Bitcoins

paddyrg

JohnRo wrote: »

Transcend national boundaries, parasitic middle men, exchange rates, politically motivated and centrally controlled manipulation, counterfeiting and wealth transfer theft.

• Dollars and Euros transcend national boundaries pretty well,
• MTGox and SR platform are the same middle-men in a different currency space,
• Exchange rates well $1=$1, €1=€1, BTC1=BTC1 nothing novel there.
• Manipulation - nothing inherent in BTC to prevent that. In fact if it becomes widely accepted, it'll be as manipulated by speculators as any other tulip bulb or currency. Threaten a few governments, you'll see it becoming controlled and taxed, or even just outlawed in certain jurisdictions. Especially as its major use is illicit goods and services and tax-dodging. Those taxes pay for the sovereign state, defence, hospitals, etc., let's point out the obvious.
• Counterfeiting - this is just not proven, not proven impossible. How many other impossible things do people achieve with enough motivation? One unknown guy in Japan vs the whole world - he may have developed the ONLY perfect thing in the known universe, or there is a slim chance he is human.
• Wealth transfer theft - do you regularly get bank transfers interrupted and stolen? Does anyone? Possibly excluding people in illicit industries when they get accounts seized. Again big whoop for criminals, meh for everyone else

Can't say you've convinced me, but I'm still willing to hear how those things are somehow unique and special. Genuinely, convince me. I'll be a great advocate if I am, I'm just not at the moment.

It's incorruptible and very unlikely the FBI will be releasing anything until they've had time to apply some extensive enhanced interrogation techniques and obtain the key to their swag.

Incorruptible vs hasn't been corrupted yet. Not that it means a whole heap either way as we're talking abuot the meat realm, DPR has already shown himself to be on the good side of average in structuring his accounts, usernames etc. I suspect the FBI are in a good position to bargain or threaten the keys from him.

** perhaps worth pointing out, if there's a copy of the SR wallet elsewhere and the key holder decides to empty it then the FBI won't be holding anything but a copy of an empty wallet.

That would be amusing, but a bit risky to rob $27M from the FBI who are actively looking out to connect other people with this incident! It does relate to an interesting wider point of if the FBI decide to sell $27M of big numbers, whether that means the US Govt formally recognise it as of value. If it does, that's a step closer to becomign a recognised currency, and a step closer to taxation. Remember Al Capone wasn't busted for his rackets, but for tax evasion!

paddyrg

padington wrote: »

Have the FBI managed to crack the code to be able to access these coins they found ? The price went shooting up the moment it was declared they couldn't crack them and never came back down from what I saw, so I presumed they effectively have the map with no X marking the spot ... Yet.

Good question. Do the FBI have any leverage over DPR? Just a bit! I suspect meat-world techniques could be the shortcut to this conundrum.

[Deleted User]

As of yesterday the FBI have taken control of the SR fortune: http://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-says-its-seized-20-million-in-bitcoins-from-ross-ulbricht-alleged-owner-of-silk-road/

here is the address containing the BTC: https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH (you'll have to scroll past the dumb spam transactions that people have made to advertise).

Trivia: the inbound transactions were all for 324 BTC... which spells FBI when using a phone keypad.

JohnRo

Blimey, that's a lot to chew on.

paddyrg wrote: »

[*]Dollars and Euros transcend national boundaries pretty well.

No they don't, obviously in some narrow situations with these two particular currencies and certain boundaries they do to a large extent but globally they're very limited. In all cases they incur fees and costs, sometimes excessive, that btc would in a similar situation be free from. You need to try standing in others shoes as well as your own to see the potential benefit globally. Of course if you're into exploitation of others that's a problem.

[*]MTGox and SR platform are the same middle-men in a different currency space,

Of course but in the global p2p space they're simply two well publicised choices. Neither is/was particularly good at what they do and neither is a necessity in any way for btc trade.

[*]Exchange rates well $1=$1, €1=€1, BTC1=BTC1 nothing novel there.

That looks like a red herring to me. Fiat will increasingly become an irrelevance if the concept continues to gain traction. Which is clearly where the risk to its future lies.

[*]Manipulation - nothing inherent in BTC to prevent that.

Of course there is, the block chain ensures the integrity of the currency and all transactions, for all to see.

In fact if it becomes widely accepted, it'll be as manipulated by speculators as any other tulip bulb or currency.

Already happening, hasn't affected btc. The more widely accepted it is the less effect that will have.

Threaten a few governments, you'll see it becoming controlled and taxed, or even just outlawed in certain jurisdictions.

http://techcrunch.com/2013/08/19/germany-recognizes-bitcoin-as-private-money-sales-tax-coming-soon/

Especially as its major use is illicit goods and services and tax-dodging. Those taxes pay for the sovereign state, defence, hospitals, etc., let's point out the obvious.

It's evil, evil I tell you.. fiat is used to do all those things too and a whole lot more. Taxation is what it is.

[*]Counterfeiting - this is just not proven, not proven impossible. How many other impossible things do people achieve with enough motivation? One unknown guy in Japan vs the whole world - he may have developed the ONLY perfect thing in the known universe, or there is a slim chance he is human.

I think you're conflating perfect with static or something else, not quite sure what that means. There are lots of perfect solutions in the mathematical sphere.

[*]Wealth transfer theft - do you regularly get bank transfers interrupted and stolen? Does anyone? Possibly excluding people in illicit industries when they get accounts seized. Again big whoop for criminals, meh for everyone else

I'm talking about the inherent wealth transfer contained in fiat tickets, from those forced to work for and use the monopoly money, to those who control and print it.

Can't say you've convinced me, but I'm still willing to hear how those things are somehow unique and special. Genuinely, convince me. I'll be a great advocate if I am, I'm just not at the moment.

Not trying to convince anyone of anything, you make your own mind up. All I'd ask is that people actually try to understand what btc is before launching into emotive and ill informed rants against btc or those who point out a few things they'd rather not hear.

I suspect the crypto-currency genie is out of the bottle and this can't be stopped, only time will tell. What I'm certain of is that the corrupt and rapidly collapsing fiat currency monopoly and the profiteers running it have a battle on their hands to preserve the privileges they've paid governments to provide at everyone else's expense.

paddyrg

JohnRo wrote: »

...in some narrow situations with these two particular currencies and certain boundaries they do to a large extent but globally they're very limited.

Hey, I can order stuff from China in USD, I can go to rural India with EUR (even places without technology), and so those two currencies seem to do pretty well. Not sure I'm exploiting anyone there if we mutually choose those paper tokens as an exchange.

Of course but in the global p2p space they're simply two well publicised choices. Neither is/was particularly good at what they do and neither is a necessity in any way for btc trade.

Agreed, however BTC isn't in any way different in that respect - if the problem is middle men taking a slice, they'll always find a way.

That looks like a red herring to me. Fiat will increasingly become an irrelevance if the concept continues to gain traction. Which is clearly where the risk to its future lies.

That was about exchange rates which you said were eliminated with BTC (or at least that BTC wouldn't suffer them?). No currency suffers exchange rates with itself, only when changing out to another one. If I've misunderstood what you meant, please help.

Of course there is, the block chain ensures the integrity of the currency and all transactions, for all to see.

Hands up! I don't get the implementation level details, but also don't understand how that prevents manipulation other than an audit trail for anyone who wants to dig through it. And messing with audit trails isn't the same as preventing manipulation.

Already happening, hasn't affected btc. The more widely accepted it is the less effect that will have.

I guess we'll see. You may be right. I think it has affected BTC with the highly unstable exchange rates it's seen, however maybe you're right and it'll be rock solid once all the numbers in the numberspace have been calculated. Certainly interesting to watch.

Tax, yeah, it's coming it seems we agree. That means government-level control/interference in some way, not the panacea of transcending nation/political manipulation as a unique feature of BTC over any other currency. Sure, probably manipulated differently in each territory, but so are current currencies.

I think you're conflating perfect with static or something else, not quite sure what that means. There are lots of perfect solutions in the mathematical sphere.

Yep, maths is pretty neat (my best understatement), but we're in a meat world. Implementations are made in a flawed, human world. Implementations are where the perfect theories get flaws. If we're talking hundreds of millions of dollars, someone somewhere is going to want to find those flaws.

I'm talking about the inherent wealth transfer contained in fiat tickets, from those forced to work for and use the monopoly money, to those who control and print it.

BTC is surely just as 'monopoly' as other currencies? Just as fiat? Except without the backing of governements with which it competes, possibly even more nebulous. And useless(? or of limited use?) if you're not wired (rural India, festivals, network outages). Of course those networks need to keep running, which ultimately requires resources and energy, very physical realm things that are still going to be priced in nation-backed currencies as they come out of nations.

All I'd ask is that people actually try to understand what btc is before launching into emotive and ill informed rants against btc or those who point out a few things they'd rather not hear.

I do hope my rants are not too emotive, but based on real consideration. You may disagree, but I'm not scaremongering so much as failing to be impressed as to what is the unique thing that makes BTC actually much better than any other currency. It's a swappable token that some people collect and others don't even recognise. Its future is in the hands of the collectors convincing the bemused that it is something they should be into. Nobody's convinced me of that yet, beyond the fact that yep, it's pretty clever, but it's a swappable token like gold, USD, etc which we use to represent value. Maybe there are some outlier idealistic benefits of we were all using it instead of other tokens, but it will never replace the other tokens so at best always be marginal.

It would be interesting if Greece or Italy went to BTC instead of EUR or their own sovereign currencies - somewhat unlikely at the moment, but it would put the cat amongst the pigeons.

JohnRo

This monopoly thing is what interests me, the rest isn't really that important. At least not at this stage in btc development. It's obvious if it is to survive there are aspects of how it is used that will probably need to change, unless people everywhere decide they want it to dominate.

BTC is surely just as 'monopoly' as other currencies? Just as fiat? Except without the backing of governements with which it competes, possibly even more nebulous.

What is it about btc that you see as a monopoly? How can a currency that isn't owned and controlled by anyone but whose integrity is maintained and preserved by everyone who holds and uses be described as a monopoly?

No one can arbitrarily debase or invent btc unlike fiat currency, to do anything, much less boost their personal bank balance to pay off debt and make everyone else holding it absorb the cost.

I believe the use of bitcoin exploded in Cyprus when the banksters began to threaten blatant confiscation, which had some significant effects on its "price".

[Deleted User]

paddyrg wrote: »

I don't get the implementation level details, but also don't understand how that prevents manipulation other than an audit trail for anyone who wants to dig through it. And messing with audit trails isn't the same as preventing manipulation.

Think of how a bank works. A bank has a central database that contains a list of accounts and their balances. If your balance is £1,000 and a transaction for £100 happens, your balance is updated to £900 and the bank now knows you have a balance of £900.

There is no way that you could change your balance to £10,000 without £9,100 being paid into your account, because the only way to change your balance is through a transaction.

The blockchain is basically a distributed version of a banks database. Every single transaction is recorded (and available publicly) and every single node in the network has access to that. Every time a transaction happens the network verifies that the transaction is able to be completed (based on all previous transactions to/from the wallet, which verifies that the wallet has the balance to spend).

Manipulation is not impossible because integrity of the network is what drives the trustworthiness of confirmations (proof that a transaction has taken place). If someone was able to take over 51% of the Bitcoin network (called a 51% attack) they could plausibly "fake" a transaction. This becomes less and less of a concern as the network grows (it would cost hundreds of millions to execute an attack based on current network size and this will only grow as Bitcoin becomes more used) but yes, manipulation is possible, just like it's possible someone could bypass all of a banks internal safe guards and create fictional transactions.

Bitcoin is difficult to explain in forum posts and it's very easy for things to be misexplained or come across poorly, therefore it's very much worth your while (and anyone else looking at Bitcoin) to look at the background of how everything works, because it is interesting and will answer a lot of common concerns. There are some really smart people that have looked at Bitcoin, and while claiming it's infallible would be ridiculous, it's a very well designed system.

Start here: http://bitcoin.org/en/how-it-works or here: http://www.bbc.co.uk/news/technology-24384897

paddyrg

JohnRo wrote: »

This monopoly thing is what interests me, the rest isn't really that important. At least not at this stage in btc development. It's obvious if it is to survive there are aspects of how it is used that will probably need to change, unless people everywhere decide they want it to dominate.



What is it about btc that you see as a monopoly? How can a currency that isn't owned and controlled by anyone but whose integrity is maintained and preserved by everyone who holds and uses be described as a monopoly?

No one can arbitrarily debase or invent btc unlike fiat currency, to do anything, much less boost their personal bank balance to pay off debt and make everyone else holding it absorb the cost.

I believe the use of bitcoin exploded in Cyprus when the banksters began to threaten blatant confiscation, which had some significant effects on its "price".

I was using monopoly in the same sense as you did...

I'm talking about the inherent wealth transfer contained in fiat tickets, from those forced to work for and use the monopoly money, to those who control and print it.

paddyrg

citricsquid wrote: »

Think of how a bank works. A bank has a central database that contains a list of accounts and their balances. If your balance is £1,000 and a transaction for £100 happens, your balance is updated to £900 and the bank now knows you have a balance of £900.

There is no way that you could change your balance to £10,000 without £9,100 being paid into your account, because the only way to change your balance is through a transaction.

The blockchain is basically a distributed version of a banks database. Every single transaction is recorded (and available publicly) and every single node in the network has access to that. Every time a transaction happens the network verifies that the transaction is able to be completed (based on all previous transactions to/from the wallet, which verifies that the wallet has the balance to spend).

Manipulation is not impossible because integrity of the network is what drives the trustworthiness of confirmations (proof that a transaction has taken place). If someone was able to take over 51% of the Bitcoin network (called a 51% attack) they could plausibly "fake" a transaction. This becomes less and less of a concern as the network grows (it would cost hundreds of millions to execute an attack based on current network size and this will only grow as Bitcoin becomes more used) but yes, manipulation is possible, just like it's possible someone could bypass all of a banks internal safe guards and create fictional transactions.

Bitcoin is difficult to explain in forum posts and it's very easy for things to be misexplained or come across poorly, therefore it's very much worth your while (and anyone else looking at Bitcoin) to look at the background of how everything works, because it is interesting and will answer a lot of common concerns. There are some really smart people that have looked at Bitcoin, and while claiming it's infallible would be ridiculous, it's a very well designed system.

Start here: http://bitcoin.org/en/how-it-works or here: http://www.bbc.co.uk/news/technology-24384897

Cheers, I'm sure some very good brains have examined it or we wouldn't be discussing it now already. My drive above is more related to the fact that man made systems are fallible, this is tough to break from the sounds of things, but not impossible. I guess another attack would be how to knock out a major percentage of peers in one go (say a trojan that knocks out just one port or wallet system) then floods the rest of the network with low-value peers. Just thinking aloud as nothing is completely secure in asymmetric encryption world. It can be very hard to break something, but that's not the same as impossible. We used to use 40 bit encryption for SSL, for instance.

Banks do also make errors, people make errors, look at the techie or loans or consumer rights forums on this site, people don't conform to pure logic and good systems. The spongy, meaty human aspect is a far greater risk than the maths itself.

paddyrg

I'm not sure I'm making my reservations and reasoning terribly clear. I'll try to distill to just the core, and see if I make more sense...

The maths is almost certainly excellent. Maths can be, it doesn't care about the physical world at a lumbering human level. To implement the maths you rely on a chain of unknowns. You either take on trust that the maths, software model, implementation, operating systems, security, signing chain of authority, network, peers, every router and hub and server in the path are honest and bug-free, or have a reservation that some well have flaws. I'm in 'camp flaws'.

Every bit of software I've ever written was beautiful and perfect until it wasn't. Enigma was uncrackable, until it wasn't. Atoms were the smallest particles until they weren't. Carbon came in 2 flavours until it didn't.

As such we must allow for the human world even without malice to get things wrong. We never implement perfection. Entropy is against us. We're the interface between mismatching analogue and digital world. Add some greed, corruption and self interest into the mix and the scope for problems grows. I don't doubt the maths, I doubt the whole societal and political landscape it has to exist within. That's where it'll get abused and I personally suspect just become a speculation bubble.

I'd be interested in setting where the concept can go next. Right now the network is a core feature of the currency, whereas cash, notes etc are offline, and that's their strength. If it can (by a smarter mathematician than me) move towards asynchronous offline transactions it could be much more portable and possibly be of use in countries where there isn't an infrastructure of connected devices to marshal it all. Mind you, almost all transactions are actually local, so local currencies are still the most appropriate tokens likely as not.

So, with the news of another wallet believed to be SR-linked and under close observation containing another 100000-odd BTC, if taken that would increase the FBI's holding to over 5% of the current number space. As it is, they control 3.25% according to the tech press. That's a lot. Interesting times.