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Bitcoin - P2P currency
Billybob
Member #3,136
January 2003

they understand cryptography and scalability better than you, these problems have already been solved, so deal with it.

Thank you for bringing this topic up, because although your specific statement is false (probably through no fault of your own), it's a great opportunity to discuss something very important.

No system is ever so well designed as to be irreproachable.

We all possess the intellectual capacity to both understand the Bitcoin system and improve upon it.

The spirit of Bitcoin is one of openness and community. Everyone, from every walk of life, is free to dissect it, discuss it, and change it.

Oscar Giner
Member #2,207
April 2002
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It has sky rocketing today :o

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So today it went from 3.8$ each BCoin to 4.7$ each BCoin, and the day hasn't ended yet :o:o.

Dustin Dettmer
Member #3,935
October 2003
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There is about $200M USD in the bitcoin system total right now.

Thomas Fjellstrom
Member #476
June 2000
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Feh. I was going to see about trying my luck, but they only seem to support payment services that require you to either send a check/money-order in to "load" your account, or do an EFT, which takes days. And I'd rather not give them my bank info.

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

Neil Black
Member #7,867
October 2006
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A friend of mine uses bitcoin. He apparently missed out on a few thousand dollars worth by selling when they were steady at around .6 for a few months... and is rage-facing now that they're at 4-5.

Billybob
Member #3,136
January 2003

I was going to see about trying my luck, but they only seem to support payment services that require you to either send a check/money-order in to "load" your account, or do an EFT, which takes days.

There are alternatives, like bitcoin-otc. Bitcoin-otc (Over The Counter) lets you trade directly with other people. A Web of Trust is used to improve security, along with escrow services like ClearCoin.

So you can try to use that to buy with something like PayPal.

You can also look into buying LR, Liberty Reserve bucks, using a Credit Card or something. Then transfer the LR into Mt. Gox.

Yeah, it's all a bit of a pain at the moment since CoinPal went down. :(

EDIT: By the way, TF, if you only want a small amount of BTC (<50), and are willing to cover PayPal fees, I'll sell them to you. Just PM me. I need to pay off my graphics card :P

Karadoc ~~
Member #2,749
September 2002
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Because of security? That seems dumb. It's about as secure as it's going to get; and when they find bugs, because it's open source, they'll get fixed. If you're going to put something that could become compromised like this, open source wins out for security. Just look at the compromised voting system -- I trust open source waaaay more than closed source for something like this!

However, stability is another issue. I speculate that NOBODY is putting "the bulk of their money" into this system, and that's mostly because of stability issues (the value of the money in this system is not as "guaranteed" or in "wide spread" usage.

Because it's open source, bugs are likely to be found and fixed as you say. That's good, but is it good enough? What if there is a fundamental flaw which results in the whole system being compromised such that no transactions can be trusted? Such a flaw is extremely unlikely, but it would also be extremely bad. Meanwhile, in the conventional currency "security" of that kind of basically provided by anti-counterfeit measures on printed currency, and various security systems implemented by banks for electronic currency. It certainly isn't perfect. It fact, in the anti-counterfeit measures on US currency are very weak (compared to Australian currency, which has very strong anti-counterfeit technology). But the fact is that conventional currency is more tested, better understood, and perhaps more able to evolve to new security systems (I don't really really know what mechanisms are in place for bitcoins to implement new security checks).

But all that's really beside the point. You're right that stability is the bigger concern. You originally called me stupid for saying that I trusted the reserve bank (of Australia) more than I trust the bincoin system. Well the reserve bank basically has nothing to do with the kinds of security that we've been talking about. The job of the reserve bank is to keep the currency stable. So when I say that I trust the reserve bank, and that I'm not willing to transfer my wealth into bitcoins, what I'm saying is that I think my money is safer in conventional currency than in bitcoins. I'm not necessarily talking about it being stole by some security loophole; but rather talking about loss of value in general.

I'm not saying that I think bincoin is a doomed or flawed system. I'm not saying that I'll never use it or that I'll never trust it. I'm just saying that I don't trust it yet – which surely isn't surprising, since I only learn of its existence recently; and I've been using conventional currency my entire life.

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Billybob
Member #3,136
January 2003

I don't really really know what mechanisms are in place for bitcoins to implement new security checks

Bitcoin operates as basically a consensus system. So whatever the majority of clients agree upon is the canonical "correct" state of the system. If a security flaw is discovered (there have been; look back a few pages for a post of mine), the client gets patched, and eventually the system corrects itself [1]. All transactions based on the exploit are invalidated and useless.

So, basically, if a terrible exploit is discovered somewhere down the road when Bitcoin is in use by thousands of banks and millions of people, there will be about a day of downtime. All valid transactions will remain valid, all the "stolen" money will be recovered, and all will be right in the world. I can't imagine any conventional currency and banking system would be able to repair, update, and recover all their money in the same amount of time.

[1]

To be specific. Anyone who updates their client immediately will no longer see the exploited transactions. They won't exist according to your client, and you won't see any transactions based off of those transactions.

Anyone who doesn't update will have to wait until the "correct" block chain beats out the incorrect block chain. This is accomplished when the hashing power of the miners working on the new block chain outpaces those working on the old block chain (roughly). Since most of the current hashing power is centralized to a few mining pools, this can happen pretty fast.

So, in the future, if you read about a Bitcoin exploit and are worried about the money your friend sent you, just update your client.

And, to be clear, the only transactions that get invalidated are those based off of the exploited transactions, and those based off of bitcoins mined after the exploit occurred. So you are very much unlikely to experience any difficulty and probably wouldn't even notice when an event like this occurs.

BAF
Member #2,981
December 2002
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Billybob said:

And, to be clear, the only transactions that get invalidated are those based off of the exploited transactions, and those based off of bitcoins mined after the exploit occurred. So you are very much unlikely to experience any difficulty and probably wouldn't even notice when an event like this occurs.

Unless the exploit isn't discovered for quite a while. Then, quite a bit may be depending on that fraudulent transaction.

Thomas Fjellstrom
Member #476
June 2000
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Billybob said:

EDIT: By the way, TF, if you only want a small amount of BTC (<50), and are willing to cover PayPal fees, I'll sell them to you. Just PM me. I need to pay off my graphics card

I was thinking about buying $100 worth. Whatever that is in BTC. Preferably like to buy in at a somewhat lower point than the peak today... Can you give me a deal on em? ;)

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

Dustin Dettmer
Member #3,935
October 2003
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What's to stop an update from invalidating a random transaction that the development community just doesn't like?

bamccaig
Member #7,536
July 2006
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I went ahead and installed the Windows client via installer (now that I'm back in Windows with my new PC for gaming). I left it running for a couple of hours, "generating" bitcoins, but saw no sign that anything was happening (aside from all 6 of my CPU cores maxing out). :-X I decided that the life of my CPU is more important to me than "mining" an experimental form of currency. :P I might want to buy into it (nothing major; maybe ~USD$5 or something to start), but I'm not willing to go to any trouble to do so. :)

Thomas Fjellstrom
Member #476
June 2000
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A CPU just isn't fast enough to generate the hash before someone with a bunch of GPUs does it.

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

Arthur Kalliokoski
Second in Command
February 2005
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bamccaig said:

the life of my CPU is more important to me than "mining" an experimental form of currency

If maxing out 6 cores is bad, why did you get 6 cores? Or just underclock it. Did you look at the temp readings?

The only way Trump is going to be involved in a landslide is if the land surrounding the White House collapses into the Earth's core. -- bamccaig

bamccaig
Member #7,536
July 2006
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If maxing out 6 cores is bad, why did you get 6 cores? Or just underclock it. Did you look at the temp readings?

It's not that it's bad for it, but it's that it won't actually get me anything unless I leave it running all day, every day; IF THEN. I'm sure maxing out all 6 cores 24/7 will slowly degrade the processor and hasten its inevitable failure. It's just not worth it. :)

Thomas Fjellstrom
Member #476
June 2000
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bamccaig said:

I'm sure maxing out all 6 cores 24/7 will slowly degrade the processor and hasten its inevitable failure.

You'll only notice it if you have shitty cooling. If your cooling is decent, the cpu is still likely to last decades.

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

Michael Jensen
Member #2,870
October 2002
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Billybob said:

No system is ever so well designed as to be irreproachable.

Of course not. But the first two pages of retarded crap are things you can find out have already been solved by looking at the wikipedia article on Bitcoin -- and likely were solved before the first line of code was ever written.

Obviously there are still issues, and will be issues. That's why I think it's great that this is open source. Anyone can fix anything, and anyone can review the fixes.

If a non-expert can pull it out of their ass as an issue, don't you think those are the things the designers discussed before building it? At least in the case of Bitcoin, I'd feel confident guessing they were.

Quote:

We all possess the intellectual capacity to both understand the Bitcoin system and improve upon it.

So instead of wasting time pondering about problems that have already been solved, go and contribute already! ;)

Billybob said:

You can also look into buying LR, Liberty Reserve bucks

I thought Liberty Reserve got shut down and raided by the fed ... in 2007?

That's good, but is it good enough? What if there is a fundamental flaw which results in the whole system being compromised such that no transactions can be trusted?

And what if the economy collapses tomorrow?

Actually I'd venture that if the system was so compromised -- a LOT of people -- people with money in the system, and with talent would rack their brains to come up with a good compromising fix which allowed most users to remain unharmed by the process -- and they'd probably get one -- or a something close -- or find a way to build a new system even better that takes care of the disadvantages, and allows the importing of old backed up, pre-fubar'd data...

Billybob said:

there have been; look back a few pages for a post of mine

That's actually what I based the above answer on. If you look in that thread you posted people were saying to not trade at all until the patch came out. I assume some other history may have been rolled back as well? Also for the few people who rendered tangible currency or other services for the exploited bit coins... well, they got ripped. So again, the exploit caused some damage, but the community ended up with a fix that was agreeable for most people.

It fact, in the anti-counterfeit measures on US currency are very weak

Agreed. Have you seen "Catch me if you can"? It's worth watching, but basically about how weak our counterfeiting measures USED to be. At any rate I think that's the basic model of things with closed source: Ignore problems until someone starts exploiting it, and then rush to make a patch. Whereas with open source, some nerd in college will find a new way to break things, decides he wants to wear a white hat that day and fix it. Heck even in closed source (I work for an extension of Microsoft after all) we find bugs. But if no one is willing to pay for them to be fixed... they sit in a database somewhere.

Also if you've been following recent events, I think they just broke debit cards again -- I think the basic gist is something like you copy the card with a slight modification and now knowing the pin # isn't necessary (that is a guess, I didn't look deeply into the technical side of it, but that's what I think they're doing.) Instead of fixing the issue, the banks are trying to sue the university students who presented it to them and were attempting to help them fix it... Fun times! >.<

Quote:

You originally called me stupid for saying that I trusted the reserve bank (of Australia) more than I trust the bincoin system.

Sigh, apologies, don't take it so harshly, I mostly meant it in jest. ;-) -- Also I wasn't calling you stupid for trusting the stability or security of the reserve bank of one over the other, but more the people -- I could never trust a banker or broker after what they're putting the world economy through right now. No -- not the teller at the counter, but the people actually running the banks. I need to stop being so lazy and move my money to a credit union!

Quote:

The job of the reserve bank is to keep the currency stable.

Is it? I didn't know that. I thought their job was to make a profit -- like all corporations... If their job is to stabalize the national fiat currency, they're failing in the US and we should fire them and hire a new bank!

Quote:

but rather talking about loss of value in general.

Right, you're worried about stability. Will I get back $.40 for every $1 I put in, or will I get back $1 for every .40 I put in? The problem is, we're still thinking about them as a currency to exchange with USD/AUD/etc, and not one to just buy/sell with and forget about other currencies. (Just think! No sales tax!) I mean if you go to Japan, you buy some yen, and you spend it. You don't (usually) worry about converting it back. I think Bitcoin has future potential to be the Internet's currency (if we embrace it.)

And fyi, that stability risk is always going to be there for any currency you trade in -- even ones backed in gold (because of inflation/deflation) -- Over time as it becomes more accepted and widely used (if it does, remember, Bitcoin is an experiment!), that will be more and more negated. But even the USD is declining in value now, that $1 cheese burger at mc donalds might still be $1, but it has less cheese burger in it, I assure you... -- As I posted earlier though, some people make a living trading currencies -- like on the ForEx market.

Quote:

I'm just saying that I don't trust it yet

Then I think we're on the same page. ;)

What's to stop an update from invalidating a random transaction that the development community just doesn't like?

How do they decide to like or dislike a transaction Dustin? There are no names, just public keys. There are no records of what the transaction was in exchange for... On top of that, why would they compromise the legitimacy of their own system; don't you think that would cause people to "jump the boat" rather quickly, so to speak, lowering the value of their own Bitcoins?

bamccaig said:

It's not that it's bad for it, but it's that it won't actually get me anything unless I leave it running all day, every day

From what I've been reading, it sounds like even then you will get nothing. It sounds like GPU mining is where it's at. ;)

bamccaig
Member #7,536
July 2006
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From what I've been reading, it sounds like even then you will get nothing. It sounds like GPU mining is where it's at. ;)

I was actually disappointed to find that the client is extremely basic. There are very few configuration options. I don't know how to differentiate between GPU mining and CPU mining... My GPU isn't awesome, but it's not too shabby either, so I would imagine that it would help out... Nevertheless, I don't think it's right to have people mining the same coins. :-/ Just means the rich will continue being rich. :P Not that it matters. I doubt you can make any serious coin by mining anyway.

Billybob
Member #3,136
January 2003

What's to stop an update from invalidating a random transaction that the development community just doesn't like?

Nothing ... until someone notices. Then the dev team gets "fired" and new updates to the client will come from somewhere else. At which point their change will be reverted and the transaction will be valid again.

bamccaig said:

but saw no sign that anything was happening

They've been planning to remove that option from the GUI for awhile. Yes, it is doing something, but as others pointed out a CPU just doesn't have the power necessary to succeed in generating a block any time soon (unless you're insanely lucky). You could try downloading a CPU miner and joining a Mining Pool. This tool will tell you how many BTC you are likely to generate (through a pool).

I thought Liberty Reserve got shut down and raided by the fed ... in 2007?

You were thinking of the wrong thing. Liberty Reserve.

Apparently you can also use Dwolla to fund a Mt. Gox account. But I haven't personally used it, or know of its reputation (TF might want to check there U.S. only).

EDIT:

bamccaig said:

I don't know how to differentiate between GPU mining and CPU mining.

The Bitcoin Client only uses CPU, and as I said that feature is slated to be removed. You need a dedicated GPU mining client, like this fancy GUI interface.

Thomas Fjellstrom
Member #476
June 2000
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Billybob said:

TF might want to check there

Dwolla seems to be US only? I looked at all the options they provided. They all require some kind of delay, either in mailing a check/money-order, or using an EFT (not sure they'd even take a canadian eft).

--
Thomas Fjellstrom - [website] - [email] - [Allegro Wiki] - [Allegro TODO]
"If you can't think of a better solution, don't try to make a better solution." -- weapon_S
"The less evidence we have for what we believe is certain, the more violently we defend beliefs against those who don't agree" -- https://twitter.com/neiltyson/status/592870205409353730

weapon_S
Member #7,859
October 2006
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Vanneto
Member #8,643
May 2007

You originally called me stupid for saying that I trusted the reserve bank (of Australia) more than I trust the bincoin system.

No he didn't. Go back and read what he wrote again. Slowly this time.

In capitalist America bank robs you.

Jonatan Hedborg
Member #4,886
July 2004
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weapon_S said:

It is unthinkable that some hacker replaces millions of Windows instances with his own version

He would only be able to trade with his own modified software, since other clients would not validate his transactions, essentially creating a miniature bitcoin network inside the network.

-------
Sweden: Free from the shackles of Democracy since 2008-06-18!

Dustin Dettmer
Member #3,935
October 2003
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Billybob said:

Nothing ... until someone notices. Then the dev team gets "fired" and new updates to the client will come from somewhere else. At which point their change will be reverted and the transaction will be valid again.

We've seen in the past they can invalidate a transaction when the bug was discovered. Imagine a scenario where the masses get mad and decide they don't like some person. If everyone agrees on it -- there's no one to fire the developers.

What I'm saying is, because there's a back door. One day that back door will become a hot topic and a ripe avenue of control.

Jonatan Hedborg
Member #4,886
July 2004
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Imagine a scenario where the masses get mad and decide they don't like some person.

It would be very hard to actually single someone out. There is as far as I know no way to find out what physical person is the recipient of a specific transaction.

It's also a pretty unlikely scenario, and one that could happen with regular currencies as well (except, unlike trade embargos, everyone who actually use the currency would have to agree to it)

-------
Sweden: Free from the shackles of Democracy since 2008-06-18!



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