Bitcoins

csm888

Marazan wrote: »

This is horrifyingly naive. All that it takes to break Bitcoin is some entity deciding to purchase enough computing power to execute a 51% attack.

"But..." you are saying "that would require a vast amount of computing power". Yes it would, but if the financial benefits of doing so are high enough then even paying the commercial rates of Amazon EC2 pricing to rent out enough computing power to commit a sustained and continuous double spend attack would become worthwhile.

The whole of the Amazon EC2 could'n t even make a small dent in the current hash rate, only a government prepared to spend millions on custom ASIC chips could take it down.

csm888

Tweaker wrote: »

Where does the $7bn figure come from?

Market Value of each Bitcoin * number of bitcoins in circulation.

Marazan

dryhat wrote: »

Oh, please, not this again.

Are you denying that Bitcoin uses a majority voting mechanism for determine the consensual version of reality that the network approves? Are you denying that a 51% ownership of the networking power would allow the attackers to define their version of Bitcoin reality which would allow, for example, double spend attacks? Are you denying that there are theoretical price points for Bitcoins that would make a 51% attack pay back the cost of the computer hardware necessary to perform the attack?

BoracicLint

Tweaker wrote: »

You seem to like putting words in to my mouth, most of what you have said I made no comment on, incidentally If you had read what I said, I made no mention of gold being the backbone of sterling, only that gold by is held by governments in reserve as a trust mechanism for international currency trading.

The security of BitCoins is unproven because it isn't subject to financial regulation, any conman is always going to tell you to trust them, they are not going to acknowledge the flaws in their system.

I didn't mention anything about BitCoin thefts or it's security, my argument is simple it is fantasy money and buying it is nothing more than gambling.

If it was any good currency traders would be tripping over themselves to buy in to it.

I'm not putting words into your mouth, your comment regarding bitcoin having nothing backing it, implies that sterling or dollars does have something backing it. If confidence in sterling dropped, its value would plummet irrespective of how much gold the bank of england has locked away.

The security is proven, its essentially the same technology that credit card companies rely on to make billions of transactions everyday. As I said in previous posts, anyone can hold bitcoins without putting their trust in an online server, as the saying goes 'a fool and his money are soon parted'

csm888

Tweaker wrote: »

What I mean is who compiled that figure and how can you trust it to be accurate or truthful?

The calculation is the same way companies calculate market cap.
The price is from an exchange where you can buy and sell coins (its current at $634 per coin from mtgox)
The number of coins in circulation is viewable from the block chain and is reported widely.

Which part do you dispute, the number of coins in circulation or the price of a coin, or is it the calculation itself?

BoracicLint

Marazan wrote: »

Are you denying that Bitcoin uses a majority voting mechanism for determine the consensual version of reality that the network approves? Are you denying that a 51% ownership of the networking power would allow the attackers to define their version of Bitcoin reality which would allow, for example, double spend attacks? Are you denying that there are theoretical price points for Bitcoins that would make a 51% attack pay back the cost of the computer hardware necessary to perform the attack?

How would you get 51% of the miners though? It's not about networking power, this implies that if I built a powerful enough computer I could somehow achieve this on my own. This is not possible.

Its about 51% of the miners verifying the bogus encryption in the block chain, therefore creating a fork in the chain.

The probability of this being possible is negligible, the incentive is for miners to verify the blockchain as this rewards them in bitcoins, to systematically try and destroy the blockchain would be destroying the very essence of it, like cutting your nose off to spite your face.

Marazan

csm888 wrote: »

The calculation is the same way companies calculate market cap.
The price is from an exchange where you can buy and sell coins (its current at $634 per coin from mtgox)
The number of coins in circulation is viewable from the block chain and is reported widely.

That is a purely notional $634 per bitcoin given that MtGox is limited to 10 USD wire transfers per day. How long is the wait to withdraw money from MtGox 6 weeks I think is what they advertised but I've read people are currently waiting around 8 weeks minimum.

Marazan

BoracicLint wrote: »

How would you get 51% of the miners though?

By buying/renting enough hardware to be 51% of the miners. The point is to get in with your 51% of evil mining power, double spend like a mofo and then get out.

csm888

Marazan wrote: »

That is a purely notional $634 per bitcoin given that MtGox is limited to 10 USD wire transfers per day. How long is the wait to withdraw money from MtGox 6 weeks I think is what they advertised but I've read people are currently waiting around 8 weeks minimum.

You are clutching at straws here. Lets use another market bitstamp
Its $544 per coin, not really much difference for our purposes is it.

Bitstamp $543
MtGox $648
BTChina $672
BTC-E $557

Lots of action today on the markets, but the price is in the same ball park, and only changes the value by about 20%

BoracicLint

Tweaker wrote: »

Sorry I wasn't referring to computer security, I was referring to the security of assets, have you ever read what it says on paper sterling 'To pay the bearer on demand", paper money is just a convenient alternative to lugging around gold coins, the banks must have assets to teh value of that money, whilst our monetary system has evolved to a point you cannot walk into a bank and insist on gold the bank must still be able to have something tangible in it's place.

The government covers the cost of a bank default by taking what the bank owns physically, a lot of banks these days hold reserves that are made up of artworks, property and even in some cases they hold classic cars in vaults as security against the money in your pocket.

And what tangible assets back BitCoins that gives it value other than a geeks wet dream that someday they will be rich and stick it to the man.

I'm sorry, but you are incorrect. The promise on your bank notes means nothing. The last gold surge of 2011 was driven in part because the amount of 'paper' gold in circulation exceeded the physical reserves of it.

Britain dropped the gold standard in 1931, our currency along with the USD/EURO and most others is a fiat currency. That is a currency which has zero intrinsic value,