Bitcoins

csm888

Marazan wrote: »

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.

No dispute, It's theoretically possible but becoming more and more difficult.
The current estimate cost for a 51% attack from (coinometrics)
if $1.4Billion, that rules out most organisations and governments.

csm888

Tweaker wrote: »

I was enquiring because I didn't know where the figure came from, so why should we trust mtgox, as I have said a currency of any kind must have some tangible asset to support it's value and it doesn't.

Because the value of anything can be determine by the price someone is prepared to pay for it. MTGOX (and the other exchanges) allow for the sale and purchase of Bitcoins, therefore it's the best place to get a price from.
If you wanted to sell a bitcoin of several 1000 of them you could do it on MtGox and get around about $600 per coin, you can then transfer the money (caveat: MTGOX has transfer issues, other exchanges don't) to your bank account.

Marazan

csm888 wrote: »

No dispute, It's theoretically possible but becoming more and more difficult.
The current estimate cost for a 51% attack from (coinometrics)
if $1.4Billion, that rules out most organisations and governments.

Governments can't afford $1.4billion? That's like less than a sixth of a percent of the UK Governments income.

That's not even an anything percent of the US's income.

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.

But how can you possibly hold reserves, if you can print money infinitely? The money has no value if the bank of england can keep printing more of it. This is one of the benefits of bitcoin, as it can't be created out of thin air. There will only ever be 21 million coins in existence.

BoracicLint

Marazan wrote: »

Governments can't afford $1.4billion? That's like less than a sixth of a percent of the UK Governments income.

That's not even an anything percent of the US's income.

Yes but if you had 50% of the total hashrate, you would be more profitable mining honest bitcoins than double spending surely?

spacey2012

BoracicLint wrote: »

The USA are a small fish

Funny those are the exact words Colonel Gaddafi used when he announced he was to stop selling oil in Dollars and only accept Gold as payment.

6 months later he was the most hunted human on earth.

Marazan

BoracicLint wrote: »

Yes but if you had 50% of the total hashrate, you would be more profitable mining honest bitcoins than double spending surely?

That is Satoshi's contention in the original paper but it depends on what the attackers intention is. Satoshi contends that once they have the keys to the mansion the attackers would prefer to peacefully live there rather than stripping it for valuables. A protocol that is not designed to protect against a truly malicious attack - say someone deliberately trying to take down Bitcoin - is dangerously weak in the real world.

And what when the network gets to it's 21 million end goal? There is no money in mining new coins, only whatever transaction fees the rent seeking miners can get. At that point any attack would solely be double spending attacks and trashing the network.

csm888

Marazan wrote: »

Governments can't afford $1.4billion? That's like less than a sixth of a percent of the UK Governments income.

That's not even an anything percent of the US's income.

Theoretically they could, but you try getting $1400Million dollars diverted to buy hardware... its possible, but unlikely. I think thats the point. The larger the number the harder it becomes.
Governments will always be able to ultimately stop things they don't like, they have money and soldiers. But they also have to sell their ideas back to the people who elect them.

As I said, I'm not disputing it is theoretically possible, I just don't see it happening (yet)

BoracicLint

Tweaker wrote: »

Do you ever read my posts before answering?, I said that you could not redeem your paper money for gold, but banks still have to hold tangible assets, I didn't say that they hold gold reserves.

And despite the gold standard being dropped governments still maintain gold reserves as a guarantee of payment to other countries, just not to their citizens.

So in the event of a collapse of sterling, I can rest assured that our obligations to other countries are safe, and I just use my hard earned cash to wipe my !!!!? Your argument about reserves means nothing to average joe on the street when he tries to use his worthless paper money to buy bread and milk.

BoracicLint

Tweaker wrote: »

Tell that to the Bank of England, so how can BitCoins become a global currency if it has no possibility of expansion, each coin would rise in value significantly which would render it impractical for use in day to day transactions unless you started to create smaller denomination BitCoins, how is that different from what the Bank of England does when it prints additional currency?

If I have one bitcoin now, I will always have 1/21,000,000 bitcoins irrespective of how many times it is subdivided

If I have £10 and there are £10,000,000 in circulation, what happens when the BoE prints another £10,000,000. How much of the pie do I have then?