Ask Amir Taaki About Bitcoin 768
"Bitcoin," says the project's website, "is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions." Wikipedia offers a readable explanation of the underlying technology. In (very) short, Bitcoin uses a distributed database and public key encryption to allow users to reassign ownership of units of Bitcoin currency (BTC), and does so in a way that can keep the user's identity private. Bitcoin isn't yet accepted the way credit cards are, but it's more than theoretical. You can buy (some) things with Bitcoin, and trade the currency itself.
Now, you can ask question about Bitcoin of Amir Taaki, a developer of client interfaces and stock trading software for Bitcoin, and owner and operator of trading exchange Britcoin.co.uk. Amir requests that questions focus not "so much on the mining (too many people get focused on that
when it's a minor aspect of Bitcoin) nor simple technical questions (people can
go find that info themselves on Wikipedia/the forums/sourcecode)," but rather on the harder-to-answer questions. Reading some of the related stories listed below may give you ideas on what those are. Standard Slashdot Interview rules apply: ask as many questions as you want, but please keep them to one per comment. Amir will get back with his answers.
Bitcoin (Score:5, Interesting)
This all works wonderfully for the people who have the financial understanding of markets and such schemes. Geeks generally do not. All they see is this program that they can use to make money with their hardware. They forget that all the traditional pump and dump schemes and others still apply. Actually not only do they apply, they're safe to pull of with Bitcoin because it's legal, the market is really vulnerable to it and most people using it do not understand what is happening. Those who trade stocks or forex generally have even some understanding of how the market works. Bitcoin users generally do not, as they're just normal users.
Is the gold rush over? (Score:5, Interesting)
With BitCoin limited to a pre-determined amount and the difficulty of mining new BitCoins, it seems that this gives a huge advantage to people who got into BitCoin early and have already amassed a considerable amount of BitCoins. Is this true and, if so, do you think this disincentive will undermine BitCoin's ability to become more popular since the majority of the population will have to work so much harder to obtain the currency?
Quantum Computing? (Score:5, Interesting)
Are there plans to deal with quantum computing, or with any of the algorithms used being compromised?
I understand that the hashes wouldn't be terribly devastating for Bitcoin -- worst case, I would think, you roll the entire network back to a snapshot of the transaction history before the first quantum computer started screwing stuff up, and start using a new hashing algorithm. It'd be very bad, but not catastrophic.
But for actual accounts, it looks like we rely on ECDSA -- and it looks like even if Bitcoin offers a quantum-ready algorithm, my wallet is still likely compromised unless I move everything to it before the first viable quantum computer. Still, there doesn't seem to be much noise about this other than a few forum posts, largely dismissed by saying things like "DWave is vaporware."
Re:Is the gold rush over? (Score:5, Interesting)
at this point it's not even worth mining for it. i looked at the exchange rates to real money and by the time you invest in a dual GPU system and pay the electric bills you don't make any profit
Re:Is the gold rush over? (Score:5, Interesting)
That was the point...BitCoin is great for people who got in early and mined a lot. But for everyone else, adopting it means essentially giving those early adopters stuff for free.
Aspirations (Score:4, Interesting)
My question is, what are your aspirations for the currency. Do you hope for it to be near-ubiquitous -- used by corner shops and mainstream merchants like Amazon? Or are you happy to see a parallel economy grow, as a niche thing? Or something else?
Re:Bitcoin (Score:4, Interesting)
mmm, anyone who puts money they can't afford to lose into bitcoin is an idiot. Bitcoins do not have intrinsic value, they do not have tax value and they do not have any gauranteed exchange rate to anything else. If everyone decides to cash out then the value of bitcoins could drop through the floor very quickly.
That doesn't mean bitcoin doesn't have it's uses. They provide a way to make transactions without government interference and they previously provided a way of making small transactions without the high fees of things like paypal and international bank transfers (unfortunaly the current high value of bitcoins means that under current transaction fee rules this is getting less true).
Lost/forgotten bitcoins (Score:3, Interesting)
Convince me it's not a Ponzi scheme (Score:5, Interesting)
Convince me it's not a Ponzi scheme.
The BitCoin ecosystem is composed of very flaky entities. The biggest "exchange", Mt. Gox, seems to be one person reachable only on IRC. They're a depository institution, and people have substantial balances with them. Not only are they not regulated, they don't even seem to have a business address.
The "exchanges" all seem to transfer funds in and out through even flakier services, like Liberty Reserve (somewhere in Costa Rica) and Dwolla (run out of a hackerspace in Des Moines). Neither is registered as a money transfer agency. What we're not seeing is some bank in Switzerland or Luxembourg, handling Bitcoins.
All these organizations are acting as depository institutions without a license to do so. None of them guarantees contractually that they will pay out funds within a set time. All are uninsured and unaudited. Most of them seem to be having some problems delivering cash lately now that there's been a crash in Bitcoins.
On top of this, the whole Bitcoin system is set up like a Ponzi scheme, where there's an advantage to getting in early.
It's probably already too late to get in, and it may be too late to get out.
Extreme instability of Bitcoin vs. USD (Score:5, Interesting)
What about the lack of inflation? (Score:5, Interesting)
What about the lack of inflation?
It's long known that economic growth is severely stunted without some measure of inflation. Adopting bitcoins for the global economy would mean that policymakers lose control on money supply, and while there are advantages in this, disadvantages far outweigh them. Additionally, adopting a global currency standard will deny governments ability to influence currency rates robbing them of yet another way to control the economy.
Is there any plan to solve this? Maybe a system of independent bitcoin 'roots' operated by governments would help?
Re:Bitcoin (Score:5, Interesting)
Isn't that true for most currencies? You know, being off the gold standard and all that. I'm not saying it's a good thing - I just note it.
The value of gold on the free market is also far above the intrinsic value - if fewer people saw gold *purely as a medium of wealth storage* then the value would plummet. Gold is in fact very like a fiat currency, right down to the production and distribution being controlled and manipulated by just a few big players, so its not as if the supply of it is constant or finite. It's not quite as vulnerable as a fiat currency to devaluation, but it is still only as valuable as people think it is.
Bitcoin is an interesting idea, in that it tries to provide a finite supply of coins (once the initial period of production is over) which will mean it cannot be devalued by issuing more - that would make it an ideal currency for a government and/or a public which valued fiscal responsibility. Unfortunately no-one does.
Re:Yet another advertisement (Score:5, Interesting)