
I don't know what the hell you're talking about here, and neither do you.
Re:Dangerous is right! (Score:4, Insightful)
Huh? We've had about a 21x multiple since 1913 and nothing like that since 2003.