That which does not kill Bitcoin makes Bitcoin stronger(blog.tlrobinson.net)
blog.tlrobinson.net
That which does not kill Bitcoin makes Bitcoin stronger
http://blog.tlrobinson.net/that-which-does-not-kill-bitcoin
116 comments
> There's no way cryptography and peer-to-peer consensus protocols will provide verification for goods and services.
Why wouldn't reputation help with this problem? users will have to start small to develop their reputation, but doing so will allow users more trust.
There are ways of doing things that don't involve guns - and that's ultimately what government relies on.
Why wouldn't reputation help with this problem? users will have to start small to develop their reputation, but doing so will allow users more trust.
There are ways of doing things that don't involve guns - and that's ultimately what government relies on.
Trust is always gameable; Madoff got billions by getting people to trust him.
(I thought libertarians were in favour of gun-based dispute resolution systems?)
(I thought libertarians were in favour of gun-based dispute resolution systems?)
It's interesting you used Madoff as an example, because it's precisely the type of situation gmaxwell's proof-of-reserves scheme is designed to solve.
Every social system is gameable. Trust based upon reputation is far far simpler than government. One thing bitcoin gives the world is the blockchain; there has never been a historical record that is free to access and to add records to, but impossible to modify. That's HUGE.
As for libertarians, you clearly don't understand at all. They want to avoid systems of conflict resolution that depend on violence; that's their whole point. Their obsession with trade, contracts and money arise from their view that those are voluntary ways of interacting.
As for libertarians, you clearly don't understand at all. They want to avoid systems of conflict resolution that depend on violence; that's their whole point. Their obsession with trade, contracts and money arise from their view that those are voluntary ways of interacting.
Reputation-based trust is a great starting point, but one big incentive for merchants/service providers to not scam customers is the threat of lawsuits and prosecution by the government.
If a provider can get away with scamming people, without any sort of true repercussions other than a reputation hit, then the rate of "long cons" will probably increase by a lot.
From an anecdotal perspective, I used to be involved in gray markets like trading and selling MMO accounts. Generally there would be no repercussion for scamming the other party; the MMO companies forbade the trade, payment providers don't care, and the government doesn't really recognize it as a real transaction.
These markets had a deeply ingrained reputation system tied to the message board, but escrow was also very common. Many people would offer their services as middlemen to provide escrow for trades, but over time there became an alarmingly high number of middlemen who would properly handle dozens or even hundreds of trades, then scam both parties simultaneously once they came across the biggest transaction of their life. No repercussions came to them; they just stopped being middlemen and had fun with their treasure.
These kinds of examples show that reputation, cryptographic authentication, proof of payment, payment irrevokability, and plain man-in-the-middle escrow combined are still not enough to actually prevent fraud in many cases.
There are some examples of 2-man escrow systems out there using Bitcoin, though, which is far more promising. That prevents any one party from scamming the other 2. The remaining problem, which I imagine will never be solved, is the vendor proving or the buyer disproving that the vendor gave the goods or services that were asked for.
If a provider can get away with scamming people, without any sort of true repercussions other than a reputation hit, then the rate of "long cons" will probably increase by a lot.
From an anecdotal perspective, I used to be involved in gray markets like trading and selling MMO accounts. Generally there would be no repercussion for scamming the other party; the MMO companies forbade the trade, payment providers don't care, and the government doesn't really recognize it as a real transaction.
These markets had a deeply ingrained reputation system tied to the message board, but escrow was also very common. Many people would offer their services as middlemen to provide escrow for trades, but over time there became an alarmingly high number of middlemen who would properly handle dozens or even hundreds of trades, then scam both parties simultaneously once they came across the biggest transaction of their life. No repercussions came to them; they just stopped being middlemen and had fun with their treasure.
These kinds of examples show that reputation, cryptographic authentication, proof of payment, payment irrevokability, and plain man-in-the-middle escrow combined are still not enough to actually prevent fraud in many cases.
There are some examples of 2-man escrow systems out there using Bitcoin, though, which is far more promising. That prevents any one party from scamming the other 2. The remaining problem, which I imagine will never be solved, is the vendor proving or the buyer disproving that the vendor gave the goods or services that were asked for.
"Many people would offer their services as middlemen to provide escrow for trades, but over time there became an alarmingly high number of middlemen who would properly handle dozens or even hundreds of trades, then scam both parties simultaneously once they came across the biggest transaction of their life."
This is impossible with a Bitcoin escrow contracts since 2 of the 3 parties need to agree to unlock the funds, and where to send them.
And this is a perfect example of something that was literally not possible before Bitcoin (well, I suppose it could be done with some elaborate scheme with physical vaults and keys, but certainly not on the internet)
This is impossible with a Bitcoin escrow contracts since 2 of the 3 parties need to agree to unlock the funds, and where to send them.
And this is a perfect example of something that was literally not possible before Bitcoin (well, I suppose it could be done with some elaborate scheme with physical vaults and keys, but certainly not on the internet)
The Great 420 Scam | All Things VICE http://allthingsvice.com/2012/05/30/the-great-420-scam/
Theoretically people weren't supposed to store their bitcoins in an exchange like MtGox either but here we are today with this mess. The bitcoin protocol and best practices suggest a lot of actions that just don't work due to human nature
Theoretically people weren't supposed to store their bitcoins in an exchange like MtGox either but here we are today with this mess. The bitcoin protocol and best practices suggest a lot of actions that just don't work due to human nature
It's not quite impossible - to defeat 2 of 3 signatures, you just have to be 2 of the parties to the transaction. In this case, if I've built a massive reputation as a fair escrow agent, I can then pose as a seller of something(s) expensive. Once the money is escrowed, I release the funds and disappear. Having 2 of 3 signatures for escrow is certainly a better situation, though, presuming it doesn't lead to a false sense of security.
It's not free to add to. It's computationally extremely expensive, that's why miners are compensated.
Mining is wasteful but in principle proof of work can be largely replaced by proof of stake, dramatically lowering the energy costs.
proofofexistence.com is free to use; that's what i meant.
Considering that SEC officials sat on their ass likely watching porn on the job while receiving multiple substantial complaints about Madoff indicates your naive asymmetric idealization involved in hypothetical market failure scenarios while excusing very real actual regulatory failures.
There is no utopia. Deal with it.
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It's the same concept as a credit score, really.
This is exactly it: dispute resolution is hard, and involves untangling real world facts from distant parties some of whom are motivated fraudsters. Credit cards push the work of verifying that the person making a purchase with an account is the person entitled to do so, onto the merchants. Paypal has followed this; its terrible dispute resolution is a big source of complaints.
Bitcoin has no dispute resolution at all. Once a transaction is confirmed, that's it; you have to use some mechanism outside the system to get your money back. People talk about escrow but it's hardly a magic solution.
A corollary of this is that all software handling bitcoin has to be extremely reliable. Not just the client, but anything built on it, such as the entirety of the exchange. Like a pressurised container full of money; if there is any crack or way a hole can be made, it bursts and the money is gone. Even if all the software you've built is fine, any operating system level 0day (cought Apple) will sink you.
Bitcoin has no dispute resolution at all. Once a transaction is confirmed, that's it; you have to use some mechanism outside the system to get your money back. People talk about escrow but it's hardly a magic solution.
A corollary of this is that all software handling bitcoin has to be extremely reliable. Not just the client, but anything built on it, such as the entirety of the exchange. Like a pressurised container full of money; if there is any crack or way a hole can be made, it bursts and the money is gone. Even if all the software you've built is fine, any operating system level 0day (cought Apple) will sink you.
This is mostly irrelevant. Bitcoin "has no" escrow arbitrator in the very same sense that cash (esp physical) has no escrow arbitrator. It's just something you have to layer on top if you want that service, the same way you would for a cash transaction. To the extent that it mimics cash's irreversibility, then of course it inherits the need for third parties when you actually want this kind of reversibility.
(Normally at this point I'm supposed to mention bitcoin's embedded programmable contract system that further facilitates escrow, but I'm worried that bringing it up at the same level would encourage the very same apples-to-oranges comparison I'm trying to get people to stop making!)
(Normally at this point I'm supposed to mention bitcoin's embedded programmable contract system that further facilitates escrow, but I'm worried that bringing it up at the same level would encourage the very same apples-to-oranges comparison I'm trying to get people to stop making!)
In a perfect world, all those problems are solvable with smart contracts, m-of-n transactions, better open-source software and accounting practices, etc.
Of course, we don't live in the perfect world, and all non-trivial software has bugs. Time will tell if "perfect enough" plumbing is achievable, and whether the Bitcoin experiment is sustainable. I think's a worthwhile gamble, on a micro and macro scale, but no one should get involved with Bitcoin without understanding the risks.
Of course, we don't live in the perfect world, and all non-trivial software has bugs. Time will tell if "perfect enough" plumbing is achievable, and whether the Bitcoin experiment is sustainable. I think's a worthwhile gamble, on a micro and macro scale, but no one should get involved with Bitcoin without understanding the risks.
People keep saying smart contracts will help. How does this help "item not delivered" and "item not as described" etc?
Chargebacks can occur through m-of-n transactions. Arbitration becomes a service, with more competition and likely a lower a cost than a credit card's 3%. What's more, it can optionally be eliminated for trusted buyers/sellers (particularly vendors who earn good reputations for returns and customer service).
Smart contracts probably make more sense for pure digital transactions that don't involve tangible goods or services.
Smart contracts probably make more sense for pure digital transactions that don't involve tangible goods or services.
> Like a pressurised container full of money; if there is any crack or way a hole can be made, it bursts and the money is gone.
That is, far and away, the best description of the problem I've heard. Did you come up with it?
That is, far and away, the best description of the problem I've heard. Did you come up with it?
Yes, as I was writing that post.
I'd been considering rocketry analogies, where one software error (Ariane) or bad seal (Challenger) will blow the whole thing up, but I wanted to convey leakiness. Mtgox found a slow puncture and went down like a deflated bouncy castle.
I'd been considering rocketry analogies, where one software error (Ariane) or bad seal (Challenger) will blow the whole thing up, but I wanted to convey leakiness. Mtgox found a slow puncture and went down like a deflated bouncy castle.
It is also like a bubble. A tiny pin prick, and pop! Which is also doubly apt because some consider the market price of bitcoin a bubble.
This can be solved, but it will result in an increased transactional cost.
Right now, proponents of bitcoin like to tout the low transactional costs, compared to traditional payment systems, as a predictor of bitcoins's "impending" success.
Disputes, Chargebacks, etc. are handled now by financial institutions, at a cost to overhead. These financial institutions also have insurance to distribute their risk. If your account is hacked, you file some affadavits and you get your money back.
IF bitcoin were mass adopted, you can be sure that financial organizations that deal in bitcoin will tack on transactional costs relative to the risk of loss - almost like an insurance. In the case of Bitcoin - this is VERY high, unless of course the transactions are done with other financially certified organizations.
Aaaaaaaand we are back at a traditional banking system with transactional costs, but for bitcoins.
Right now, proponents of bitcoin like to tout the low transactional costs, compared to traditional payment systems, as a predictor of bitcoins's "impending" success.
Disputes, Chargebacks, etc. are handled now by financial institutions, at a cost to overhead. These financial institutions also have insurance to distribute their risk. If your account is hacked, you file some affadavits and you get your money back.
IF bitcoin were mass adopted, you can be sure that financial organizations that deal in bitcoin will tack on transactional costs relative to the risk of loss - almost like an insurance. In the case of Bitcoin - this is VERY high, unless of course the transactions are done with other financially certified organizations.
Aaaaaaaand we are back at a traditional banking system with transactional costs, but for bitcoins.
To clarify, cryptocurrencies such as Bitcoin offer not only low transaction costs but also global reach, far faster settlement at distance, and a public ledger. Some systems offer still more features.
Right, but there is zero risk distribution which contributes to the transaction cost differential with other services.
If bitcoin were to become mainstream, the transactional cost would raise because of the overhead with risk deferment.
Cryptocurrencies will definitely become mainstream because of the international and speed factors, but I don't think it will be bitcoin.
If bitcoin were to become mainstream, the transactional cost would raise because of the overhead with risk deferment.
Cryptocurrencies will definitely become mainstream because of the international and speed factors, but I don't think it will be bitcoin.
When you say risk deferment, which type of risk are you discussing specifically?
I see cryptocurrency use as being largely automated and transparent to the consumer in future. I think Bitcoin may have a place, but other more popular systems will provide solutions to many of its more gaping issues (rapid local settlement suitable for point of sale, complexity of implementation, lack of chargeback/cancellation channels, initial counterparty trust bootstrap, reputation management, etc.)
I started having a think about how these might come together over here ... comments/thoughts/collaboration welcome. http://ifex-project.org/
I see cryptocurrency use as being largely automated and transparent to the consumer in future. I think Bitcoin may have a place, but other more popular systems will provide solutions to many of its more gaping issues (rapid local settlement suitable for point of sale, complexity of implementation, lack of chargeback/cancellation channels, initial counterparty trust bootstrap, reputation management, etc.)
I started having a think about how these might come together over here ... comments/thoughts/collaboration welcome. http://ifex-project.org/
> it has pretty good tools of ensuring the expected goods and services flow back to the buyer: chargebacks, courts of law etc.
The existing financial (and legal) system is terrible at enforcing contracts, settling dispute, and establishing credit.
> There's no way cryptography and peer-to-peer consensus protocols will provide verification for goods and services.
Crypto-currency is one of the key pieces needed to build a better system. I strongly believe crypto-contracts are also needed. They give us the instruments to tackle the problems you mentioned. The ethereum white paper (https://github.com/ethereum/wiki/wiki/%5BEnglish%5D-White-Pa...) does a good job at explaining how contract enforcement can be coded into the blockchain.
The existing financial (and legal) system is terrible at enforcing contracts, settling dispute, and establishing credit.
> There's no way cryptography and peer-to-peer consensus protocols will provide verification for goods and services.
Crypto-currency is one of the key pieces needed to build a better system. I strongly believe crypto-contracts are also needed. They give us the instruments to tackle the problems you mentioned. The ethereum white paper (https://github.com/ethereum/wiki/wiki/%5BEnglish%5D-White-Pa...) does a good job at explaining how contract enforcement can be coded into the blockchain.
What? The conventional system is made of contracts, dispute, and credit. We've been doing it for centuries. It's not fraudproof but in western countries is usually very reliable ("high trust society"). Admittedly it's hard to export, or push into areas where the culture is low-trust.
A generous interpretation of the GP's contract is the current system is weighted in favor of the larger players.
>There's no way cryptography and peer-to-peer consensus protocols will provide verification for goods and services
Yes, there is: bit-contract. I forgot where I read about it, but basic idea is very simple: before transaction takes place, both sides make a separate deposit exceeding in size the value of the transaction. After transaction completes, either both sides vote to release the deposits and get their deposit coins back, or one of the parties is so aggrieved, they decide to punish the other party by voting to destroy both deposits. The loser loses twice, but they don't let the perp to get away with it either.
This creates incentive for both sides to strive for mutual satisfaction. Scammers and crazy cranks will run out of money pretty soon. This works really well for small contracts, such as selling an old iPod on Ebay.
For large transactions you could rely on reputation instead - if the value of reputation is $X, you can trade for $X/2 with that person, as it would be silly for them to cash out so cheaply.
Yes, there is: bit-contract. I forgot where I read about it, but basic idea is very simple: before transaction takes place, both sides make a separate deposit exceeding in size the value of the transaction. After transaction completes, either both sides vote to release the deposits and get their deposit coins back, or one of the parties is so aggrieved, they decide to punish the other party by voting to destroy both deposits. The loser loses twice, but they don't let the perp to get away with it either.
This creates incentive for both sides to strive for mutual satisfaction. Scammers and crazy cranks will run out of money pretty soon. This works really well for small contracts, such as selling an old iPod on Ebay.
For large transactions you could rely on reputation instead - if the value of reputation is $X, you can trade for $X/2 with that person, as it would be silly for them to cash out so cheaply.
> one of the parties is so aggrieved, they decide to punish the other party by voting to destroy both deposits. The loser loses twice, but they don't let the perp to get away with it either.
Honestly, that is wildly impractical and would never account for the requirements of the real world. Want to buy a house for $300000? Well you better put up at least another $300000. Oh, and if the other guy scams you, you're out at least $600000.
Like you said, that scheme might work for microtransactions. For actual business, almost nobody has that kind of money lying around.
> For large transactions you could rely on reputation instead
Isn't that fundamentally what you are trying to avoid?
Honestly, that is wildly impractical and would never account for the requirements of the real world. Want to buy a house for $300000? Well you better put up at least another $300000. Oh, and if the other guy scams you, you're out at least $600000.
Like you said, that scheme might work for microtransactions. For actual business, almost nobody has that kind of money lying around.
> For large transactions you could rely on reputation instead
Isn't that fundamentally what you are trying to avoid?
This is an unreasonable complaint. No one buys houses with piles of cash. Bitcoin is cash. It probably won't replace transactions that are impractical to do using cash today.
I think you're talking about NASHX http://nashx.com/HowItWorks and the trustless version documented by Oleg Andreev http://blog.oleganza.com/post/58240549599/contracts-without-...
(I mentioned the former in my post, but I didn't realize NASHX was acting as a trusted 3rd party)
(I mentioned the former in my post, but I didn't realize NASHX was acting as a trusted 3rd party)
The bit-contract idea is neat, although it seems like it could be misused. A group of dishonest buyers could gang up on an honest seller and inflict a worst-case N x (penalty + item_cost) damage at a cost to each buyer of (penalty - item_cost). The seller damage is only N x (penalty - item_cost) if the seller waits until they have payment before shipping, though, so I suppose you'd need a very high N to impact a high-volume seller that can verify quickly. Seems reasonable for low-profile or low-volume sellers, though.
I'm not convinced many people would volunteer to destroy their deposits just to punish a fraudulent seller.
For reference, say you're trying to buy a widget valued $100. Both the seller and you deposit $150, you pay, the seller never ships. At that point you're out $100. You can punish the seller, at no use to you whatsoever, and increase your losses to $250. Do you opt to double (or more) your losses?
What if the seller were to offer $50 back? I know I'd rather be out $50 than $200.
For reference, say you're trying to buy a widget valued $100. Both the seller and you deposit $150, you pay, the seller never ships. At that point you're out $100. You can punish the seller, at no use to you whatsoever, and increase your losses to $250. Do you opt to double (or more) your losses?
What if the seller were to offer $50 back? I know I'd rather be out $50 than $200.
interesting idea but completely impractical for normal humans. if i want to buy an ipod on ebay for 0.5btc, i'm not going to stage another 0.5btc to protect against fraud where the potential outcome is I lose double, and the fraudulent seller loses 0 or whatever the staged contract amount was.
The fraudster loses more than zero, that the whole point. If you're buying a $200 iPod, both you and counterparty make a $400 deposit. If seller takes your money but never sends you the iPod, you punish him for $400, so he is $200 in the hole.
If the honest people outnumber fraudster, fraudster a lose.
If the honest people outnumber fraudster, fraudster a lose.
Strictly, there has to be at least as many people willing to punish than there are people unwilling to punish amongst the people the fraudster targets for the fraudster to lose all the gains from their scam. I don't know that this radically changes anything, but it's not quite the same thing as honest people outnumbering fraudsters.
This is silly because $x can mean a whole lot more to one party than the other. A rich and nefarious individual could cause massive harm to others.
Just curious but where do the funds go when the transaction is 'destroyed'?
Presumably they're just unspendable until the parties reach a resolution. If that never happens then everyone else's bitcoins increase in value a tiny bit, in theory.
Try explaining to your local regulators why your bitcoin balance has traces of illegal/laundered money in it...because a drug overlord's purchase was destroyed and the funds were gifted to the community.
I believe the suggestion was to destroy the bitcoins, which implicitly makes everyone else's go up in value, rather than explicitly dividing it up and emailing it to every bitcoin user in the world.
Also, I imagine you'd explain it to regulators with "a drug overlord's purchase was destroyed and the funds were gifted to the community". They're not stupid - if I obtained a "tainted" bitcoin and emailed fractions of it to everyone I didn't like, I doubt the authorities would be naive enough to put all my enemies in jail.
Also, I imagine you'd explain it to regulators with "a drug overlord's purchase was destroyed and the funds were gifted to the community". They're not stupid - if I obtained a "tainted" bitcoin and emailed fractions of it to everyone I didn't like, I doubt the authorities would be naive enough to put all my enemies in jail.
No, not gifted to the community. More like, burned, and thus driving down inflation.
> Existing financial system is perhaps suboptimal in terms of transferring money, but it has pretty good tools of ensuring the expected goods and services flow back
In what way is physical money different from bitcoint in this aspect? Is there an implied statement here than for all the ages where we did not have electronic banking, money was inherently insecure and built on crumbling bride pillars?
Treat bitcoin like physical money, and most issues goes away. I don't post thousands of money to a strange in a different country to hold them for me, nor do I give physical money to a store before I have the product in my hand.
In what way is physical money different from bitcoint in this aspect? Is there an implied statement here than for all the ages where we did not have electronic banking, money was inherently insecure and built on crumbling bride pillars?
Treat bitcoin like physical money, and most issues goes away. I don't post thousands of money to a strange in a different country to hold them for me, nor do I give physical money to a store before I have the product in my hand.
I thought this was essentially a solved problem with Bitcoin. The protocol allows for transfers that must be verified by 3 (or more) parties. So all we need is a few trusted third parties to arbitrate transactions.
I guess this is paraphrasing Friedrich Nietzsche. I remember quoting this on a discussion with my mother, about 5 years ago. She replied: "So you're saying that if a kid gets bullied every time he steps out the door, will turn up stronger or afraid?". At the beginning I thought she just didn't get it but after elaborating the phrase more and more I came to the conclusion that either it's awfully incomplete (there should be a second part missing somewhere) or it's just plain wrong.
Related to bitcoin, of course if Russia, EU, JP, China, US, AU, Brazil and Turkey decide that it's illegal and should be stopped for the greater good, bitcoin with it's current form will either die or lose a huge % of it's current value.
I understand that it's good (and to me a little bit suspicious) to come clean and totally intact out of DPR bust and SK downfall, survive MtGox's failure, but ultimately if beaten too hard it's going to die not become stronger.
Related to bitcoin, of course if Russia, EU, JP, China, US, AU, Brazil and Turkey decide that it's illegal and should be stopped for the greater good, bitcoin with it's current form will either die or lose a huge % of it's current value.
I understand that it's good (and to me a little bit suspicious) to come clean and totally intact out of DPR bust and SK downfall, survive MtGox's failure, but ultimately if beaten too hard it's going to die not become stronger.
Another fun thing to do with that phrase is consider its contrapositive:
That which doesn't make you stronger, kills you.
Which is equivalent, but more obviously absurd.
That which doesn't make you stronger, kills you.
Which is equivalent, but more obviously absurd.
Sorry to be pedantic, but I think it's implied that the universe of discourse is "all things that are attempting to kill you." The contrapositive under that assumption isn't absurd.
Sorry to be even more pedantic, but even with your correction, the phrase still doesn't make sense. Maybe something that was attempting to kill you but fails makes you weaker, so that the next threat kills you more easily.
If a car runs me over and breaks something in my body, but I manage to survive, it doesn't make me stronger or car-crash resistant.
If a car runs me over and breaks something in my body, but I manage to survive, it doesn't make me stronger or car-crash resistant.
I'm not defending the original quote--I was just saying that the contrapositive "that which doesn't make you stronger, kills you" seems overly absurd unless you consider the universe of discourse.
What doesn't kill you makes you almost dead.
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>'Out of life's school of war: What does not destroy me, makes me stronger.'
The original maxim is in the first person which seems to imply it should be considered an expression of a personal mantra (or indeed maxim) rather than an observation about people in general(which would be pretty dumb).
The original maxim is in the first person which seems to imply it should be considered an expression of a personal mantra (or indeed maxim) rather than an observation about people in general(which would be pretty dumb).
Economically it doesn't make sense. At all.
Right now we're witnessing a technological race to mass adoption for cryptocurrencies. Any hit to a specific cryptocurrency means that a certain number of users will switch to the alternative goods. In these types of races (e.g. Iridium, Betamax, etc.) that means an eventual death.
While Bitcoin most likely won't be mass adopted because of liquidity issues, that doesn't mean another implementation of cryptocurrency won't be able to overcome that.
Certainly, a hurt that doesn't kill bitcoin doesn't make it stronger.
Right now we're witnessing a technological race to mass adoption for cryptocurrencies. Any hit to a specific cryptocurrency means that a certain number of users will switch to the alternative goods. In these types of races (e.g. Iridium, Betamax, etc.) that means an eventual death.
While Bitcoin most likely won't be mass adopted because of liquidity issues, that doesn't mean another implementation of cryptocurrency won't be able to overcome that.
Certainly, a hurt that doesn't kill bitcoin doesn't make it stronger.
I believe that too. I don't know if bitcoin is going to be still here in 100 years. But I'm sure that it will play an important part in whatever new will be shaped out of this.
Economics apart, the protocol is a huge breakthrough.
Economics apart, the protocol is a huge breakthrough.
The phrase is not meant to be literally. For example if someone hits you, you fall and become paraplegic obviously you aren't made stronger.
The idea as applied to your example is that if the kid is pushed around day after day then maybe by the 100th day he'll realise the bullies don't have any _real_ power over him. He'll become resilient to their bullying. If he is smart he'll learn tactics to combat their bullying, be they by avoiding the bullies, talking to them or hitting the gym and learning martial arts. The saying is basically saying the longer you are exposed to setbacks the longer you have to overcome them.
In that regard, if the MtGox demise doesn't take out bitcoin completely the bitcoin that rises will be more wary of exchanges that cannot or will not prove their reserves. There have already been multiple ideas put forth for how this can be done and I think I even saw a post on HN with someone who claims to have implemented one of them.
The idea as applied to your example is that if the kid is pushed around day after day then maybe by the 100th day he'll realise the bullies don't have any _real_ power over him. He'll become resilient to their bullying. If he is smart he'll learn tactics to combat their bullying, be they by avoiding the bullies, talking to them or hitting the gym and learning martial arts. The saying is basically saying the longer you are exposed to setbacks the longer you have to overcome them.
In that regard, if the MtGox demise doesn't take out bitcoin completely the bitcoin that rises will be more wary of exchanges that cannot or will not prove their reserves. There have already been multiple ideas put forth for how this can be done and I think I even saw a post on HN with someone who claims to have implemented one of them.
Or, the kid will grow into a misanthrope. Or, perhaps become depressed enough to commit suicide. Or, more mundanely, will soldier on in life, carrying psychological scars.
> The main issue with this is that services may be reluctant to give out this information if they consider it useful to competitors.
Well, if thats the issue it's possible to use more complex cryptographic techniques to make the entire process completely zero-knowledge.
The idea is that you basically take the protocol I described but then execute it in an environment for zero-knowledge proof of general computation (e.g. http://www.scipr-lab.org/). You'd make a number of different performance tradeoffs to optimize for that environment, but thats basically the idea.
There would need to be some development needed to turn that into a production system, but if the improved privacy is the _only_ holdup, it can certainly be fixed.
Well, if thats the issue it's possible to use more complex cryptographic techniques to make the entire process completely zero-knowledge.
The idea is that you basically take the protocol I described but then execute it in an environment for zero-knowledge proof of general computation (e.g. http://www.scipr-lab.org/). You'd make a number of different performance tradeoffs to optimize for that environment, but thats basically the idea.
There would need to be some development needed to turn that into a production system, but if the improved privacy is the _only_ holdup, it can certainly be fixed.
Are there other holdups you foresee?
there is a much simpler reason why this is the case:
"But in a rational world this incident (might take a bit of time for the market to realize this) should actually INCREASE confidence in BTC, since a large, irresponsible player was knocked out, and the rest of the players on the field have a net higher level of responsibility (for now)."
(https://news.ycombinator.com/item?id=7295430)
I predicted that the BTC price would bounce back quickly, but I had no idea just how quickly (just wished my paycheck came in faster; I'd have bought in at 450 instead of 600).
"But in a rational world this incident (might take a bit of time for the market to realize this) should actually INCREASE confidence in BTC, since a large, irresponsible player was knocked out, and the rest of the players on the field have a net higher level of responsibility (for now)."
(https://news.ycombinator.com/item?id=7295430)
I predicted that the BTC price would bounce back quickly, but I had no idea just how quickly (just wished my paycheck came in faster; I'd have bought in at 450 instead of 600).
Does the elimination of a large irresponsible player actually offer any new information about how irresponsible the other actors in the market are? I don't think there is any particular reason why that would be the case, I am interested to know how.
All of the irresponsible actors involved in the 2008 financial crisis were left intact. They have no incentive not to try this again.
The fall of mtgox shows that in the bitcoin world, failure will lead to death.
The fall of mtgox shows that in the bitcoin world, failure will lead to death.
>failure will lead to death
But not before you've made millions, and walked away with no repercussions.
But not before you've made millions, and walked away with no repercussions.
It does not directly, but that's not important in markets, what matters is what people believe and how much the believe it. It also helps that it's most likely true anyways.
This seems to contradict the assertion that this would be true in "rational" markets in the original quote.
You can rationally attempt to quantify the effects of peoples wants and desires even if those themselves are not necessarily rational. Note the difference to: "you can rationally attempt to quantify peoples' wants and desires"
Isn't the assumption made there that the large irresponsible player was more irresponsible than the average player? Is there much evidence to suggest that? Or would we find that the average player is worse than MtGox, should they be put under the level of scrutinity that MtGox was/is?
I find it a bit difficult to imagine how Mtgox could be merely average in irresponsibility.
Ethereum has a lot of potential. Here's a more digestible summary of the whitepaper linked in the blog post, by a member of the founding team: http://bitcoinmagazine.com/9671/ethereum-next-generation-cry...
I'm quite skeptical of Ethereum's ability to meaningfully contribute to these matters. An enormous amount of trustlessness is already possible in Bitcoin, but people just do not bother using it: They believe they can trust their counterparties (or they wouldn't transact!) and implementing trustless systems is substantially harder to do and harder to monetize (no central point to seek rents from). Witness Ethereum itself: Instead of targeted improvements to Bitcoin it's proposed as a whole new currency to be funded by eager speculators before it even exists.
It is my experience that the limitations of trustlessness in the Bitcoin ecosystem have arisen almost exclusively from a lack of interest or knoweldge and not from any missing technological capability.
It is my experience that the limitations of trustlessness in the Bitcoin ecosystem have arisen almost exclusively from a lack of interest or knoweldge and not from any missing technological capability.
That's an interesting point. I suspect the main reason people aren't using those capabilities of Bitcoin more frequently is that no one has spent the time to make the UX good.
Unfortunately, that's also basically true of every consumer-oriented open source project ever. I'm not sure why it's the case, but it does seem that good UX requires a profit motive.
Unfortunately, that's also basically true of every consumer-oriented open source project ever. I'm not sure why it's the case, but it does seem that good UX requires a profit motive.
You can't really solve it with "UX" as a blanket thing.
To build trustless service you must design cryptographic protocols that use the bitcoin "script" expression language— it's form of programming. Don't hold your breath for a good UI there. :)
Once you've done that, you can slap a nice UI on it to make it available to mortals. An example: https://bitrated.com/
To build trustless service you must design cryptographic protocols that use the bitcoin "script" expression language— it's form of programming. Don't hold your breath for a good UI there. :)
Once you've done that, you can slap a nice UI on it to make it available to mortals. An example: https://bitrated.com/
Exactly, ethereum is "pushing the borders" on a "border" of bitcoin that noone seems to be running into yet, or caring about, anyway.
Once multisig is used more heavily in the bitcoin world then maybe a better case can be made for ethereum becoming a success (though I nonetheless find ethereum tremendously exciting, from a pure technology standpoint)
Once multisig is used more heavily in the bitcoin world then maybe a better case can be made for ethereum becoming a success (though I nonetheless find ethereum tremendously exciting, from a pure technology standpoint)
> ethereum tremendously exciting, from a pure technology standpoint
I don't.
I think it's the wrong model and it's only interesting when you don't have a very complete model of what computation is doing inside a consensus system.
What script is actually doing in Bitcoin is not "running code"— running identical code with identical on hundreds of thousands of nodes just for it own sake would be stupid and wasteful. What happens is that users of the network run the code themselves and their scriptSig is a proof that they ran the code correctly (and that the code accepted their inputs). The simplest way to do this is to replay the execution, but now it makes sense: The network runs the code to verify you ran it right, and by doing so the contract embedded in the script is made trustless.
Running the code in the network has a lot of downsides, however. It completely lacks privacy (except to the extent that we have an opcode that implements a zero knoweldge proof of knoweldge of the discrete log of an EC point), and there is tremendous pressure on the computational complexity, implementation complexity risk, and size of these scripts because of the cost of verify them. Script execution is a pure externality that we only safely know how to cope with by making sure that it is very very cheap (we do this in Bitcoin by making sure that trivial static analysis can determine the execution cost (measure the size), and then bounding that cost).
But actually executing the script isn't the only way to verify computation was performed correctly. Using cryptography it's possible to have constant size and complexity proofs, independent of the program size.
This lets you cook up stuff like: https://bitcointalk.org/index.php?topic=277389.0 and I find that a lot more exciting. Especially since these kinds of enhancements don't demand the risky tradeoffs that making script more expensive demands.
I'm also excited about distributed oracles— programs that sign transactions conditional on user specified code, including— potentially— external inputs. The ability to have external inputs (trusted by the oracle) greatly increases the expressive power beyond what any in-consensus system could have, and using multisignatures with multiple oracles you can achieve good security though not trustlessness. E.g. "This tx pays to bob if bob.com is on the first page of google, otherwise after april 1st it can be redeemed by greg". I would expect to see any attempt at more powerful script first implemented via multisignature oracles before even considering making it trustless by merging it into the network.
I don't.
I think it's the wrong model and it's only interesting when you don't have a very complete model of what computation is doing inside a consensus system.
What script is actually doing in Bitcoin is not "running code"— running identical code with identical on hundreds of thousands of nodes just for it own sake would be stupid and wasteful. What happens is that users of the network run the code themselves and their scriptSig is a proof that they ran the code correctly (and that the code accepted their inputs). The simplest way to do this is to replay the execution, but now it makes sense: The network runs the code to verify you ran it right, and by doing so the contract embedded in the script is made trustless.
Running the code in the network has a lot of downsides, however. It completely lacks privacy (except to the extent that we have an opcode that implements a zero knoweldge proof of knoweldge of the discrete log of an EC point), and there is tremendous pressure on the computational complexity, implementation complexity risk, and size of these scripts because of the cost of verify them. Script execution is a pure externality that we only safely know how to cope with by making sure that it is very very cheap (we do this in Bitcoin by making sure that trivial static analysis can determine the execution cost (measure the size), and then bounding that cost).
But actually executing the script isn't the only way to verify computation was performed correctly. Using cryptography it's possible to have constant size and complexity proofs, independent of the program size.
This lets you cook up stuff like: https://bitcointalk.org/index.php?topic=277389.0 and I find that a lot more exciting. Especially since these kinds of enhancements don't demand the risky tradeoffs that making script more expensive demands.
I'm also excited about distributed oracles— programs that sign transactions conditional on user specified code, including— potentially— external inputs. The ability to have external inputs (trusted by the oracle) greatly increases the expressive power beyond what any in-consensus system could have, and using multisignatures with multiple oracles you can achieve good security though not trustlessness. E.g. "This tx pays to bob if bob.com is on the first page of google, otherwise after april 1st it can be redeemed by greg". I would expect to see any attempt at more powerful script first implemented via multisignature oracles before even considering making it trustless by merging it into the network.
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If I see a major financial institution fail and lots and lots of depositors/customers lose money, I'm going to maybe reconsider my strategy of "not stuffing the mattress full of twenty dollar bills."
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Been quite some time since Kaiser Wilhelm was cited on HN.
I'm still not sure why Mt. Gox existed in the first place. Isn't the whole point of bitcoin that it is decentralized?
The failure of Mt. Gox could be viewed as a market reset.
The failure of Mt. Gox could be viewed as a market reset.
Mtgox existed because
Only ways to get bitcoin:
1. Mine them (very very hard and getting harder)
2. Get paid in bitcoin for product/service
3. Buy them on an exchange for fiat
4. Be given bitcoin by early adopters
Until its possible to get paid (salaries), pay suppliers, pay taxes etc the exchanges are needed to convert traditional currency to bitcoin and vice versa.
Anyways the writing was on the wall for a long time, i stopped using them over a year ago, bitstamp are professional while mtgox were amateur cowboys with no support.
Only ways to get bitcoin:
1. Mine them (very very hard and getting harder)
2. Get paid in bitcoin for product/service
3. Buy them on an exchange for fiat
4. Be given bitcoin by early adopters
Until its possible to get paid (salaries), pay suppliers, pay taxes etc the exchanges are needed to convert traditional currency to bitcoin and vice versa.
Anyways the writing was on the wall for a long time, i stopped using them over a year ago, bitstamp are professional while mtgox were amateur cowboys with no support.
Isn't number 3 just a variation of number 4, with a middleman? That's all I mean. Can't software exist for individual early adopters to sell their coin in exchange for fiat at market values without a centralized exchange? To me, it seems like centralized exchange just leads to collapse.
> Can't software exist for individual early adopters to sell their coin in exchange for fiat at market values without a centralized exchange?
As I see it, the tricky bit without an exchange is (1) establishing a "market price" in the first place, and (2) coordinating the fiat side of the transaction with the cryptocurrency side (the same problem exists between two different cryptocurrencies with different networks) so that the two either succeed or fail together.
As I see it, the tricky bit without an exchange is (1) establishing a "market price" in the first place, and (2) coordinating the fiat side of the transaction with the cryptocurrency side (the same problem exists between two different cryptocurrencies with different networks) so that the two either succeed or fail together.
There is work being done on distributed exchange, the problem is quite difficult tho, I believe there is an exchange in germany that works quite well and users pay by bank transfer between each other (sepa transfers are cheap or free)
There is also localbitcoin
some people used mtgox to trade, but I can not understand why since their fees were high, trading engine slow and buggy and well there are better alternatives
There is also localbitcoin
some people used mtgox to trade, but I can not understand why since their fees were high, trading engine slow and buggy and well there are better alternatives
bitstamp are professional while mtgox were amateur cowboys with no support.
This is all so clear now, it seems. Further, Bitstamp was bitten by exactly the same bug (the malleability bug which was apparently what demonstrated Gox's purported cluelessness, and which I highly doubt was the cause of MtGox's apparent failure).
Unless there was an independent audit by a third party, why should you trust that they won't fall victim to exactly the same issue?
This is all so clear now, it seems. Further, Bitstamp was bitten by exactly the same bug (the malleability bug which was apparently what demonstrated Gox's purported cluelessness, and which I highly doubt was the cause of MtGox's apparent failure).
Unless there was an independent audit by a third party, why should you trust that they won't fall victim to exactly the same issue?
> Bitstamp was bitten by exactly the same bug (the malleability bug
This is not factually correct. Bitstamp and MTGox's issues were unrelated, and the transactions that caused problems for Bitstamp were never seen on the network prior to a couple hours before MTGox's press release (and in volume, until after it).
This is not factually correct. Bitstamp and MTGox's issues were unrelated, and the transactions that caused problems for Bitstamp were never seen on the network prior to a couple hours before MTGox's press release (and in volume, until after it).
Bitstamp and MTGox's issues were unrelated
In both cases there was an issue with the service having transaction issues due to the malleability issue. Bitstamp suspended operations to fix the issue. How can you possibly say they are unrelated?
Now supposedly Gox was robbed (over months) using this exploit, but that simply makes no sense at all, and is people grasping, in the absence of anything else. It seems more likely that someone got the private keys on holdings wallets, whether insider or hacker.
In both cases there was an issue with the service having transaction issues due to the malleability issue. Bitstamp suspended operations to fix the issue. How can you possibly say they are unrelated?
Now supposedly Gox was robbed (over months) using this exploit, but that simply makes no sense at all, and is people grasping, in the absence of anything else. It seems more likely that someone got the private keys on holdings wallets, whether insider or hacker.
> Bitstamp suspended operations to fix the issue. How can you possibly say they are unrelated?
Because they were unrelated. Bitstamp was spending its own unconfirmed change, and those spends got hung when the change was mutated by the attacker— with an attack that didn't exist while MTGox was processing withdraws. MTGox happened to never spend any coins that weren't at least 6 deep in the blockchain, even it's own change.
> and is people grasping, in the absence of anything else
It's actually MTGox's own claims. Their actual issues in this space were because they reissued payments without conflicting the original payment— allowing both to go through. No one else, as far as I can find, was performing reissues at all— much less in such an unsafe manner.
Because they were unrelated. Bitstamp was spending its own unconfirmed change, and those spends got hung when the change was mutated by the attacker— with an attack that didn't exist while MTGox was processing withdraws. MTGox happened to never spend any coins that weren't at least 6 deep in the blockchain, even it's own change.
> and is people grasping, in the absence of anything else
It's actually MTGox's own claims. Their actual issues in this space were because they reissued payments without conflicting the original payment— allowing both to go through. No one else, as far as I can find, was performing reissues at all— much less in such an unsafe manner.
It's actually MTGox's own claims. Their actual issues in this space were because they reissued payments without conflicting the original payment
Where did they claim this? They did claim that they were suspending withdrawals due to that issue, but in actuality they had not done any withdrawals for months. It was a convenient cover at a convenient time, which they tried to extend out with the "until this problem is fixed in the protocol" nonsense.
Where did they claim this? They did claim that they were suspending withdrawals due to that issue, but in actuality they had not done any withdrawals for months. It was a convenient cover at a convenient time, which they tried to extend out with the "until this problem is fixed in the protocol" nonsense.
See, for example, http://online.wsj.com/news/articles/SB1000142405270230489970...
They certainly had made withdraws within months. Here is a random address receiving payments from MTGox (the ones with the 0.001 fees) https://blockchain.info/address/1AacEsKeXqnUqtYQWKDHJV3JtpJk... if the API were still up I'd show you how to query the vin scrippubkeys to have mtgox themselves identify the txn as theirs— but it's not up now.
They certainly had made withdraws within months. Here is a random address receiving payments from MTGox (the ones with the 0.001 fees) https://blockchain.info/address/1AacEsKeXqnUqtYQWKDHJV3JtpJk... if the API were still up I'd show you how to query the vin scrippubkeys to have mtgox themselves identify the txn as theirs— but it's not up now.
Cash is decentralized. That doesn't mean you can obtain it out of thin air. You need to exchange something of value (your work, assets, whatever) for cash. Mt. Gox and other exchanges fulfill that role.
No idea what you mean by a "market reset."
No idea what you mean by a "market reset."
well said. cash is insanely decentralized.
> I'm still not sure why Mt. Gox existed in the first place. Isn't the whole point of bitcoin that it is decentralized?
Insofar as the second sentence is true at all, it is in that the issuance and transaction verification of bitcoin and bitcoin transactions is decentralized.
That has nothing to do with the role of a centralized exchange in facilitating markets for people exchanging bitcoin for other commodities, like USD.
Insofar as the second sentence is true at all, it is in that the issuance and transaction verification of bitcoin and bitcoin transactions is decentralized.
That has nothing to do with the role of a centralized exchange in facilitating markets for people exchanging bitcoin for other commodities, like USD.
Exchanges exist because BTC doesn't ban anything. As long as people want to use exchanges there might be exchanges. It's an easy concept really.
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What theme is the blog?
It seems the author thinks Bitcoin is like your average software-project, where you fix a bug and just move on.
The naive view of a libertarian dreamer.
The naive view of a libertarian dreamer.
Please elaborate your argument instead of using opaque ad-hominem shorthands.
I don't think it's ad-hominem, but alas.
I don't feel the need to provide the list of arguments that I'm sure critics of Bitcoin have provided on this forum lots of times and I am confident you are already familiar with. Don't mean to waste your time.
I /did/ want to respond to this article because the original author symptoms of blind faith in Bitcoin, where even when something disastrous happens to it, is portrayed as beneficial. I'm sure you'll agree that this is a bit of a stretch.
I don't feel the need to provide the list of arguments that I'm sure critics of Bitcoin have provided on this forum lots of times and I am confident you are already familiar with. Don't mean to waste your time.
I /did/ want to respond to this article because the original author symptoms of blind faith in Bitcoin, where even when something disastrous happens to it, is portrayed as beneficial. I'm sure you'll agree that this is a bit of a stretch.
Since you probably know, why do liberals / progressives / whatever seem to hate on what essentially amounts to an opt-in currency that is not legally backed and regulated? Is it only because people propose that it replace legal tender? Does opposition decrease when you view it only as an alternative? Is it because you associate it with libertarians, who tend to rustle jimmies on the internet?
I'm genuinely curious, as I fail to see anything wrong with keeping the big social experiment running.
Disclaimer: I own zero bitcoins, and have no dog in this fight. Not even a doge.
I'm genuinely curious, as I fail to see anything wrong with keeping the big social experiment running.
Disclaimer: I own zero bitcoins, and have no dog in this fight. Not even a doge.
Personally, I just get annoyed at the libertarian dreamers. It's not that I hate bitcoin or even that I want it to fail. On balance, I'm probably in favor of it succeeding. But it's really hard to keep wanting that after hearing all the ideological claptrap.. I find myself hoping it'll crash just to shut these people up.
A movement that started as a reaction to the failures of communism has become just as ideological and unrealistic. "The whole world would have peace and prosperity if only people acted the way we think they should." That's aside from the libertarians who are basically just garden-variety tribal Republicans but want to be hip.
I'd also note that, for the purpose of this discussion, "liberals/progressives/moderates/whatevers" basically includes everyone who's not a true libertarian believer.
A movement that started as a reaction to the failures of communism has become just as ideological and unrealistic. "The whole world would have peace and prosperity if only people acted the way we think they should." That's aside from the libertarians who are basically just garden-variety tribal Republicans but want to be hip.
I'd also note that, for the purpose of this discussion, "liberals/progressives/moderates/whatevers" basically includes everyone who's not a true libertarian believer.
Do you see it the same way you view goldbugs?
I can grok all sorts of reasons to speculate on gold, but I see that as speculation and not some rational investment that provides a greater value to society. It's ok, as long as it's a niche. The bitcoin rage seemed, IMO, to be about speculation wrapped in anarcho-libertarian talk about threatening the existing financial world. It's one thing to be a niche, it's another if it's destructive (whether it is capable of that or not, but just the perception).
Some other thinking that makes me wonder about that: http://adviceunasked.blogspot.com/2013/12/bitcoin-what-again...
Fine to upend reality if you can produce a cogent explanation of how everything will work afterwards.
I can grok all sorts of reasons to speculate on gold, but I see that as speculation and not some rational investment that provides a greater value to society. It's ok, as long as it's a niche. The bitcoin rage seemed, IMO, to be about speculation wrapped in anarcho-libertarian talk about threatening the existing financial world. It's one thing to be a niche, it's another if it's destructive (whether it is capable of that or not, but just the perception).
Some other thinking that makes me wonder about that: http://adviceunasked.blogspot.com/2013/12/bitcoin-what-again...
Fine to upend reality if you can produce a cogent explanation of how everything will work afterwards.
True believers will not be swayed by catastrophic failure, or any other evidence, that is what makes them true believers.
Well, I never said moderates. I guess I primarily meant 'pro-regulation', specifically when it comes to currency, who tend to inhabit the left side of the political spectrum. I've seen quite a few others who find the whole thing interesting, but also a lot of hate, so it looked like it was being used as a proxy to hate on libertarians. I'm just intrigued by the whole thing, and have a few friends who made pretty good money by mining up coins early (made money in spite of burned out graphics cards).
EDIT:
Should I have used the phrase pro-existing-regulations-or-more? That's basically what I meant. I'm personally a fan of some level of regulation when it comes to my legally recognized 'can pay the IRS this and they will probably not send you to jail' kind of tender.
EDIT:
Should I have used the phrase pro-existing-regulations-or-more? That's basically what I meant. I'm personally a fan of some level of regulation when it comes to my legally recognized 'can pay the IRS this and they will probably not send you to jail' kind of tender.
That's the ideological thing I'm talking about. "Pro-regulation" is literally 100% of people on some level, aside from anarchists. It's a meaningless statement.
EDIT: But yeah, a 'proxy to hate on libertarians' is sort of correct, although from my viewpoint a better wording would be 'reaction to ideological statements and straw-manning by libertarians'. I think a successful online crypto-currency whether it's BTC or something else would be a good thing for the world, but there's only so much nonsense I can hear before hoping it'll crash just to take some people down a peg.
EDIT: But yeah, a 'proxy to hate on libertarians' is sort of correct, although from my viewpoint a better wording would be 'reaction to ideological statements and straw-manning by libertarians'. I think a successful online crypto-currency whether it's BTC or something else would be a good thing for the world, but there's only so much nonsense I can hear before hoping it'll crash just to take some people down a peg.
Here's the short version from Charlie Stross:
http://www.antipope.org/charlie/blog-static/2013/12/why-i-wa...
Personally I'm a progressive who is somewhat supportive of the privacy potential of the cryptocurrencies but after the Silk Road bust it seems like the bitcoin community only cares about speculation and hoarding...
Personally I'm a progressive who is somewhat supportive of the privacy potential of the cryptocurrencies but after the Silk Road bust it seems like the bitcoin community only cares about speculation and hoarding...
Charlie Stross also doesn't even understand why he hates BTC. He complains that it's deflationary, but then completely botches the reason why standard left wing theories claim deflation is bad.
http://www.bayesianwitch.com/blog/2014/bitcoin_critics_not_e...
Jbooth was far more honest than Stross: "Personally, I just get annoyed at the libertarian dreamers...I find myself hoping it'll crash just to shut these people up."
http://www.bayesianwitch.com/blog/2014/bitcoin_critics_not_e...
Jbooth was far more honest than Stross: "Personally, I just get annoyed at the libertarian dreamers...I find myself hoping it'll crash just to shut these people up."
So, it's because its the digital equivalent of a 'digital gold standard' that is hard to track and tax (by design). I guess that explains why it rustles many jimmies, even moreso when it keeps gaining value and marketshare.
My point is that a claim like "Bitcoin [isn't] like your average software-project, where you fix a bug and just move on," is a potentially valuable insight if you can elaborate and support it.
It's not immediately obvious to me that the statement is true, though. Certainly it's not an average software project, since it's, among other things, a protocol. But, if you look at the history of others, like SSL/TLS, there's a lot of precedence for fixing buggy protocols, too.
It's not immediately obvious to me that the statement is true, though. Certainly it's not an average software project, since it's, among other things, a protocol. But, if you look at the history of others, like SSL/TLS, there's a lot of precedence for fixing buggy protocols, too.
Even if we view it that way, there was no bug in bitcoin.
Frankly I don't see how that's possible. There are two sides to a transaction: the transfer of money in one direction and the transfer of goods or services in the other. Making one side very secure (or free from government intervention etc.) while neglecting the other is like building a bridge with one pillar made of tungsten and the other of adobe bricks. It'd only be as usable as its weaker side.
The existing financial system is perhaps suboptimal in terms of transferring money, but it has pretty good tools of ensuring the expected goods and services flow back to the buyer: chargebacks, courts of law etc. The Bitcoin "economy" has nothing comparable except a vague spirit of community that fails more often than not (see e.g. the pathetic appeals of Silk Road 2 or Mt. Gox depositors). So when a fraudulent transaction occurs, the best hope of the victim lies, ironically, with the much maligned government institutions that they were trying to avoid in the first place. (Incidentally, this is also why it's perfectly reasonable for countries to outlaw Bitcoin transactions and have a good expectation of enforcing it.)
There's no way cryptography and peer-to-peer consensus protocols will provide verification for goods and services. It's a hard problem, and Bitcoiners ignoring it will not make it go away anytime soon. Until it's solved, have fun driving 18-wheelers across continually crumbling bridge pillars.