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Post by The_WHHAAAMMMM_Burgler on May 19, 2011 21:11:13 GMT -5
It would seem that a new trend has emerged on the internet, instead of memes an open source, digital, crypto-currency called bitcoins has emerged. Instead of any form of economic principle this pseudo currency is generated by cryptographic hash calculations. www.bitcoin.org/Despite the stumping by a subculture of paranoid libertarians, the self-proclaimed technotarians, the economic and technologic principles behind bitcoins are horribly flawed. An example of the hype spread by technotarians: launch.is/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.htmlAs expected, the abuse of bitcoins is common and rampant. The reasons for this are quite simple: Sources: www.slate.com/id/2294980/marginalrevolution.com/marginalrevolution/2011/04/the-economics-of-bitcoin.html1) Bitcoins do not have an intrinsic or stable value. They literally are currency traded as a commodity. Horde enough or flood enough of them and their value can be manipulated. 2) Bitcoins can be created or destroyed via hacking. Deleting bitcoin wallets destroys bitcoins while hacks such as “double spending” creates bitcoins erroneously. a. All of which assumes that someone simply does not create a modified client from the source code to generate bitcoins without limit. b. Or that a hash collision is not used to undermine the generation process creating a sudden surplus of bitcoins. c. Or that a buffer overflow is used again to spontaneously create millions of bitcoins. en.bitcoin.it/wiki/Changelog3) As an anonymous currency with no central authority to oversee transactions, bitcoin theft and fraud are rampant. All payments are irreversible! a. Here is a how to guide on stealing bitcoins for dummies: evilpacket.net/2011/may/17/stealing-bitcoins/ b. Here is a how to service on laundering bitcoins for dummies: bitlaundry.appspot.com/c. Bitcoin to USD for all your fraud needs. www.bitcoin2cc.com/To the surprise of absolutely no one, this digital currency is used to purchase drugs. en.bitcoin.it/w/index.php?title=Trade&diff=7902&oldid=7896The goons of Something Awful beat me to the punch: 216.86.148.111/showthread.php?threadid=3411136
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Post by Shane for Wax on May 19, 2011 21:16:16 GMT -5
...Come again?
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Post by The_WHHAAAMMMM_Burgler on May 19, 2011 21:18:18 GMT -5
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Post by Art Vandelay on May 19, 2011 22:28:07 GMT -5
I don't suppose you could summarise what you're talking about and save the linkspam for the very end? It's rather hard to discern your point and on an unrelated note it reminds me of Mabus.
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Post by The_WHHAAAMMMM_Burgler on May 19, 2011 22:42:35 GMT -5
I don't suppose you could summarise what you're talking about and save the linkspam for the very end? It's rather hard to discern your point and on an unrelated note it reminds me of Mabus. Better now?
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Post by Armand Tanzarian on May 20, 2011 8:03:10 GMT -5
Your post is still a bit too close to a Mabus post there. Here's another link, basically covers all the above points without the staggering paragraphs. www.slate.com/id/2294980/
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Post by Oriet on May 20, 2011 13:02:25 GMT -5
Thanks Armand, that gave a nice, concise manner of presentation of what bitcoins are and the problems with them. Much better than the dozen links in the OP (and this is after he cleaned it up to be more understandable).
Also, Whaaammm, please organise your posts better, and state the pertinent info instead of just linking to it. Links are great, as they show your sources and give something for people to read if they want to understand the issue more thoroughly, but people don't want to read a dozen links just to try understanding what you're babbling about. That, and your opening post's formatting looks like what Mabus and other trolls do, which is an immediate turn off to the content of the post, no matter how important or worthwhile that content actually is.
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Post by perv on May 21, 2011 4:38:37 GMT -5
My 0.02 BTC (which it happens is exactly how many I own):
I am by no means an expert on Bitcoins, there may well be flaws in the system, but I think it's a fundamentally a very very good idea. Now if you're the kind of person who wants the government looking over your shoulder all the time, I understand why you might not see the appeal.
So, a few points about how it works:
Instead of centralized authority, peers take turns being the authority based on their (computer's) ability to solve a difficult math problem. Obviously a fast computer helps, but it still requires a lot of luck. This essentially randomizes who gets to be in charge each moment. So yes, you could "generate" a bunch of coins out a thin air, but the next computer who randomly gets to be authority for ten minutes is going to say "whoa whoa whoa where did that come from?" and won't pass word of their their existence on any further. So it's much harder to hack then you make it sound like.
The typical advice for avoiding cheats of this kind is to wait until a payment you receive has been verified by six of these temporary authorities (which takes about an hour). Sure it's a hassle but freedom isn't fee, is it?
On the other hand: One flaw you didn't mention is it's really not that anonymous. Every transaction is known by every user. (Which is how the previous hack is foiled.) These transactions are recorded between "addresses" rather then users per se, but it still wouldn't be hard to "follow the money" and track it back to someones real identity unless they were very careful at every single step.
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Post by Oriet on May 21, 2011 16:01:48 GMT -5
Now if you're the kind of person who wants the government looking over your shoulder all the time, I understand why you might not see the appeal. I don't want the government looking over my shoulder all the time (as that would be a very bad thing), but I do want a guarantee on the currency I use to have value so that I can easily purchase things, especially necessities. I like being able to plan for the future too, of knowing how much my money can get me in a month's or year's time. If you want anonymity deal strictly with cash. Unless both the places you get it from and use it at record the serial codes of the bills and your name it's really hard, if not impossible, to trace. There's a reason a lot of illegal dealings are with cash, such as purchasing illegal goods or services, paying employees off the books, or so that they don't have to report all (or any) of their income for taxes and the like. Sure, you can't directly buy stuff online with cash, but you can use cash to buy gift cards that act like credit cards for online purchases.
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Post by Radiation on May 21, 2011 17:12:24 GMT -5
I can't even begin to understand the whole thing behind bitcoin so I don't mess with it.
I would rather just get a reloadable prepaid credit card and use that instead, or just a prepaid gift card. I don't want to own a credit card, not because of anonymity but because I don't want to get hit with interest charges.
I'm already having to pay a medical credit card off and the interest rate is high on that.
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Post by Art Vandelay on May 21, 2011 22:24:06 GMT -5
I don't see the point of bitcoins personally. We have government financial regulatory bodies such as the reserve bank for a damn good reason. Furthermore, I don't engage in any illegal online activity that requires covering up, nor is my current method of online payments, my debit card, any sort of inconvenience to me.
I guess the only use I see for them is making a quick buck in currency trading, assuming it stays in vogue long enough to hit the supply ceiling of 21 million bitcoins long enough for the supply shortage to kick in, although I imagine the cap would at the very least be increased, if not done away with entirely, should it end up causing rapid deflation.
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Post by perv on May 22, 2011 2:30:14 GMT -5
I don't think anyone seriously expects this to replace traditional online payment methods (well, maybe a nutty people) but I do think that just maybe Bitcoins or something like them could provide a viable alternative one day.
As I understand it the project was largely a response to the Feds cracking down on eGold. So they wanted to make a new payment system that couldn't be shut down. I guess my anarchistic side is showing, but I think that's a worthy goal. You don't have to be doing something actually illegal to have trouble with a payment system being under the government's thumb. Anyone try donating to Wikileaks lately?
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Post by Paradox on May 23, 2011 13:21:37 GMT -5
Is it a scam or a really stupid libertarian thing? There is no way to know! It's like Poe's law, the two are indistinguishable.
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Post by Armand Tanzarian on May 25, 2011 10:06:31 GMT -5
Is it a scam or a really stupid libertarian thing? There is no way to know! It's like Poe's law, the two are indistinguishable. Well you could look at 2 (not necessarily mutually exclusive) reasons for Bitcoin to exist. One is the libertarian idea of not having a central authority (a Federal Reserve or National Bank) controlling the currency, instead having the currency being controlled purely by market forces. This is detailed in the Slate article I posted. But the other reason is also the (naive) desire to be able to create a currency without barriers to acceptance across the world. In the event of a country or channel not accepting a currency like the US Dollar, Bitcoin could step in. Of course that requires a widespread acceptance of bitcoin and a whole lot of wishful thinking, but internet-based products were never known for a lack of idealism.
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Post by Haseen on May 26, 2011 3:32:18 GMT -5
This made me laugh: gizmodo.com/5805254/mining-bitcoins-looks-like-growing-pot-to-the-policeSomeone set up a bunch of computers in their home to farm bitcoins (competing with others to solve a crypto problem that adds to the registry of transactions -- this rewards a number of bitcoins for whoever solves it first) Apparently, this has the same power consumption profile as a large indoor hydroponics operation, and he got a surprise visit from the police (who were surprised to be staring at a bunch of computers instead of a bunch of plants). (Derail topics, go to flame and burn or something. Also, I believe this happened in Canada.) So on one hand, people are willing to spend a lot in electricity + computer hardware to mine them and in a way, prop up the price (free market value = cost to mine them), but they could also potentially be throwing all that way if someone finds a way to hack them. Maybe something like set up a bitcoin server with fake transactions to your benefit and host as many copies of it as possible all over the web. Then let the fakes fight it out with the reals, and if you've spammed enough fakes, you win!
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