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Schlichter: "Bitcoin Is Cryptographic Gold"
Submitted by Detlev Schlichter via DetlevSchlichter.com,
The Bitcoin phenomenon has now reached the mainstream media where it met with a reception that ranged from sceptical to outright hostile. The recent volatility in the price of bitcoins and the issues surrounding Bitcoin-exchange Mt. Gox have led to additional negative publicity. In my view, Bitcoin as a monetary concept is potentially a work of genius, and even if Bitcoin were to fail in its present incarnation – a scenario that I cannot exclude but that I consider exceedingly unlikely – the concept itself is too powerful to be ignored or even suppressed in the long run. While scepticism towards anything so fundamentally new is maybe understandable, most of the tirades against Bitcoin as a form of money are ill-conceived, terribly confused, and frequently factually wrong. Central bankers of the world, be afraid, be very afraid!
Finding perspective
Any proper analysis has to distinguish clearly between the following layers of the Bitcoin phenomenon: 1) the concept itself, that is, the idea of a hard crypto-currency (digital currency) with no issuing authority behind it, 2) the core technology behind Bitcoin, in particular its specific algorithm and the ‘mining process’ by which bitcoins get created and by which the system is maintained, and 3) the support-infrastructure that makes up the wider Bitcoin economy. This includes the various service providers, such as organised exchanges of bitcoins and fiat currency (Mt. Gox, Bitstamp, Coinbase, and many others), bitcoin ‘wallet’ providers, payment services, etc, etc.
Before we look at recent events and recent newspaper attacks on Bitcoin, we should be clear about a few things upfront: If 1) does not hold, that is, if the underlying theoretical concept of an inelastic, nation-less, apolitical, and international medium of exchange is baseless, or, as some propose, structurally inferior to established state-fiat money, then the whole thing has no future. It would then not matter how clever the algorithm is or how smart the use of cryptographic technology. If you do not believe in 1) – and evidently many economists don’t (wrongly, in my view) – then you can forget about Bitcoin and ignore it.
If 2) does not hold, that is, if there is a terminal flaw in the specific Bitcoin algorithm, this would not by itself repudiate 1). It is then to be expected that a superior crypto-currency will sooner or later take Bitcoin’s place. That is all. The basic idea would survive.
If there are issues with 3), that is, if there are glitches and failures in the new and rapidly growing infra-structure around Bitcoin, then this does neither repudiate 1), the crypto-currency concept itself, nor 2), the core Bitcoin technology, but may simply be down to specific failures by some of the service providers, and may reflect to-be-expected growing pains of a new industry. As much as I feel for those losing money/bitcoin in the Mt Gox debacle (and I could have been one of them), it is probably to be expected that a new technology will be subject to setbacks. There will probably be more losses and bankruptcies along the way. This is capitalism at work, folks. But reading the commentary in the papers it appears that, all those Sunday speeches in praise of innovation and creativity notwithstanding, people can really deal only with ‘markets’ that have already been neatly regulated into stagnation or are carefully ‘managed’ by the central bank.
Those who are lamenting the new – and yet tiny – currency’s volatility and occasional hic-ups are either naïve or malicious. Do they expect a new currency to spring up fully formed, liquid, stable, with a fully developed infrastructure overnight?
Recent events surrounding Mt Gox and stories of raids by hackers would, in my opinion, only pose a meaningful long-term challenge for Bitcoin if it could be shown that they were linked to irreparable flaws in the core Bitcoin technology itself. There were indeed some allegations that this was the case but so far they do not sound very convincing. At present it still seems reasonable to me to assume that most of Bitcoin’s recent problems are problems in layer 3) – supporting infrastructure – and that none of this has so far undermined confidence in layer 2), the core Bitcoin technology. If that is indeed the case, it is also reasonable to assume that these issues can be overcome. In fact, the stronger the concept, layer 1), the more compelling the long-term advantages and benefits of a fully decentralized, no-authority, nationless global and inelastic digital currency are, the more likely it is that any weaknesses in the present infrastructure will quickly get ironed out. One does not have to be a cryptographer to believe this. One simply has to understand how human ingenuity, rational self-interest, and competition combine to make superior decentralized systems work. Everybody who understands the power of markets, human creativity, and voluntary cooperation should have confidence in the future of digital money.
None of what happened recently – the struggle at Mt. Gox, raids by hackers, market volatility – has undermined in the slightest layer 1), the core concept. However, it is precisely the concept itself that gets many fiat money advocates all exited and agitated. In their attempts to discredit the Bitcoin concept, some writers do not shy away from even the most ludicrous and factually absurd statements. One particular example is Mark T. Williams, a finance professor at Boston University’s School of Management who has recently attacked Bitcoin in the Financial Times and in this article on Business Insider.
Money and the state: Fact and fiction
Apart from all the scare-mongering in William’s article – such as his likening Bitcoin to an alien or zombie attack on our established financial system, stressing its volatility and instability – the author makes the truly bizarre claim that history shows the importance of a close link between currency and sovereignty. Good money, according to Williams, is state-controlled money. Here are some of his statements.
“Every sovereignty uses currency.”
“Trust and faith that a sovereign is firmly standing behind its currency is critical.”
“Sovereigns understand that without consistent economic growth and stability, the standard of living for its citizens will fall, and discontentment will grow. Nation-state treasuries print currency but the vital role of currency management– needed to spur economic growth — is reserved for central bankers.”
Williams reveals a striking lack of historical perspective here. Money-printing, central banking and any form of what Williams calls “currency management” are very recent phenomena, certainly on the scale that they are practiced today. Professor Williams seems to not have heard of Zimbabwe, or of any of the other, 30-odd hyperinflations that occurred over the past 100 years, all of which, of course, in state-managed fiat money systems.
Williams stresses what a long standing concept central banking is, citing the Swedish central bank that was founded in 1668, and the Bank of England, 1694. Yet, human society has made use of indirect exchange – of trading with the help of money – for more than 2,500 years. And through most of history – up to very recently – money was gold and silver, and the supply of money thus practically outside the control of the sovereign.
The early central banks were also very different animals from what their modern namesakes have become in recent years. Their degrees of freedom were strictly limited by a gold or silver standard. In fact, the idea that they would “manage” the currency to “spur” economic growth would have sounded positively ridiculous to most central bankers in history.
Additionally, by starting their own central banks, the sovereigns did not put “trust and faith” behind their currencies – after all, their currencies were nothing but units of gold and silver, and those enjoyed the public’s trust and faith on their own merit, thank you very much – the sovereigns rather had their own self-interest at heart, a possibility that does not even seem to cross William’s mind: The Bank of England was founded specifically to lend money to the Crown against the issuance of IOUs, meaning the Bank of England was founded to monetize state-debt. The Bank of England, from its earliest days, was repeatedly given the legal privilege – given, of course, by its sovereign – to ignore (default on) its promise to repay in gold and still remain a going concern, and this occurred precisely whenever the state needed extra money, usually to finance a war.
Bitcoin is cryptographic gold
“Gold is money and nothing else.” This is what John Pierpont Morgan said back in 1913. At the time, not only was he a powerful and influential banker, his home country, the United States of America, had become one of the richest and most dynamic countries in the world, yet it had no central bank. The history of the 19th century US – even if told by historians such as Milton Friedman and Anna Schwarz who were no gold-bugs but sympathetic to central banking – illustrates that monetary systems based on a hard monetary commodity (in this case gold), the supply of which is outside government control, is no hindrance to vibrant economic growth and rising prosperity. Furthermore, economic theory can show that hard and inelastic money is not only no hindrance to growth but that it is indeed the superior foundation of a market economy. This is precisely what I try to show with Paper Money Collapse. I do not think that this was even a very contentious notion through most of the history of economics. Good money is inelastic, outside of political control, international (“nationless”, as Williams puts it), and thus the perfect basis for international cooperation across borders.
Money was gold and that meant money was not a tool of politics but an essential constraint on the power of the state.
As Democritus said “Gold is the sovereign of all sovereigns”.
It is clear that on a conceptual level, Bitcoin has much more in common with a gold and silver as monetary assets than with state fiat money. The supply of gold, silver and Bitcoin, is not under the control of any issuing authority. It is money of no authority – and this is precisely why such assets were chosen as money for thousands of years. Gold, silver and Bitcoin do not require trust and faith in a powerful and privileged institution, such as a central bank bureaucracy (here is the awestruck Williams not seeing a problem: “These financial stewards have immense power and responsibility.”) Under a gold standard you have to trust Mother Nature and the spontaneous market order that employs gold as money. Under Bitcoin you have to trust the algorithm and the spontaneous market order that employs bitcoins as money (if the public so chooses). Under the fiat money system you have to trust Ben Bernanke, Janet Yellen, and their hordes of economics PhDs and statisticians.
Hey, give me the algorithm any day!
Money of no authority
But Professor Williams does seem unable to even grasp the possibility of money without an issuing and controlling central authority: “Under the Bitcoin model, those who create the software protocol and mine virtual currencies would become the new central bankers, controlling a monetary base.” This is simply nonsense. It is factually incorrect. Bitcoin – just like a proper gold standard – does not allow for discretionary manipulation of the monetary base. There was no ‘monetary policy’ under a gold standard, and there is no ‘monetary policy’ in the Bitcoin economy. That is precisely the strength of these concepts, and this is why they will ultimately succeed, and replace fiat money.
Williams would, of course, be correct if he stated that sovereigns had always tried to control money and manipulate it for their own ends. And that history is a legacy of failure.
The first paper money systems date back to 11th century China. All of those ended in inflation and currency disaster. Only the Ming Dynasty survived an experiment with paper money – by voluntarily ending it and returning to hard commodity money.
The first experiments with full paper money systems in the West date back to the 17th century, and all of those failed, too. The outcome – through all of history – has always been the same: either the paper money system collapsed in hyperinflation, or, before that happened, the system was returned to hard commodity money. We presently live with the most ambitious experiment with unconstrained fiat money ever, as the entire world is now on a paper standard – or, as James Grant put it, a PhD-standard – and money production has been made entirely flexible everywhere. This, however does not reflect a “longstanding bond between sovereign and its currency”, as Williams believes, but is a very recent phenomenon, dating precisely to the 15th of August 1971, when President Nixon closed the gold window, ended Bretton Woods, and defaulted on the obligation to exchange dollars for gold at a fixed price.
The new system – or non-system – has brought us persistent inflation and budget deficits, ever more bizarre asset bubbles, bloated and unstable banking systems, rising mountains of debt that will never be repaid, stagnating real incomes and rising income disparities. This system is now in its endgame.
But maybe Williams is right with one thing: “If not controlled and tightly regulated, Bitcoin — a decentralized, untraceable, highly volatile and nationless currency — has the potential to undermine this longstanding bond between sovereign and its currency.”
Three cheers to that.
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a DOG never fights with a cat in public,
Why didn't you say so in the first place? Your secret is safe with me.
The consensus of the network is mediated by what?
There is no central authority, the bitcoin network is peer-to-peer.(P2P) Like bittorrent. The bitcoin network runs the P2P bitcoin protocol on each node of the network.
With what? And where does it come from?
Precisely .... now let me know what the issuing authority is for gold and silver? Hint: NONE.
He who controls the code owns all the bitcoins.
Bitcoin is nice in this way: it weeds out those who would believe that 'statement'.
Well, apparently not.
Jeez dude chill, you'll give yourself cancer. It's just money..... oh hang on that's what you're in a lather about, sorry.
With gold I could go almost anywhere and get value...nothing to explain....PeriodGold and gold alone is THE universal store of value 5000 years and counting. Anything else is a valuable asset or medium of exchange.
I can live with that. Societies change. I can acquire many things with Bitcoin today, a lot more than I could 1 year ago and, I predict, I lot less than I can a year from now.
"Bitcoin – just like a proper gold standard – does not allow for discretionary manipulation of the monetary base."
No sale.
"Bitcoin – just like a proper gold standard – does not allow for discretionary manipulation of the monetary base."
This is just nonsense on every level and the collapse of mtgox proves it. Bitcoin is a con, period.
Uh, in what way was the monetary base changed by Mt.Gox apart from a possible boating accident?
Mt.Gox didn't do anything to the monetary base. Unless of course they lost the private keys to the bitcoins they were holding. In that case the remaining bitcoins will be worth more not less. How is bitcoin a con?
The primary purpose of bitcoin today is to goose FX markets without being on official FX markets & that devalues their use for everything else, like buying things.
That means whoever holds bitcoin takes massive 80% losses and can't buy things. Your ONLY purpose now in bitcoins is to put fiat in & get fiat out & to get more out than you put in, by causing others losses, hence the ponzi.
Once you can't find suckerz to join in anew the entire lot drops to zero. Planet-wide.
http://flic.kr/p/kyKgtF This is a presage to the event.
Bitcoin, Bwaaaahaaaa.
Oops, I mean great concept.
Strange place ZH now days. Even they have their own self conforming society. Disagree or present something they have ruled as bad will get automatic childish comments.
ZH are become like the mainstream sheep. I would have thought an always open and critical mind would have been the goal of ZHs.
Now I'm not into bitcoin, have tried the mining, and see the problems it has with stability of price and function. But I'm in the wait and see how it turns out, it might be very useful.
But most of the comments here are simple baby juvenile talk you would see at any MSM site. ZH commenters having moved out of their comfort zones feel the need to fall back into their old sheeple ways when living within the MSM world.
ZH has always been a political correct place, where people who don't support ron-paul or BITCOIN get deleted and banned.
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What's telling on these pathetic posts is that all these users come out with 4+ year old accounts, that have commenting intervals of 2-3 times a year.
It's almost like ZH has 10's of 1000's of accounts just for rocking the boat and driving the herd.
BTC is the opium of ZH, ZH is a religious pack of nutcases.
"Civil intelligent Conversation on ZH", well that would start with inteligent posts to begin with, and given that 99% of posts on ZH are sources from morons and fools, ... all you can say is that ZH is a den of fools that are fed shit.
Just stating the obvious, I know that 'truthiness' will get you banned and/or deleted on ZH, but somebody has to the tell the truth.
Bitcoin never dials the wrong number. You just happen to pick up the wrong phone.
Wow that, and the comments are hard to read.
These bitcoins are illegal in Russia. Illegal in China. That should tell you something about whether or not they are a token that threatens another sort of token.
In other news, gold & silver are somewhat regulated by the blokes mining them, too: out of the ground. The other currencies are made of cheaper stuff like paper so, get this, a lot of people can use them all at once - without being themselves burdensome to produce. So we can get on with farming - mining - skiinstructoring - weaving - TVanchoring: you know, useful endeavours!
As a side note I'm sure I said somewhere that Bitcoin would have copycats, and these entities have even a worse reputation than the big B. Just being first, or first with foothold, counts for something when you're a money. Or a token, whatever you like to call it.
XOE
Here's a question for the ZH floor. And I'm sure it's been answered in the bitcoin forums ad infinitum, but I'm sure someone reading here will have the best answer/resource. Right?
Correct me if I'm wrong, but isn't building a global network of bitcoin mining servers that specialize in essentially brute-forcing hashes until the correct one is guessed, to create the evergrowing bitcoin block-chain in essense creating the worlds largest distributed network of servers specifically capable of breaking encryption problems???
If I understand it correctly, the number of hashes being generated per second now by this hardware is astronomical, where hardware is being built specifically for mining. They're basically computers that are distributed to doing the task of guessing hashes until one of the servers gets it right, and it's awarded bitcoins.
In the hands of the NSA, or CIA, isn't the this the equivalent of having something like SETI that you can pass encryption challenges to by simply slipstreaming them into the "bitcoin" problems they're solving? Thereby using them to break encryption problems on the backs of citizens? Literally?
bitcoin problems only: not encryption problems. It actually has no relationship to cracking other algorithms, for example, those used in PGP. The results can't be cross-applied, not even one.
Yes, the poster sort of assumes that we don't really know.
Let's do a simple explanation of this problem.
Y = F ( X )
Think of 'X' as input, or plain-text, its what us humans read.
Then F( ), is some black box or function or software, F() can be bitcoin, or PGP, or any fucking machine that fucks with numbers.
Y is the output, its what gets passed around, its what the PUBLIC see's.
For every BOX or machine F(), it has its own ALGORITHM, so what the PREV guy is saying here is that if you had a MAP for all X to Y, its dependent upon which machine F() was used.
Good crypto requires that the ENEMY not know what machine your using and not know your 'X'. If the ENEMY knows 2 things, then yeh, if he knows you used PGP, or SHA, or DES, or AES, yes he can use a rain-bow table a map to find out what is your keystring.
In fact this is how wallets are busted, if you have an encrypted WALLET, it can be broken, cuz the guy with a BIG enough RAINBOW-TABLE (MAP), and if he knows that your wallet is using SHA-256, then yes he can most likely break your wallet in a day with a normal PC.
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In summary this shit can be done, but with so many differents crypto-currencys and they all using different algorithms, there is no ONE fucking magic rain-bow table to break them all.
I'm sure there is some snake-oil salesman out there claiming to have such,.... I'm sure there are some bullshit artists at the NSA who claim to have such...
At the end of the day, if you want to KEEP your 'X' secret, you don't ever let them know what "F()" your using.
This is why the NSA forces everyone to use AES, or on BITCOIN SHA-256, then its fucking easy like a 5 minute job to break anything, given they knew your algo.
But say PGP, if you dial it up to a 4096 bit CHUNK, and you run the 'Y' through the machine 'N' times, ... there is no way anybody can break it,... too many unknowns
"Good crypto requires that the ENEMY not know what machine your using and not know your 'X'. If the ENEMY knows 2 things, then yeh, if he knows you used PGP, or SHA, or DES, or AES, yes he can use a rain-bow table a map to find out what is your keystring."
Incorrect.
With PGP you can know everything but the actual private-key string and get nothing. Nothing.
SHA256 bit is ONLY 256 bits. PGP key sizes have been able to hit 8192 bits with difficulty in 1993 and with great ease in 2014. On a 486 it took me 2 minutes to encrypt something with a 4096 bit key so I used a 1024 bit key back then. Again, that was 1993. This is 20 years later. No one should be using bitstrings so short as 256 bits.
Ever.
It's utterly nonsensical. That's only 32 bytes. Put in perspective to alphanumerics:
a-z : 26
A-Z : 26
0-9 : 10 more digits
let's add 15 more symbols ~!@#$%^&*()-=_+
we are now working with a per-digit range of 77 for example, for human-typed passwords. A 256-bit string is equivalent to a 77-variety-digit password no longer than 41 characters. This is child's play for super-computers to crack vs an 8192 bit key which should be the minimum in use for PGP / GPG.
Using the same 77-digit-variety vs 8192 bits is equal to a human-typed password no longer than :
8192 x log 2 / log 77 = 1,307.20903717 so 1308 characters.
TYPED CHARACTERS. When's the last time you used a password 1308 characters long?
"In summary this shit can be done, but with so many differents crypto-currencys and they all using different algorithms, there is no ONE fucking magic rain-bow table to break them all."
Wrong. Again, you must know your hardware. This is called a quantum computer. The key here is to ensure the key-size you use is larger than the largest possible qubit register.
In this case last I heard 14 qubits was verging on the impossible, not only physics but also expense. Supercooled materials near 0K are required.
Once qubit registers can exist matching a given key size those keys can be broken in ONE time slice. All solutions are solved simultaneously for all bitpatterns <= that qubit register size.
2^256 possible private keys.
But the hop down to the public address space leaves 2^160 possible addresses, or:
1,461,501,637,330,900,000,000,000,000,000,000,000,000,000,000,000
The concept is a person could generate private keys at random or sequentially looking for funds and taking them.
However, 2^160 is approximately 54 times more than all atoms in the observable universe. If you were generating addresses at a rate of 1000 trillion per second and you started at the estimated creation of the universe (14 billion years ago) until now. You would currently have generated 0.000000000004% of possible addresses.
Generating address collisions cost computing resources that are more profitably spent mining for the currency instead in practically all scenarios.
except your 2^256 already has a giant exclusion zone for those that do not fit the hash-pattern whereas PGP keys have an entirely different pattern and arbitrary key size. You have to edit the source to compile a copy that can go higher than the maximum but far before you get there, key generation would simply take weeks or more on even the fastest computers today.
I assure you the 32byte key (256 bits) is too small to be secure and we knew that all the way back in 1993 when PGP came out and no one used a key as small as 256 bits. Ever.
With bitcoin it's worse: we know what we're looking for, due to the public leger, so we can skip all the public addresses that are not juicy targets. We can now focus only on the juicy, fat beef-cows and sift the combinations of bits.
ONE dedicated machine that does NOTHING ELSE but this would have it in a few clock cycles. It's only a matter of printing it in a fab & using it.
ONCE PER WALLET.
It's not the amount that's taken that will matter. That's the slap on the ass cheek after the rape.
The rape itself is invalidating the entire bitcoin system for good with that one machine.
A great analogy is the nature of war & having fixed emplacements.
You want to be a sitting duck, thinking your pillbox is impenetrable, while much more versatile systems like GPG flow around you & can adapt size, adapt complexity to changing conditions.
Be like the nature of water - Bruce Lee
In crossing salt-marshes, your sole concern should be to get over them quickly, without any delay - Sun Tzu
Alright super sleuth. This address has $74 million on it at today's exchange rate. Have at it. Or this one if you want to fuck with the FBI. Fire up that trusty old laptop and go to town. Over the past 5 years you might be the first hacker who's ever tried.
Bitcoin signatures use Elliptical Curve DSA. 224-bit ECDSA being equivalent to 2048-bit RSA but less bandwith intensive.
To surmise - both MeelionDollerBogus and satoshi123 are saying that bitcoin private keys of only 256 bits are "not secure enough" and leave bitcoin cold wallet holders, or comprimised exchanges vulnerable.
Yes, there are dozens of services now on the internet that will break a wallet in 24 hours or less for 10% of the contents, and its loved by people who forget their passwords or steal other peoples wallets.
Thank you.
Counter-trolling while using NLP to elicit the most detailed counter-response even if the other party doesn't want to give it is SRS BSNS. And wordy.
Much appreciated.
Your missing my point, if somebody finds my "Y", and they don't know what black-box I used then its impossible to do shit,
Once you know what ALGO I used, then you use that ALGO with a rainbow-table and wait a short time and BOOM you get my 'X'.
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PGP is for honest people, and they're not trying to be high level security, just slightly above the dumbest cop shop in their town.
If your in the BIZ, then you "roll your own", always been this way.
You're an idiot.
PGP / GPG is the most advanced, bitcoin is the least advanced.
You can't keep changing your key size or message content, nor can you use a web of trust model for the keys.
GPG does all that. PGP always has.
You clearly have
Wrong. Again, you must know your hardware. This is called a quantum computer. The key here is to ensure the key-size you use is larger than the largest possible qubit register.
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Wow now we can pull non-existent HW out of our asses to make assertions cool.
There are no quantum computers, its a myth of physics, ... a holy grail not unlike energy from water (perfect fusion),... might it come? Probably not.
I liked you better when you said your were a programmer, but then you jumped over to quantum computers and now I realize your full of shit.
I just told you it does exist. You're an idiot. I told you what the register size is too.
Well your right, but its all more of a matter of after the fact.
Here's the real deal. Your talking a FUCKING minority so fucking small, that if you put all the NERD's mining in a bar, you couldn't fill the bar.
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I played SETI too back in the 1990's and ran that software, but SETI was always a minority of nerds ( computer scientists, ... techies ) who had the horsepower to do such.
Now with BTC mining, it takes an INCREDIBLE game box to mine, but its telling that MT-GOX came out of the GAMING business, and that they became the "BANK OF BITCOIN", ..
Essentially all BTC'ers are GAMER's, which means they are in general anti-social, alone, and sit their asses their entire lives in virtual worlds, which is why its so fucking hard to talk about real world with them or real math, or real software.
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Getting back to your assertion, ... in theory you can have a 'rain-bow table' for every sentence or keyword, so that for every decomposed prime you have a dictionary, which allows to quickly find the password for crack the 'hash' for a particular large number,... but the NSA doesn't need to recruit gamers for this type of thing.
Given that trojan horse software, can be injected worldwide at anytime for any task,... if they wanted this they would just do it, and not need some fucking BITCOIN gamer's computer.
Also if you have the public generate your RAINBOW-TABLE, then it doesn't do you much good, as you always want to have more power than the ENEMY(or little people), ... thus it makes more sense to generate this data and keep it secret, and not let the NERDS have even a smidgeon of the good shit.
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In summary the BTC miners are minority, and now 90% of all mining is done in MINING centers that are huge places with 1000's of ASIC's, these days to make money you need to be doing trillions of hashes a second, and home boxes only do thousand's, or a few million at best.
Mining companys are all being sued now, ... its been game-over for mining for quite a while, the NERDS who will not let go, have long ago moved to litecoin, or lessor known crypto-currencys'.
Acceptable cut and paste job but it's still obvious you're fucking clueless.
In as much as your style is brash, you did address the question head on, and for that, I appreciate it. You make a good argument. That the bitcoin hardware network today dwarfs the distributed computing power accessible to those with the ability to distribute a problem to a broader quantity of hashing hardware via other means or software.
I hope we can agree though, albeit fictitious and certainly not within your worldview, that if bitcoin did evolve, that the mining centers (sic sic, laugh laugh I know) would indeed double nicely as cracking facilities, as the hardware needed to do either (regardless of merit) is identical.
I do like the notion of BTC,and I did spend a lot of time last year mining, and I have read all of the Papers on the subject, I think I mentioned before here that back in the 1970's I worked on DES, so this shit is really old and boring, but I plowed through.
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What I found was that that BTC is not peer to peer, its really peer to CROOK.
IMHO it doesn't matter that the AGLO and SW came from the NSA, its a good start, but what happened is that ASSHOLES took over BTC and fucked it.
Assholes like ..
1.) Mining pools, ... instead of little guys mining,where nobody could have more than 1% of computational power and/or BTC, they created these pools, which quickly allowed ONE-MAN to have 80% of all mining computational power, something that SATOSHI warned against, but human greed won.
2.) Exchanges, ... aka monolithic BTC BANKS like MT-GoX where +60% of all BTC were held by ONE assholes you could fuck his clients and did, for over 1/2 BILLION USD.
Satoshi (ME) in the original paper said, BTC is about TRUST, and trust is NEVER letting one person or one organization have more than 51% of anything.
But sadly like all TECHNOLOGY the assholes at GOOGLE/NSA quickly used their seed money to create COINBASE, or just another BTC bank, ... again once they get the majority ownership of block-chain, or computational power, then its game over for TRUST.
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In summary I will define Peer-to-Peer, nobody should have over 1% of anything, not mining pools, not exchanges, not banks, ... it doesn't work, and humans have proved they can't be trusted with the software.
It's a people problem folks and the people bitcoin.org(wash-dc), who have made themselves the leaders, have destroyed BTC 1.0, lets hope that NONE of the crooks are allowed near BTC 2.0.
The problem is that FREE-SOFTWARE foundation,and people like that need to be making sure that FOR-PROFIT assholes aren't running BTC.
Essentially BTC 2.0 must come from commie anarchists, BTC came from people with good hearts but the ASSHOLES like Winkelvoss, and mt-gox, an HASH-IO, and coinbase, fucked BTC in the ass.
How do we make BTC 2.0 ass-hole free? That is the problem.
This is NOT a technical problem
As I said in an earlier thread, BTC is an idea. It's a good one, and right now perhaps its imperfect, but that should not dissuade people from mutating the good foundation until the correct solution is arrived at. The premise and fundamental assertion of distributing the control of value away from anyone but the two people doing the transaction is an end worth working towards.
The answer is no. Bitcoin miners can do nothing but mine bitcoins. They can not crack any type of encyryption. They are ASICs that do one thing and one thing only, they are not even programmable to do other things. The hardware is absolutely not identical.
A very specific hard to solve puzzle. A problem that scales in difficulty automatically every two weeks depending on available network hashing power. To say that the bitcoin network is SETI-like is misleading. Indeed some say that the tremendous hashing power is wasted on bitcoin mining. But the mining network supports bitcoin's value. And the miners that solve the problems, every ten minutes, are rewarded with newly minted bitcoins.
So to answer your question, no, the work the miners do is not useful to the NSA or any other 3 lettered agency.
Computing a hash is a one-way process. Given a solved hash -- it doesn't yield information about the content that was hashed upon. Bitcoin mining is wasted work, but proof-of-work nevertheless. Here's the infographic about cracking Bitcoin private keys with a Dyson Sphere that VerdoBot [sic] guy has been asking for:
http://i.imgur.com/CzyO1yv.jpg
+ 2^256
Fantastic graphic, thanks, I will make sure to use it.
Dyson Schmyson. His vacuum cleaners break way too easily. If you're out in the galaxy somewhere and develop severe problems with the sphere's veeblefetzer, who ya gonna call? If Dyson Customer Service won't send a vacuum cleaner drive belt to Squatney, you sure as hell can't count on them to ship a new Sqounsch Valve to Alderaan.
Feb. 28th AM, Mt Gox files bankruptcy - btc SPIN OFF
Mar. 2nd, less than 72 hours later public forgets - btc SPIN ON
People are just eff'n stupid.
LOL http://flic.kr/p/kyKgtF
bitcoin is COMEDY gold.
Your funny chart gets funnier the more times you spam this thread with it, HAHAHA!
No, what gets funnier is how many times you obviously saw the truth that bitcoin slammed to under $6 and you keep pretending it's a store of value & a useful currency. It's garbage & you know it. What you don't say is just as important as what you do say.
You know, super sleuth, the media has picked up on reporting the BTC price. Tyler would have reported $6 bitcoins. Show me 1 shred of evidence besides your mspaint.exe chart. It points to the base of a frickin volume bar.
$666
That chart is all the proof one needs. The web site is still live & one can go see the price right on it, still reported.
Just because MtGox decided to erase the 0.01 print, the time BTC crashed to a penny, doesn't mean it didn't happen then. It did. Many youtube videos showed it live, recorded & preserved. MtGox then pulled a NASDAQ undo move & it didn't change the truth.
'sleuth'
Nice. I'm still 100% on top my my NLP & I'm not biting.
So you picked up a boatload of bitcoins under $6?
Int: a currency is a way to transfer money.
This answer the rôle of BTC in relation to Gold&Silver.
If you like fiat as a currency, you can keep your fiat as a currency.
No need for bitching.
Bitcoin is simply fiat by a politically neutral party (the cryptographic process). It does nothing to solve the inherent value of fiat (zero) problem.
The overwhelming majority of golds market value comes from it's monetary properites not it's uses as a general commodity. I can't recall the exact number but I believe it was in the ballpark of 95%. Bitcoin has these same monetary properties and then some. So based on what you are saying either bitcoin has value or gold is grossly overvalued.
Bitcoin is simply a pyramid scheme. One time mining of coins allows a percentage of ownership that does not go down because the quantity outstanding never increases. According to some, the plan is for the current number of bitcoins to support the entire economy. So if I somehow managed to own 2% of bitcoins outstanding now, then I would eventually have the net worth of 2% of the entire economy going forward. So that $10 of electricity has allowed me to become one of the wealthiest people in the world. I just can’t see how that makes any sense at all. Of course if I was sitting on a bunch of bitcoins I would want that to happen.
If this all does unfold it would be retarded for anyone to ever spend any Bitcoins. In that case it would also mean it would be a lousy medium of exchange, xcept in limited circumtances.
It makes perfect sense to the criminals and con men who started this crap.
"retarded for anyone to ever spend any Bitcoins"
This argument is disproved over and over again. People have been spending bitcoin at an ever increasing rate since the early days when bitcoins were fractions of a penny until now when they are at $600.
I hope you aren't suggesting that things can't happen because they don't seem to "make any sense at all". You would only have to open your eyes and look around to see that that is certainly not the case.
Bitcoin needs faith but gold and silver have weight.
Should be the ZH creed ..
"In GOLD WE TRUST, all other's take BITCOIN"
Yep, anytime somebody tell's you that you have to have 'faith', you know that your being sold a religion.
NOPE, ... Satoshi never said shit about "FAITH", he talked about "TRUST", and its funny you never here anyone on ZH talk about TRUST.
Most likely that given ZH has its roots in Goldman Sachs, and their world-view is MUPPET-FUCKING, ... how could expect trust in this forum, or even a shallow understanding of such.
There is no part of trust that resides outside of faith.
There is no part of good money that can rely on trust.
Poop shares with gold the property of having weight.
And poop exceeds bitcoin in having actual intrinsic value: fertilizer. Bitcoin can't even do that right.
The only thing bitcoin can do http://flic.kr/p/kyKgtF is smash from 1200 to $5.76
Adults who put the words Intrinsic and Value next to each other shouldn't be permitted a driving license. Be safe out there y'all, there are some real idiots on them there streets.
Adults who use "intrinsic value" are real adults.
Everyone else is a child pretending to be all grown up, a 5 year old putting on daddy's work shoes or in your case, trying to drink from mommy's 60 oz rum bottle and not yet strong enough to lift it.
Intrinsic Value -it's what's for dinner.
Bit-chez.
Im convinced most, if not all, of these bitcoin fetishists would like nothing more than a bitcoin shaped appropriately , inserted, repeatly.
Im not paying you imbeciles for a medium of exchange. You pay me to take it.
Mt Gox, run by a fat man, who probably ATE the fucking coins.
For the vast majority, the future is only comprehensible when its in the rear view mirror. If you want to build and retain wealth, you need to able to see over the next horizon - that requires imagination, critical thought and an agnostic approach - all in short supply everywhere.
Instead of working things out themselves - people want someone to tell them the answer - and luckily there will always be someone ready to give you an answer, that benefits them.
The only thing amazing about btc is that people are willing to pay good money for it.
I can see why you don't understand bitcoins now. You just called government issued fiat currency "good money", lol.
it's the only money people have so when they give it up for bitcoin they are left with nothing.
Good money is gold & silver, the only proper choice to dispose of dollars.
Yeah bitcoin is gold. Okay.
ok, I have seen the light, and porn masturbation is same as sex with a real women, ... I have seen the bitcoin light.
Bitcoin is proof that morons, can be sold shit, that they will eat the shit, and sell it to others and talk shit all the way to the bank.
If you think that virtual sex, is the same as real-sex, then yes you and bitcoin deserve each other. :)
2 bitcoins 1 cup
Retitle it
"Bitcoin Is Pornographic Gold"
In my view, Bitcoin as a monetary concept is potentially a work of genius, and even if Bitcoin were to fail in its present incarnation – a scenario that I cannot exclude but that I consider exceedingly unlikely – the concept itself is too powerful to be ignored or even suppressed in the long run.
Really? How much are your bennie babies and 1987 fleer Barry Bonds rookie cards wroth? Oh and Spiderman #1 comics from 1991? Shitcoin will fall to it's real value...ZER0!
Yes, because all of the examples you listed totally weren't issued by a single entity, or counterfietable, none of them were degradeable, all divisible and fungible, and they could all be transacted instantly across the world. Right? Actually I don't think any of those items were attempting to be currencies. Good try though.
Essentially BTC 2.0 must come from commie anarchists, BTC came from people with good hearts but the ASSHOLES like Winkelvoss, and mt-gox, an HASH-IO, and coinbase, fucked BTC in the ass.
How do we make BTC 2.0 ass-hole free? That is the problem.
This is NOT a technical problem
tWinkelvoss were just getting even.
It's called Dogecoin. You would fit right in.
That's funny. He sounds like he's fresh off the boat from Reddit/r/bitcoin.
Sounds like you are afraid of free markets and would prefer much more powerfull and smarter men than yourself to protect and regulate you. Perhaps you should look into the USD as your currency of choice. I hear no large businesses ever fail and everyone is assured to be insured who uses USD.
btc , after all the wasted words and wasted computing power, would have to print $10,000 each to just break even.
Shhhh. You been having private conversations with the miners?
Funny how many people deride technology (er, on a website) and google... and then provide a youtube link.
Anybody that clicks on a GOOGLE youtube link, is the same kind of guy that puts his dick in fonestar's mouth or ass without a condom.
Deriding badly made technology which promotes fail & poses as money, which is not an electronic technology & can't ever be, is not making fun of all technology.
It's making fun of Fail that's posing as technology.
GPG / PGP can do what bitcoin does with almost no overhead and more reliability.
Bitcoin uses public/private key signatures, same tech as GPG. Hey, good luck to you solving the Byzantine Generals Problem without the blockchain.
Doesn't even matter. The wallets aren't secure enough and the blockchain is growing too fast to be maintained.
Dollars don't use blockchains.
This is good.
Gold doesn't use blockchains.
This is good.
The worst possible way to avoid double-spending is to use a blockchain.
Visa revolving credit doesn't use a blockchain & double-spending doesn't happen there either.
Bitcoin iz fail.
It's simply not my money of choice. But if you think it might be yours, go fetch it...
Im glad somebody else is finally getting it
Bitcoin has never been, and will never be a currency, it is an asset.
If you don't really know what a bitcoin is...or need to explain it to someone, who won't hate you afterward.
Think of it this way...
Internet Email replaced the post office
Internet Google replaced Libraries
Bitcoin is the first "Internet unit/asset of trust exchange" for ANYTHING we want to trade/buy from each other, or assign value to, and it is owned by all of mankind equally.
What many people really don't get yet is Bitcoin/Litecoin are the worlds first, very liquid, average persons, commodity/asset of exchange and, complete trust system, that doesn't need any governments or banks to exist and it's impact on the lives of the average person will be way bigger then the internet.
Here is how you permanently stop all political/government/big bank control with bitcoin/litecoin.. we can also free all of the worlds debt slaves = 99% of population!
New universal and local exchanges must marry BTC/LTC ( which is really a form of an asset not a currency or money ) with gold/silver/commodities It will lead to a grand new world reserve liquid trading commodity vehicle (not currency ) ... and eliminate ALL potential regulation problems with bitcoin/Litecoin being equated to one, or any fiat government currency, taking the power completly away from all of the despots and psychopaths who control all things financial for their own gain.
One day (hopefully soon) , when a hard working person in Somalia ( or name impoverished country here ) receives the same pay as as anyone else in the world, doing the exact same job he/she is doing and then can take what he/she made and buy some rice at the same price ( all shipping handling for entire world is priced in ) with that same universal currency/asset he/she earned there will be no more poverty anywhere.
This will also give bitcoins/Litecoins value and gold/silver/commodities liquidity and bypass all fiat currencies in the world taking away power from the top 85 families on the planet that have the same assets as the bottom 3.5 billion people. ( and 10's of thousands of others ripping people off everywhere)
This also solves the problem of not much liquidity for the easy transfer and payment using actual pieces of gold/ silver / commodities over the internet ..... now their value is transferable to btc/ltc, which is easily exchanged anywhere for everything starting with the most important thing wages for employment.
The way to move the whole thing forward is a worldwide UMX exchange and hundreds of local smaller ones, (2 companies are even developing cheap satellite coms for bitcoin servers ) for gold and silver weights and commodities , not US dollars, CDN dollars, or any other dollars, to be exchanged/traded for btc/ltc.
You can use small shops everywhere, in small communities, in every country in the world, like a current cash shop, pawn broker, grocer or gold/jewelry dealer that fronts all of the small trading for everyone. So you give them some gold or silver commodities etc and they give you btc/ltc or you give them btc/ltc and they give you gold silver commodities based on current gold/btc exchange rates on the UMX..
All 3 things cant be touched by megalomaniacs and are outside of "world money regulation/phantom creation" BTC and even LTC is the same as precious metals in many ways, it has a finite amount available over time, cannot be "printed" into oblivion, must be mined and is a store of wealth and no one individual or group owns the system, it belongs to everyone.
The numbers make sense..if you look at fractional bitcoin system the numbers more then make sense... each btc can be broken down to units that equal .00000001 so There are really 2,099,999,997,690,000 (just over 2 quadrillion) maximum possible units in the total maximum bitcoin design. The value of "1 BTC" represents 100,000,000 of these. There is only around an actual 1 trillion in printed usd $ around and currently 60+ trillion in total US debt http://www.usdebtclock.org/ (not including unfunded liabilities ) So there is, or will be by the year 2140 (end of bitcoin mining), 2000 times more exchangeable bitcoin units then us$ in the world and then there are no more BTC.
Mbtc (1/1000 of a BTC has already shown up on hundreds of sites, including redit where people are tipping others for good ideas, music etc. via phones or comps...
As more gold mined down the road it will just change the exchange value slightly ..but,unlike "make believe" money, (only .52% of the Bank of Canada's money is real, 1.75%in at the Fed and the average is .75% in all the central European banks ) .....both gold/silver and bitcoins/silver/commodities have physical limits on total in existence and are very real.
When they let you out, please stay home and rest. We wish your recovery well. But do shut up all the BS on Bitcoins.
Bitcoin , Bit-chez ..
$5.76 http://flic.kr/p/kyKgtF bit-chez! That's what bit coin dropped to.
Let Tyler do it. Without enforcement and reciproprocity there is no confidence. We only believe when there is big time fraud like the FED. Not very useful.
What's the best place to buy my first coin?
For small amounts I'd suggest localbitcoins.com or craigslist. Some large cities have bitcoin meetups where they discuss bitcoin and you could probably purchase some there.
This is why we need a direct link between physical gold and digital gold (bitcoin). bullionbitcoin.com has just launched as the world's first gold to bitcoin exchange, with no fiat currency link or fiat bank accounts. A direct link between bitcoin and gold re-monetises physical gold, enabling global electronic transmission of bullion, whilst creating a tangible monetary portal for bitcoin outside the fiat based financial system.
worth a try. I won't touch it but anyone already stuck with bitcoin should consider gold is real, bitcoin is digits. See how it turns out.
Wouldn't that just be heaping all the existing problems of trading bullion (storage,transport,security,authenticity etc) onto the satisfactorily functioning bitcoin network? It would be introducing a counterparty risk where none is really needed.
Gold and silver are a good form of money and they are useful in some circumstances.
Bitcoin is a good form of money and is useful in some other circumstances.
You join them and you have all the disadvantages and none of the advantages.
Let them be distinct form of money and retain their usefulness.
Gold and silver are a good form of money and they are useful in some circumstances.
Bitcoin is a good form of money and is useful in some other circumstances.
You join them and you have all the disadvantages and none of the advantages.
Let them be distinct form of money and retain their usefulness.
Indeed, combine the two and you have the XAU currency on the ripple network. XAU transacts faster than Bitcoin and 1 XAU is backed by 1 oz of investment grade gold. www.ripplesingapore.com issues the XAU on ripple and the reserves are stored in a professional vault in Singapore.
I have often thought that electronically represented gold, where the 'coin' could not be issued unless the physical metal were stored, would be the most stable, but that goes to the problem of trust in the issuing authority, and its immunity from government seizure.
BitCoin only resembles gold in that it has a constrained supply, which resembles precious metals in the increasing difficulty of mining the next ounce.
The flip side of that is the fact that there is no underlying precious substance. It may not inflate like a fiat currency, BUT it can be subject to wild swings in value relative to reality like a stock.
Just imagine that PayPal required you to convert all your payments into PayPal stock certificates, and required merchants to accept them. Now you do not have a reliable store of value or medium of exchange, but a volatile one. Potentially, the volatility would increase, as the value of the stock certificates would depend on the demand for the service.
Thus the conundrum of BitCoin: it may be Unforgeable and Uninflatable, but it is also Unstable.